State of the Industry: Loud and Proud

Oct 6, 2015


Ask sports fans what they love about the game, any game, and there are guaranteed to be a range of answers: records being broken; the incomparable camaraderie in the stands; the drama as the time on the clock winds down; that “anything-is-possible” feeling after an underdog pulls off a win. (Then, there’s the one thing they hate: that lull in the sports world that hits about mid-July).

This passionate bunch also loves nothing more than to show off their team spirit, whether it’s by wearing their favorite player’s jersey, drinking out of their favorite mug or lucky glass, or helping set up a tailgate.

Here’s the translation for retailers: Anytime is a good time to be in the sports licensing business.

And here’s the proof: According to The Licensing Letter Sports Licensing Report 2014, sports licensing in the United States and Canada was a $13.44 billion business in 2013, up from $13.07 billion in 2012, and accounts for 13.8% of the total licensed merchandise market — a proportion that has remained stable for the past few years.


Consistently taking first place among best-selling categories in sports licensing, apparel compiled $5.47 billion in retail sales in 2013, representing 40% of the total retail sales of licensed sports merchandise for the year.

And when combined with other accessorizing elements — including caps and footwear — the wearables category as a whole accounted for half of total retail sales last year.

Offering wearables that meet fans’ needs, and that are unique enough to motivate them to make room in their closets, is key to the licensing game. “Coming off of a very cold winter, I think people are starting to prepare for another one, so we’re actually seeing a push in sweaters and fleece like we haven’t seen in the past,” says Natara Holloway, vice president of consumers products, the National Football League (NFL). The league also introduced its new Ugly Sweater this year, merging a cold-weather essential with a trendy, pop-culture phenomenon.

Another fashion trend making its way into the sports licensing industry is the seemingly blurred line between ready-to-wear apparel and activewear, with consumers wearing yoga pants and the like to run errands or grab dinner.

“We’re seeing a move toward casualization,” says Marshal Cohen, chief retail analyst, The NPD Group. “It’s this idea that, ‘I can go out and look like I’m ready to go to the gym and that’s perfectly fine.’” The National Basketball Association (NBA) is taking this active trend a step further into the non-apparel sector, promoting a healthy lifestyle. One of the league’s newest licensees, Cirrus Fitness, offers a line of exercise equipment, including yoga mats and medicine balls, that features logos of all 30 NBA teams.

While non-apparel sales are no competition for the apparel category — video games/software held an 11.6% share and all other product categories, except for gifts and novelties (7.2%) held less than a 5% share of the market — some of the smaller sectors under the non-apparel umbrella have great growth potential.

“Tailgating is the biggest trend [in non-apparel], by far,” says Jon Jankowich, buyer, Cracker Barrel Old Country Store. The latest variation, “homegating,” brings tailgating into the home for away games or for fans who don’t have the opportunity to attend games.

“[The NFL has] plates and dishes, and all of those products that really make your authentic kind of party for watching a football game,” Holloway says. “We call it bringing the spirit of the game home.” The NCAA also has seen tailgating and homegating products perform well. “Logo Inc. is now our No. 1 school-specific licensee,” says Andrew Giangola, vice president, strategic communications, IMG College. “Their product line is mostly portable tailgate products.”


Consistently the industry’s market-leading professional sports leagues, the National Football League (NFL) and Major League Baseball (MLB) each represent more than a 23% share (see Figure 3) of licensed sports product retail sales. Excluding the collegiate market, MLB generated the highest retail sales of licensed merchandise at $3.21 billion in 2013, followed closely by the NFL at $3.13 billion. However, in 2013, both of those leagues saw sales revenue growth that came in slightly behind the performance of the industry as a whole (0.9% and 1.8%, respectively, compared to 2.8% for the entire market).

The NBA, while ranked No. 3 in retail sales ($12.195 billion), increased its revenues quicker (6.5%) than the sports licensing market as a whole in 2013. And on a percentage basis, Major League Soccer (MLS) once again posted the biggest increases in retail sales — up 13.5% in 2013, to $487 million, from $429 million in 2012, according to The Licensing Letter. Maribeth Towers, senior vice president, MLS, attributes this development to the growing soccer fan base, ongoing success at the club level and MLS Cup playoff excitement.

Sharing many of their licensees with the major leagues, educational institutions also are major players in the marketplace. In fact, retail sales of licensed collegiate merchandise totaled $3.43 billion in the United States and Canada in 2013 (up 1.8%, from $3.37 billion in 2012), putting collegiate licensing ahead of MLB and the NFL for the fifth year in a row, according to The Licensing Letter.

With the collegiate market boasting the largest fan base in all of sports at 190 million, according to Giangola, retailers are working to reach this hot market sector.

“[Cracker Barrel] continues to see consistent growth with collegiate licensed product, while NFL and MLB product is holding steady, but not really growing year over year,” Jankowich says. “The success of the Southeastern Conference (SEC) in the past decade has certainly driven interest and growth, which we have done our best to understand and take advantage of from a merchandise perspective.”

Beyond its size, the collegiate market also has very attractive consumer demographics, with more than 17 million fans ages 18-24, and 78 million female fans (more than any other sport).

“College sporting events are an experience increasingly shared among family and friends,” Giangola says. “There is a genuine, very strong sense of community in college sports.”

In some sense, leagues — both professional and collegiate — are in competition with each other, fighting for the attention of sports fans. Very few sports fans have just one team. Pointing to growth in the “other sports” category, which grew 17% in 2013 — and generating more licensing revenue in 2013 than any professional sports league except MLB and the NFL — The Licensing Letter explains that sports fans may consider themselves “avid fans” of only a few sports, but may also follow up to eight.

And while a more interested, well-rounded fan population is certainly a good thing, it also means that pushing the product envelope is all the more important to garner the attention of the many sports fanatics that exist.


Tackling the women’s market has been a big focus in the licensed sports product industry during the past few years.

“To a great extent, female fans were under-addressed beforehand,” says Marty Brochstein, senior vice president, industry relations and information, Licensing Industry Merchandisers’ Association (LIMA). “Now, everybody is paying more attention to fashion trends and there has been a sophistication of the product. We’re a long ways away from just making it pink.”

Female consumers don’t just want styles are that fitted to their figures, they expect such. And now, they’re looking to build wardrobes. “We continually try to diversify our women’s offering by adding compelling, progressive products to ensure that we offer something for everyone,” says Lisa Piken Loper, vice president of licensing, NBA. “We now offer maternity, plus, junior and kids [sizes] in a variety of styles and fabrications, as well as swimwear, home goods and accessories, including handbags and jewelry.”

There’s also a concentration on teaching women how to use these tees, fashion tops, handbags and jewelry, to assemble outfits.

“We’re seeing a shift toward helping women understand how to dress more leisurely; it’s not as easy as buying active bottoms,” The NPD Group’s Cohen says. “The goal is to help them know how to pair them with the right shoe or the right top.”

The NFL has even launched marketing campaigns specific to this objective, bringing in ambassadors like Jordin Sparks to showcase different styles and looks. The NFL also uses ambassadors for its teen and tween demographics — also big growth-opportunity sectors — with a twist.

“We take a slightly different approach with our tweens and juniors,” Holloway says. “We do a lot with the ‘selfie-ish’ kind of thing and ‘show me your style.’ The league calls on its younger fans to show them how to incorporate [merchandise] into their wardrobe, as opposed to us showing women how to incorporate it into their wardrobe.”

From fashion tees with foils, and fun accents and bracelets, to jerseys, school supplies and video games, trend-setting tweens and juniors are a collective group looking to incorporate fandom into their trendy closets and emulate the athletes they admire.

“There are several kid-specific licensees in the marketplace today, but much of the growth has come from many top licensees in the adult space simply putting focus on the kids’ area,” Giangola says. “Kids want to wear the same product they see on their favorite athlete, parent, older sibling or other adult.”

No matter what age or gender they are — or what team they cheer for — sports fans share a similar spirit, respect for tradition and love of the game.

“Trends in the sports licensed [product] business aren’t truly driven by fashion, age, demographics, geography or even on-field performance,” Jankowich says. “Our industry’s growth and success is driven by passion. Changes in demographics or fashion tastes can — and do — influence what we do. But in the end, the passion and affinity a fan, alumni, student or parent has for their school or team always needs to be our focus and primary concern.”