“We recognize licensed product to be the most physical extension of the NCAA brand,” said Peter Davis, director of corporate alliances. “Licensing provides NCAA with another communication channel through which we can speak to the general public.”
In the past few years, licensing has taken on a more important role in NCAA’s business strategies, particularly when it comes to fans and corporate partners. The organization has made three significant investments of late to support each group while growing its licensing potential.
NCAA has more than 750 championship sites a year where it sells merchandise. The organization realized the competing student-athletes were buying a lot of the merchandise before fans got to the venue. Although the organization wanted to adjust the situation to make sure both fans and athletes got what they needed, the difficulties of forecasting championships was a challenge.
NCAA turned to its merchandise concessionaire, Event 1, a wholly owned subsidiary of Gear for Sports, one of NCAA’s top licensees. The group at Event 1 developed an online ordering system specifically for student-athletes, coaches, administrators, and teams competing.
“Before the championship begins, the teams can go online and place orders for things like T-shirts and other merchandise they’d like to have,” said Davis. “When they get to the championship site, they’ve got that merchandise and don’t need to go to concession stands to buy it.”
Now in the middle of its second year, the online buying option continues to grow. NCAA has multiple options for merchandise available before championships begin. As soon as the brackets are announced, each of the teams within the bracket receives information on how to access the website and place orders.
Promotion and marketing investment
NCAA ranks its sponsor program into two tiers. Champions are top tier; partners are second tier. In the last three years, the organization saw a decline in the frequency and revenue stream from premium licensed products being used in sponsor promotions.
Part of the problem, Davis said, was a lack of focus on the promotion and marketing side. “Part of it was, candidly, that I didn’t have our ducks in a row as much as I would have liked,” he said.
NCAA teamed up with licensee BDA in Washington state to focus on premium items for the organization’s corporate champions and partners. BDA will serve as a premium branded item agency to develop ideas and concepts for each of NCAA’s 11 champions and partners, providing them with access and assets, some turnkey and some more involved, and giving them ideas to drive additional revenues, growth, and value for the partnerships they have with NCAA.
The partnership became official just before March, which meant it was too late for much of March Madness, but Davis said BDA did get involved and worked out a few orders with two champions/partners. “Continuing to build additional value for those partners is extremely important, so we look to make sure we’re providing opportunities in the world of licensing that will benefit the corporate partners,” Davis said.
“The hope is by increasing the value to those partners we also increase the value to our sponsorship program, either when extending those relationships or welcoming new corporate partners to the family,” he continued. “Those revenue streams are very important to NCAA as a significant amount of what is generated goes back to our colleges and universities.”
Print licensing investment
The third investment NCAA recently made centered on finding a partner to work with the organization on licensed print merchandise. Although it had print licensees in the past, Davis said none of the partnerships took as aggressive an approach as was needed to handle a broad range of possibilities.
ProGraphs, LLC of Kansas City, Mo. answered the call and will work with NCAA on the print side of its licensing program. The company will also work with art such as framed artwork for fans, partners, and individuals within NCAA, enabling the organization to get in front of its audience in a more graphically pleasing way.
The result of these three investments, as well as a burgeoning relationship with CLC, has enabled the licensing division of NCAA to experience significant growth. For FY2009, the organization saw 14% growth. So far for FY2010, which ends June 30, the organization is tracking at 30% growth.
“The beauty of CLC is the group speaks directly to the NCAA licensing program, to the broader audience of our membership, and to the 200-plus schools they represent,” said Davis. “CLC handles the day-to-day allotment so we can take a step back and work at a slightly higher level than we’ve been accustomed to in recent years.”
Vision for change
Change is the vision for the future for NCAA. In addition to welcoming a new president, the organization has changed its broadcast and media rights partnership.
“We’ve been with CBS for a number of years, and we will continue to be, but we’ll also partner with Turner Sports,” said Davis. The 14-year, $10 billion-plus relationship is a big move for NCAA and was developed with a clear understanding of how the strategies, visions, and goals of all parties involved aligned with one another.
“The partnership meets the needs of each side of the table, and the table continues to grow,” said Davis. “It’s not two-sided; we’ve got CBS, Turner, NCAA, CLC, our licensees, and each of our champions and partners to think about.”
The hope, Davis said, is that NCAA’s licensing program is nimble enough to change if the vision should change, accommodating modifications to not only keep pace with where NCAA has been, but also taking the licensing division of the organization to the next level.
NCAA has also started working with CLC International to place the NCAA name internationally. Davis said the schools people are interested in overseas don’t often tend to be those that have seen the most wins. By expanding its international presence, NCAA opens up the possibilities of introducing both more schools to its international base and new products.
“Right now, we are more in a fashion or lifestyle focus overseas because people don’t know and recognize the NCAA other than its American culture,” said Davis. “We have an opportunity to grow the brand of the NCAA through our licensing program. The licensing program can be the lead rather than the tail of our brand.”