• by Karl Greenberg , April 8, 2013

Anyone who has been to a college sports game knows licensed merchandise -- shirts, caps, pants, sweats, tailgating equipment and the like -- is ubiquitous. For licensees, universities, and marketing firms, it’s also big business. According to IMG College affiliate The Collegiate Licensing Company (CLC), last year saw $4.62 billion in retail sales of collegiate licensed merchandise, which the organization says is an all-time high, beating every sport but Major League Baseball. Of that, March Madness generates about $10 million.

Leading the merchandising game is The University of Kentucky Men’s Basketball National Championship program with $1.2 million (in gross royalties) in 2012.  

Marty Brochstein from The International Licensing Merchandiser's Association (LIMA), the primary trade organization for the worldwide licensing industry, tells Marketing Daily that university licensing programs run on high emotion, especially around March Madness. "There's really no football equivalent to the sustained three weeks of March Madness, even for people who have no affiliation." He says apparel as caps, shirts, and sweats definitely lead the trend. 

Cory Moss, SVP and managing director of CLC, which represents the NCAA and over 200 universities, says schools make the final decision on licensees, with universities splitting royalties with manufacturers. Also, per Moss, agencies like CLC do a lot of the heavy lifting to create lasting interest and brand value around -- and especially after -- events like The Final Four. The last thing licensees want is for fan passion for a participating team to evanesce, which would mean having to build the whole thing back again the next year. "With athletic success we will see a spike, but we don't want sales to go down, so we see an opportunity to build on that success. That way when the season comes back around [a university athletics team] is more visible, more well-known." 

Getting the product into new retail channels, and boosting interest through promotions and incentives, helps to achieve that. "We work with schools to get alumnae data so we can pinpoint the density of alumnae populations, and then try to match retailers in that area." First off, he says, the agency has to get retailers interested by proving that there is a sales base to move volume. 

The biggest growth trend, he says, is the women's category. "Years ago, women’s products were defined as 'men's small.' Now that we have been able to target specific women's [apparel] companies, we have started to get better purchases from women because now products are made in their their styes and fashions," says Moss. 

It’s critical for the business, since 77 million of the 173 million college sports fans are females. "And females are do the majority of both male or female merchandise shopping. There also is big growth in housewares and tailgating." A big chunk of the NCAA sports fan base is affluent, per Moss, who says about 29 million fans earn over $100,000 annually, and 18 million are between 18 and 24 years of age. "They are young, educated, and affluent."