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7 Licensed Merchandise 7 LICENSED MERCHANDISE 7.1 Market Assessment According to The Licensing Letter, sports-licensed merchandise accounts for 13.5% of the total U.S. licensing market. PricewaterhouseCoopers (www.pwc.com) assesses the market for professional and collegiate sports licensed merchandise as follows: • 2010: $12.57 billion • 2016: $13.97 billion • 2011: $12.48 billion • 2017: $14.20 billion • 2012: $12.77 billion • 2018: $14.42 billion • 2013: $13.14 billion • 2019: $14.62 billion • 2014: $13.49 billion • 2020: $ 9.30 billion • 2015: $13.81 billion _________________________________________________________________ “The domestic sports licensing business has been battered this year in a way few industries can relate, besides airlines and live concerts. Sports venues were largely shuttered and only recently permitting fractional crowds.” SportsBusiness Journal, 11/16/20 _________________________________________________________________ 7.2 Professional Sports Merchandise The Licensing Business assesses retail sales for merchandise emblazoned with logos of professional sports licensors as follows: • MLB: $3.84 billion • NFL: $3.64 billion • NBA: $2.83 billion • NHL: $1.09 billion • NASCR: $ 863 million SPORTS MARKETING 2022 • 47 • • Pro Soccer*: $ 780 million • PGA Tour: $ 349 million * Includes European and Latin American teams 7.3 Collegiate Merchandise According to The Licensing Letter, annual retail sales of licensed collegiate merchandise are $4.6 billion in the U.S. and Canada. The market includes sports and general merchandise; the bulk of spending is for sports-related items. Collegiate Licensing Company (CLC, www.clc.com), part of IMG College (www.imgcollege.com), accounts for 75% to 80% of the collegiate licensing market. Licensing Resource Group (www.lrgusa.com) is the second largest agency representing schools. Collegiate Licensing Company estimates the total collegiate licensing business higher than The Licensing Letter, at $5.5 billion, because CLC includes in its assessment non-royalty-bearing merchandise sold through college stores. According to CLC, apparel accounts for 65% of licensed collegiate merchandise. Distribution of licensed apparel merchandise is as follows: • T-shirts: 24% • Women’s fleece: 16% • Men’s/unisex fleece: 14% • Headwear: 13% • Other: 33% Distribution of non-apparel product categories, which account for 35% of the collegiate licensing market, is as follows: • Videogames: 24% • Domestics: 9% • Housewares: 8% • Gifts/novelties: 6% • Other: 53% Sales of licensed merchandise are highest for the following university brands (source: Collegiate Licensing Company): • University of Alabama • University of Texas • University of Notre Dame • University of Michigan • University of Georgia • Texas A&M University • University of Florida • Louisiana State University • Florida State University • University of North Carolina SPORTS MARKETING 20202 • 48 • According to Collegiate Licensing Company, the following are the top collegiate merchandise licensees: Apparel • Knights Apparel • Nike USA • Top of the World • adidas Team • Champion Custom Products • Outerstuff • Gear for Sports • Twins Enterprise • J. America • Colosseum Athletics Corp. Non-Apparel • EA Sports • Fabrique Innovations • Wilson Sporting Goods • The Northwest • Commemorative Brands • Upper Deck • Herff Jones • Team Beans • Jenkins Enterprises • Tervis Tumbler 7.4 Market Resources The Licensing Letter, Plain Language Media, P.O. Box 509, New London, CT 06320. (604) 210-4580. (www.thelicensingletter.com) Licensing Industry Merchandisers’ Association, 350 Fifth Avenue, Suite 4019, New York, NY 10118. (212) 244-1944. (www.licensing.org) SPORTS MARKETING 2022 • 49 • 8 SPORTS BETTING 8.1 Legal Sports Wagering The Professional and Amateur Sports Protection Act (PASPA), enacted by Congress in 1992, prohibited the expansion of sports betting beyond Delaware, Montana, Nevada, and Oregon – the four states that had already conducted or were formally considering legislation on some form of sports betting. Among these states, only Nevada allowed casino sports betting. In May 2018, the Supreme Court struck down PASPA, the federal law that barred gambling on football, basketball, baseball and other sports in most states, giving states the go-ahead to legalize betting on sports. The American Gaming Association (www.americangaming.org) estimated that Americans illegally wagered about $150 billion annually on sports prior to the Supreme Court ruling. As of June 2021, 22 states and jurisdictions had passed legislation enabling sports wagering, as follows: • Arkansas • New Hampshire • Colorado • New Jersey • Delaware • New Mexico • District of Columbia • New York • Illinois • North Carolina • Indiana • Oregon • Iowa • Pennsylvania • Michigan • Rhode Island • Mississippi • Tennessee • Montana • Virginia • Nevada • West Virginia 8.2 Market Assessment The following metrics are commonly used to assess sports wagering: • Handle: Amount wagered • Revenue: Amount of wagered money kept by sportsbooks • Hold: Percentage of handle sportsbooks keep; the rest is paid out to winners • Taxes/state revenue: Taxes collected by state and local jurisdictions SPORTS MARKETING 20202 • 50 • Sports wagering has been as follows: Year # States Total Handle Total Revenue State Tax Revenue • 2018: 8 $ 4,618,927,032 $ 328,876,857 $ 39,128,263 • 2019: 14 $13,070,894,561 $ 915,172,754 $127,364,114 • 2020: 20 $21,526,970,899 $1,545,524,400 $244,621,474 By state, sports wagering in 2020 was as follows: Handle Revenue Hold Tax Revenue • Arkansas: $ 32,882,808 $ 4,191,640 12.75% $ 583,374 • Colorado: $1,185,754,618 $ 75,841,206 6.40% $ 2,964,672 • Delaware: $ 90,242,755 $ 17,096,405 18.94% $12,043,312 • District of Columbia: $ 80,527,761 $ 13,548,201 16.82% $ 1,008,014 • Illinois: $1,882,363,604 $125,494,792 6.67% $20,191,143 • Indiana: $1,769,270,606 $137,277,099 7.76% $13,041,325 • Iowa: $ 575,239,746 $ 41,629,263 7.24% $ 2,806,655 • Michigan: $ 130,763,498 $ 18,276,857 13.98% $ 1,535,256 • Mississippi: $ 363,775,648 $ 43,741,530 12.02% $ 5,256,453 • Montana: $ 17,779,330 $ 2,450,769 13.78% $ 2,450,769 • Nevada: $4,340,581,339 $263,340,000 6.07% $17,808,056 • New Hampshire: $ 292,594,088 $ 23,637,613 8.08% $11,000,815 • New Jersey: $6,016,968,399 $398,521,093 6.62% $50,891,397 • New York: n/a $ 10,768,736 n/a $ 1,094,832 • Oregon: $ 218,246,357 $ 20,072,367 9.20% n/a • Pennsylvania: $3,580,864,477 $269,902,733 7.54% $81,374,898 • Rhode Island: $ 221,916,076 $ 24,067,477 10.85% $12,274,413 • Tennessee: $ 312,344,523 $ 27,144,908 8.69% $ 5,443,918 • West Virginia: $ 414,855,266 $ 28,521,711 6.88% $ 2,852,172 By month, sports wagering in 2020 was as follows: Handle Revenue Hold Tax Revenue • January: $1,788,260,374 $139,932,628 7.83% $23,016,306 • February: $1,714,626,537 $ 84,206,523 4.91% $24,703,927 • March: $ 607,988,102 $ 35,330,216 5.81% $ 6,280,624 • April: $ 140,244,134 $ 8,384,269 5.98% $ 1,707,752 • May: $ 342,864,090 $ 26,475,596 7.72% $ 4,017,279 • June: $ 447,662,470 $ 29,682,272 6.63% $ 5,126,081 • July: $ 909,758,986 $ 73,011,358 8.03% $ 9,864,777 • August: $2,192,424,918 $126,586,653 5.77% $17,908,518 • September: $2,875,068,662 $154,358,367 5.37% $18,822,193 • October: $3,254,941,875 $281,009,928 8.63% $43,725,136 • November: $3,464,334,989 $310,926,587 8.98% $47,174,614 • December: $3,788,795,762 $275,620,003 7.27% $42,274,267 SPORTS MARKETING 2022 • 51 • 8.3 Betting By Sports Fans Sports Betting In The USA, by GlobalWebIndex (www.globalwebindex.com), asked sports fans on which sports they would make a bet. Responses were as follows (percentage of respondents): Fan Of The Sport Would Make A Bet • NFL: 72% 61% • NBA: 66% 58% • MLB: 65% 53% • Boxing: 47% 42% • NHL: 40% 32% • NASCAR: 38% 28% • Horse racing: 29% 35% • MLS: 29% 21% • Esports: 27% 23% • WNBA: 20% 16% 8.4 Market Opportunities The legalization of sports betting has opened up opportunities in several sectors. Major League Baseball, the National Basketball Association, and the National Hockey League have entered into partnership agreements with gaming companies, opening a new revenue stream. Media companies have added sports betting programming to entice advertisers. And online betting sites have expanded their business. 8.5 Market Resources American Gaming Association, 1299 Pennsylvania Avenue NW, Suite 1175, Washington, DC 20004. (202) 552-2675. (www.americangaming.org) Eilers & Krejcik Gaming, 5 Corporate Park, Suite 110, Irvine, CA 92606. (310) 743-6239. (www.ekgamingllc.com) Legal Sports Report, 11700 W. Charleston Boulevard, Suite 170, Las Vegas, NV 89135. (www.legalsportsreport.com) SPORTS MARKETING 20202 • 52 • 9 SPORTS TRAVEL 9.1 Market Assessment SportsBusiness Journal and Tourism Economics (www.tourismeconomics.com) estimate annual spending by travelers, event organizers, and venues on sports-related travel at $45 billion. Up to 75% of this spending was lost in 2020 due to the pandemic. _________________________________________________________________ “Covid-19’s impact on tourism of any kind, let alone sports tourism, has been catastrophic. Very few American sporting events are taking place with fans inside venues, and some have been postponed or cancelled altogether.” SportsBusiness Journal, 9/7/20 _________________________________________________________________ The National Association of Sports Commissions (www.sportscommissions.org) assessed direct visitor spending associated with sports events, excluding professional leagues’ regular season games, at $12 billion. Travel by sports teams is estimated as follows:
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