The Lefton Report

New products, new licensees line up with the lucrative NFL

Published March 12, 2012

With the sports licensing business strong, the NFL coming off a Super Bowl with record viewership, and a decade of labor peace in front of the league, any concerns voiced by the 100-plus licensees gathered last week at Kansas City’s Arrowhead Stadium for the NFL’s 10th annual Consumer Products Summit were mild.

From earlier anxiety about an uncertain economy and whether there would be NFL labor peace, now there’s concern about the uncertainty of commodities. India’s recent decision to ban all cotton exports is giving agita to apparel manufacturers. And for every licensee displaying its wares across the Scout Investments club and suite level at Arrowhead, gasoline was the most closely watched variable. “Clearly, gas prices are something we’re watching, because the effect could be so far-reaching,” said WinCraft President John Killen. “Business is good now, but if we’re looking at $4 gas soon, you just don’t know what that would do.”

Another concern was the specter of rising royalty rates, not a surprise given the increasing strength of the NFL among consumers. Noting that the last rate increase was in 2004, Leo Kane told licensees that as their licenses came up for renewal, they should expect increases. Kane, NFL vice president of consumer products, did not offer specifics, but several licensees said they were paying 11 percent to 12 percent and expect an increase of one to two points. Given the NFL’s continued strength on TV and at retail, we didn’t hear any complaints.

Perhaps mindful of Commissioner Roger Goodell’s ambitious goal to increase NFL revenue from the current $9.4 billion to $25 billion by 2027, Kansas City Chiefs Chairman and CEO Clark Hunt told the assembled crowd that the NFL’s best days were yet to come.

“Some have suggested that the last 10 to 20 years were the NFL’s golden era, but looking forward, I’m really excited about our ability to continue that growth,” Hunt said. “We will continue to see the growth of the league as a 12-month entertainment vehicle.”

Hunt cited digital and mobile media, the construction of new stadiums in California, and international initiatives as elements that should drive continued NFL growth.

TEMPORARY HELP: Since the draft produces the NFL’s biggest offseason TV ratings, it should be able to support a dedicated retail space, right?

The league is partnering with marketing firm MKTG for a pop-up store in New York City in the MetLife building near Bryant Park. As many as 75 licensees are expected to offer products, including some proprietary items, within the 5,000-square-foot store that will open in April for a monthlong stand. The draft begins April 26.

“We’re trying to harness the energy of the NFL brand and the draft and make a real statement,” Kane said.

Nike’s Chiefs shirt was front and center at its booth. Photos by: TERRY LEFTON / STAFF

Adding to its own marketing acumen, the NFL has recently hired new marketing help, tapping personnel from Sony, Wal-Mart and the U.S. Tennis Association. “It’s about increasing our presence at retail in new ways and finding new ways to approach every event on our marketing calendar,” Kane said, “because we’re not just about the Super Bowl anymore.”

NEW KIDS ON THE BLOCK: Rights for new on-field licensees Nike and New Era begin April 1, and both were on hand showcasing their new NFL wares.

Nike will show NFL owners their new uniforms at the league meeting in Florida later this month, to be followed by an April 3 event in New York City at which a player from each of the 32 NFL teams will be present. However, inan attempt to build demand, the new jerseys aren’t expected to be available until a few weeks later, on draft day.

In Kansas City, Nike was showing a variety of sideline coaches wear and NFL-logoed versions of some of its most popular performance pieces, like the Destroyer jacket, the K.O. hoodie, and Nike Tempo women’s track shorts. Front and center at Nike’s booth was a red swoosh shirt that read “Chiefs Just Do It.”

New Era’s cap program will be three-pronged, with the draft caps screaming the name of NFL markets in large lettering; training camp caps in white, made from performance fabrics; and sideline caps that, while true to each team’s heritage, were fashioned from “made-from-scratch colors’’ for a new look, according to New Era President Pete Augustine.

New Era hats for training camp (in white) and the draft

Marketing will start around the draft, with New York Giants wide receiver Hakeem Nicks, Chicago Bears linebacker Lance Briggs, Buffalo Bills defensive end Marcell Dareus and New Orleans Saints linebacker Jonathan Vilma in a campaign called “New Era Laboratory of Capology.”

“Considering our [baseball] heritage, we want to get ourauthenticity in the football world established right away,” said Augustine, adding that his company hired 150 people to support its new NFL rights, with another 120 positions still to be filled.

Longtime sock licensee For Bare Feet hopes for a spike in shoe sales.

WOMEN AND CHILDREN FIRST: Underscoring the NFL’s contention that it has 80 million female fans in the United States were some female-targeted products on display, like KE Specialties’ lip gloss applicator that features a built-in light for easy application. Even more cutting edge, at least for the licensed sports businesses, were the various spike-heeled shoes (with a suggested retail price of $80) from longtime sock licensee For Bare Feet, which is now pushing a variety of footwear products that go over the sock, including demurely logoed footwear heels for fashionistas and woven boots for the Ugg set. “The customers are out there for this, both for NFL and NBA,” said Brian Lowe, For Bare Feet’s national sales manager.

Meanwhile, the NFL used the Chiefs’ K.C. Wolf mascot, along with some kids, to tell licensees about an expansion of its Rush Zone youth marketing platform. The animated show of the same name will relaunch in November on Nickelodeon and NFL Network. “We see a real opportunity here for a toy licensee,” said Tracey Bleczinski, NFL vice president of consumer products. “As much support as we’ve put behind targeting women for the past few years, we’ll be giving that and more to kids’ initiatives moving forward.”

Duck Tape is ready to stick it to the competition with a new lineup of NFL-logoed products.

LICENSING LINES: Winner of our ongoing “never saw a logo on that before” contest had to be Northwest’s team-branded ear plugs, debuting shortly with a suggested retail price of $9.99 for six pairs of the foam pads, which were touted as “ideal for loud events.” Like NFL games? And while we’ve seen logoed duct tape before, surely the recent granting of a license to ShurTech, which owns the Duck Tape trademark, takes things to a whole new level of licensed adhesion. … As always, the newest members of the NFL’s million-dollar royalty club were announced. Tervis Tumbler, one of a number a licensees producing an astounding array of licensed drinkware, water bottles and kitchen/tailgating items, joined the group, having grown its NFL business from zero to better than $10 million in three years. Also new to the club was Fabrique Innovations, which saw the value in adding sports licenses to Pillow Pets, which were already a plush hit. … Coming soon to a beach near you: Rashguard NFL-logoed swim suit and tops from Isaac Morris, at $24.99, or the more fanciful NFL-logoed board shorts from surf apparel king Quiksilver, which will run around $60.

Terry Lefton can be reached at tlefton@sportsbusinessjournal.com.