Exploring Lucrative Opportunities: Licensing Agreements in Emerging Sports
In the ever-evolving world of sports, a culturally rich and diverse market to play, watch, and support, licensing agreements are becoming increasingly lucrative, especially in emerging sports. Whether it’s an international sport growing in popularity in a particular country (a great example being Lionel Messi, an internationally famous football/soccer player whose signing with the US’s MLS drove surging sales in jerseys, making it Adidas’ best seller across all sports), a new format of an already popular sport that’s more inclusive of age or disability like Flag Football, or a surge of popularity with a new demographic, fans are ever-so-keen on supporting their favorite teams and “sporting” their merchandise. This article will delve into why these new sports or sports trends present vast opportunities for licensees and how FADEL’s LicenSee™ can help navigate this dynamic landscape effectively.
Background on Licensing Agreements in Sports
At a glance, licensing agreements in the sports industry involve contracts between licensors (sports organizations) and licensees (manufacturers, retailers, etc.). These agreements could include properties like logos, player names, likenesses, and numbers to be put on physical products like T-shirts, hoodies, drinkware, trading cards and other sports memorabilia or be licensed for something digital like a video game. For example, the NBA licensing their jerseys to Fortnite, after Epic Games (the creator of Fortnite) revealed their smashing success with their licensed NFL skins bringing in $50 million in revenue. In return, licensors receive a royalty fee based on sales.
Sports organizations can expand their brand presence and generate additional revenue without the complexities of manufacturing and retailing, while licensees can capitalize on sports teams’ established fan base and brand recognition.
How Licensing Differs from Other Sports Marketing Strategies
Licensing differs from traditional sports marketing strategies such as sponsorships and endorsements. Sponsorships involve financial support in exchange for brand visibility during events like having a logo on a jersey or banner, while endorsements involve athletes promoting a brand through various media, like a popular player promoting a consumer goods item on a commercial or on social media.
Licensing, on the other hand, allows licensees to leverage the pre-existing loyalty and brand recognition of sports teams. This results in a revenue stream through product sales, unlike active marketing campaigns that require continuous investment. Licensing offers a sustainable model where merchandise sales perpetuate income without ongoing promotional expenses.
Why Licensing in Emerging Sports Is Growing
The recent Sports Licensing Summit in New York highlighted significant growth opportunities for licensees in emerging sports. Tom Cove of the Sports and Fitness Industry Association (SFIA) noted that early sports participation often leads to lifelong fandom, a trend particularly visible with the NFL’s promotion of flag football. The NFL’s focus on flag football, now extended from kids’ leagues to the Pro Bowl, is set to gain even more traction with its inclusion in the 2028 Olympics. With 130 NFL licensees and increasing engagement among younger and female fans, the market is ripe for expansion. See more on Flag Football licensing here.
Another sport on the rise is pickleball, which has seen an astonishing growth rate of 223% over the past three years. Its popularity spans all age groups, particularly seniors and youth under 16. The merging of top pickleball leagues and new broadcast contracts with ESPN signal its readiness for prime time. As pickleball’s popularity grows, so does the opportunity for licensees to engage with a broad and enthusiastic audience. If you’re eager to know more, see this article here.
Successful Examples of Licensing Agreements in Emerging Sports
Flag football and pickleball offer great examples in emerging sports that are ripe for of licensing agreements, as these trend emerge. The NFL’s promotion of flag football not only broadens the sport’s appeal but also opens up numerous licensing opportunities for products targeting younger audiences and international markets. This initiative will likely increase the demand for licensed merchandise, from apparel to equipment, further boosting the sport’s visibility and revenue.
The rise of pickleball from a niche sport to mainstream popularity has seen a dramatic increase in licensed product offerings. From paddles to apparel, licensees are tapping into a rapidly growing market with a diverse and dedicated fan base. The broadcast of pickleball matches on major sports networks like ESPN amplifies this effect, showcasing the sport to a broader audience and driving demand for licensed products.
Seizing the Moment with FADEL’s Sports Licensing Solution
As licensees explore the diverse opportunities in sports licensing, managing these agreements and maximizing performance becomes critical. This is where LicenSee™ By FADEL steps in, offering a comprehensive solution tailored to the needs of the sports licensing industry.
LicenSee’s features include streamlined royalty processing, ensuring consistency and accuracy in financial operations. The software provides full visibility into contract obligations, helping licensees manage their agreements efficiently and minimize errors. By optimizing licensing operations, FADEL empowers licensees to maximize their revenue potential and seize new opportunities in the dynamic landscape of sports licensing.
Conclusion
Emerging sports offer licensees a wealth of opportunities to tap into new markets and engage with growing fan bases. The strategic advantage of licensing agreements, combined with the advanced capabilities of LicenSee™ by FADEL, positions licensees to navigate this evolving market effectively. As the popularity of sports like flag football and pickleball continues to rise, those who leverage these opportunities will be well-positioned to achieve significant growth and success in the sports licensing arena.
