In an interview with Reuters, an official at the Collegiate Licensing Co. predicted that retail sales of college fan merchandise could be down 7% this year. Last year, sales reached $4.3 billion.
“Obviously, the recession puts a damper on everything from a retail sales perspective,” Derek Eiler, senior vice president and managing director of Collegiate Licensing Co., told the newswire service.. “All the leagues, no different than the rest of the free world, have definitely seen declines this year.”
The decline would place its annual sales at around $4 billion, and end its roughly five straight years of 8% annual growth.
The article also noted that CLC, which was acquired by IMG Worldwide in 2007, controls 80% share of all college licensed revenue, up from 50% 15 years ago as more schools have consolidated their trademark rights with CLC.
“They realize that to go compete for retail shelf space, you have to get beyond the college community if you're going to grow your licensing brand,” said Eiler. “You're really competing with the NFL, Disney, other licensors out there.”
Under most arrangements, manufacturers pay a royalty of 8% to 10% on the wholesale price of an item to CLC. CLC in turn takes a cut of 15% to 40% depending on the school's size and sales with the remainder going to the school. Contracts typically run eight to 15 years, Eiler said.
Eiler said sales could be turning around with the economy picking up and football season arriving. He also noted that the North American college sports segment continues to a major licensing player. In the athletic space, last year's $4.3 billion in retail revenue trailed only MLB's $5.1 billion.
Apparel continues to be CLC's largest licensed category, accounting for about 60% of the market. But many non-apparel items such as video games and tailgate tents are growing faster.
