Law Firm Tells CLC, Universities Not to Limit Licensed Apparel Sales

A Washington, D.C.-based law firm has sent a letter to the Collegiate Licensing Co. and 27 Football Bowl Subdivision schools demanding that they stop an alleged “concerted effort” to limit the number of manufacturers allowed to make collegiate apparel items sold in a wide range of retail stores.

According to a report in USA Today, Attorney Steven G. Bradbury of Dechert LLP declined to identify specifically whom his firm is representing, saying his clients have not authorized him to name them. But in his five-page cease-and-desist letter June 9 to IMG College; its licensing division Collegiate Licensing Co.; and the schools, he writes represents “various stakeholders who share a common interest in preserving competition and choice in the supply of licensed collegiate merchandise.”

At issue is whether the schools are violating anti-trust laws by heavily
narrowing the number of companies they license through CLC to produce
certain items sold in certain types of stores, in this case T-shirts and
fleeces sold at outlets including department and sporting goods chain
stores that are regional or national but not quite on the scale of a
mass-market retailer like Wal-Mart.

“By severely reducing the number of licensees and eliminating
competition from the excluded suppliers, the restraint will allow CLC
and the universities to garner increased royalty revenues from the
remaining licensees, both through higher royalty rates and through
higher wholesale prices. . . . The increased fees and prices are imposed
on retailers and, of course, are ultimately borne by consumers,”
Bradbury wrote.

IMG College spokesman Andrew Giangola said in a statement released to USA Today that the letter’s allegations are “outrageous and unfounded.”

In his statement, IMG College’s Giangola elaborated:

“As schools become more advanced brand stewards, some schools have made their own decision to . . . effectively grow and protect their respective brands, enhance their respective competitive position, generate revenue for the respective institution, and align better with the respective school’s social responsibility plan. . . . More sophisticated strategic brand management benefits schools, best-in-class licensees, and consumers. We are confident each school can and should continue to make its own decision about how to best manage its brands.”