Be true to your school - collegiate product licensing

Nation's Business, June, 1987 by Candyce Meherani, Rachel Orr

Be True To Your School As director of retail operations at the University of Southern California in the mid-'70s, Steve Crossland realized manufacturers and retail stores were making more money on the school's name and logos than USC was.

Anyone could make and seel merchandise bearing college logos--from sweatshirts to beer mugs--without paying for their use. Many collegiate symbols were not protected by trademark, and, even when they were, schools often didn't enforce their rights.

So Crossland started licensing USC's logos to selected manufacturers in return for a fixed royalty. Soon, USC had a sideline earning a six-figure income. In 1981, Crossland left USC and founded International Collegiate Enterprises of Woodland Hills, Calif., and expanded his licensing efforts to other schools.

Crossland was not alone in recognizing the market for collegiate product licensing. William Battle saw the opportunity in the early 1980s while working for Golden Eagle Enterprises, which primarily licensed products for golf stars. In 1983, Battle bought the sports management and licensing division of Golden Eagle, relocated in Atlanta and formed Collegiate Concepts, Inc.

In August, 1983, Crossland and Battle decided to unit the two companies as CCI/ICE.

Collegiate licensing is now a joint venture. Battle says the geographic differences between CCI and ICE have posed some difficulties, but in the long run being at two locations has been beneficial to the colleges and the two companies. "It is partly responsible for the tremendous growth rate that we've had," he says.

Today the licensing of collegiate products is a huge business--a quarter of a billion dollars a year, by some estimates. "The market has continued to expand at a rate of 50 to 75 percent a year," Crossland says.

Over the years the business has also diversified. "It's grown a long way from the cap and T-shirt business," Battle says. Today CCI/ICE licenses manufacturers to produce logo-bearing goods such as high quality glassware, silk neckties and sunglasses. The company also arranges for service-oriented businesses to include collegiate logos in promotional campaigns.

CCI/ICE controls a respectable chunk of the collegiate licensing business. Ten bowl games and 82 colleges pay CCI/ICE to arrange licensing agreements with businesses that want to use the schools' logos. The schools receive average royalties of 6.5 percent of wholesale. CCI/ICE also makes sure that the universities receive the proper amounts in royalty money and that licensed companies keep within their contracts' boundaries.

Consumers and retailers can recognize licensed products by the CCI/ICE "Officially Licensed Collegiate Products" label that appears on about 75 percent of the goods. Battle says once all consumers and retailers recognize this logo as the stamp of an official product, it will effectively enforce licensing. "It's still not having as much impact as we would like," Battle says, "but each year is getting better."

Although CCI/ICE is without direct competition from another independent firm, many schools do run their own marketing programs rather thna signing on with CCI/ICE. However, the partnership does manage to deal with many of these schools on special projects.

For example, last September CCI/ICE arranged for Libby Glass to produce glasses bearing the logos of all 10 Southwest Conference schools for a Mobil Oil Company promotion. Crossland says, "We only represent six of those schools, but we were able to bring the other four into this particular project, which resulted in nice royalty checks to all 10.

"We don't say we represent everybody; we don't want to represent everybody. But we do want to represent enough so that manufacturers with interests in this kind of marketing program will come to us. No manufacturer is going to spend the time [it takes] to run down 100 different schools."

One of CCI/ICE's most innovative programs involved a bank that established special savings accounts last year for fans of the University of Kentucky and the University of Louisville. Through CCI/ICE the bank was licensed to establish accounts and market them in the name of the consumer's preferred school.

The accounts bore a fixed interest rate, plus a bonus: If your school's basketball team made it into one of the final four NCAA championship games, your funds earned an extra .4 percent. For every additional game won in the playoffs, another .1 percent was added to the yield. And those who banked on the tournament winner--Louisville, as it turned out--reaped a full 1 percent on top of that.

In the course of the past year, CCI/ICE also contracted a company to put university logos on credit cards. Segments of the cardholder's annual fees and transaction fees go to the universities, and, so far, five schools have licensed the company. "It can be quite lucrative to the university if its members carry those cards," Battle said.

Occasionally those spending most of the dollars to purchase collegiate merchandise--students--also benefit from the profits. For example, Ohio State has earmarked $100,000 of its royalties for scholarships.