Lets say I want to build and sell widgets with the logos of teams from MLB, NFL, NBA, or NHL, and/or the official league logo. Does a business pay a one-time fee to obtain these licenses or is it on a per-unit-sold basis, or is that subject to negotiation? Would I need to deal with each team individually (it has been suggested to me that this would be the case w MLB and its teams).
I’m having lunch to discuss this very subject w a couple friends of mine later this week, one a lawyer who has had some dealings w MLB, and an econ professor who studies pro sports. But I’d like some ideas beforehand if anyone has them, google searches have proved next to useless. Any tips from folks experienced in these matters would be appreciated.
I’ve had a client that was a licensee of several of the major sports leagues. The licensing was a very complex process, with a great deal of control retained by the leagues (or, I think in connection with MLB, it was with the player’s association). I wasn’t directly involved with the licensing, but I had to review it.
I don’t recall the particular financial terms, but the licensing fee was based on units and revenue, not a one time fee.
The leagues will want to have a great deal of input on the licensed products that you wish to sell. You may be unable to obtain a license if there are other similar licensed products out there.
I have found that the NFL wants somewhere around $500k to start up unless they approach you first, and you also have to have been in business at least 3 years and various other provisions that knock my humble widget business out of the running there (nfl.biz was the source of the info).
My next step is to work individually w a couple of local major and minor league franchises.
If you want confusing, try NASCAR. Besides getting the blessing from NASCAR, you have to deal with each team individually, then each sponsor of each team and driver individually. Then you have the contingency sponsors that are not tied to any specific team. At one point in the mid 90’s, Action Performance had contracts with over 400 different organizations, teams, and companies just so they could produce their line of diecast cars and other collectibles.