A new LSU licensing extension isn’t really that newsworthy. It makes sense for both the Collegiate Licensing Company and Louisiana State University. What’s interesting is the potential changes in college football that this deal could be signaling.
LSU Licensing Extension is a Sign of Things to Come
Licensing contracts are simple. Instead of LSU spending staff and time processing licensing requests, pursuing infringements and collecting royalties itself, it sells the rights to do so to a company like CLC. In addition to the contract value, LSU gets royalties off merchandise sales. In turn, CLC collects licensing fees from manufacturers and anyone else who wants to slap the LSU Tiger on something and sell it.
According to CLC’s press release, LSU has been a strong client. CLC says that LSU is their sixth-best selling brand. Royalties for LSU have increased 141 percent over the past decade. As a result, this deal made sense for both parties.
In addition to keeping both parties enjoying the benefits of the partnership, this deal signals potential changes. It’s further reason for conferences like the SEC to seek autonomy in football. It provides incentives for expanding the college football playoff. Finally, it provides a framework for athletes and schools to monetize their names and likenesses.
The inmates running the prison
The idea of Power 5 conferences becoming more independent of NCAA structures isn’t anything new. In many ways, it makes sense for both parties. While there are legitimate concerns, it’s a matter of when and how much more than if. Licensing contracts forged by individual schools, as opposed to conferences and/or the NCAA as a whole, is an example of the benefits of such autonomy.
Schools are able in this model to set their own price for their licensing rights based on what they believe they are worth. Licensing companies like CLC then act as the market, accepting or modifying that price based on actual brand performance.
These same principles could apply if these schools had autonomy in other areas, like benefits for athletes. Schools could set themselves apart from each other based on how well they treat those young men and women who play the games that this entire industry revolves around.
Us four and no more
Over 6,600 retail accounts across the globe already sell LSU products. It’s possible that number could still expand. One way, in theory, that could happen is by the inevitable expansion of the college football playoff.
Expansion of the playoff enhances the chance of inclusion for schools like LSU. Nothing would boost merchandise sales more than regular inclusion in college football’s premiere event. There are legitimate competitive concerns about watering down the product with too many teams. From a business perspective, however, playoff expansion has very few drawbacks. Licensing deals like this provide another reason to expand.
The machine is ready, just turn it on
Proposals were made to the NCAA on allowing athletes to profit on their likenesses and names. Licensing deals like this would provide a turn-key framework if that ever happens. Individual athletes could sign personal licensing deals with companies like CLC. Existing contracts with the schools could expand to include athletes. These companies already know how to protect the interest of schools. They could do the same for individual athletes.
At face value, this deal is just the extension of a partnership that has benefitted both parties. In the larger context of what it could mean for the future of college football, it’s interesting to think of the potential ramifications.
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