Bloomberg News

Kentucky College Basketball Title Brings 40% Rise in Royalties

August 07, 2012

University of Kentucky royalties from licensed merchandise sales rose 40 percent in the past year, helped largely by the school’s eighth college basketball national championship.

Merchandise royalties at the Lexington-based school, which won the National Collegiate Athletic Association tournament title in April, grew to $6.73 million in the 12 months ended June 30 from $4.80 million the previous year, according to Jason Schlafer, the senior associate athletic director for corporate and university relations.

The Wildcats moved to No. 3 from No. 7 in an annual list of top collegiate merchandise royalty earners released by the College Licensing Co., a division of IMG Worldwide. Kentucky’s successful season and basketball history helped it move into the top three, said Cory Moss, a vice president and managing director for Atlanta-based CLC. The University of Texas remained No. 1 among schools the company tracks.

“The basketball championship is obviously the key driver,” Moss said yesterday in a telephone interview. “The size of Kentucky’s alumni, student population and fan base, and their long tradition of basketball success certainly helped as well.”

The rankings cover royalties reported from July 1, 2011, to June 30, 2012, by clients of CLC, which includes about 200 schools, conferences and bowl games. The company doesn’t represent every major-conference school, with Ohio State University and the University of Southern California among those not on its list.

Texas topped the list for the seventh consecutive year, followed by the University of Alabama, which this year won the Bowl Championship Series football title.

Texas Football

Texas became CLC’s top-selling school in 2005-06 after quarterback Vince Young led the Longhorns to the national football championship.

“It was a combination of that all hitting at the same time,” Moss said. “And it’s not just football when it comes to Texas, they are successful in other sports, especially basketball, baseball and track.”

The Wildcats were the top-ranked college basketball team for the final eight weeks of the 2011-12 season and won their first title since 1998.

Schlafer said the school benefited by preparing for the championship with key partners. When the Wildcats beat Kansas to win the title in April, Kentucky had already worked with Nike Inc. (NKE:US) to ensure that as soon as the game ended there was merchandise available commemorating the victory.

Royalty income at Kentucky is split between the athletic department and the university president’s office, Schlafer said.

“We have one of the premium national brands already,” Schlafer said. “When we win, there’s just this thirst to buy our product.”

Industrywide Sales

Industry sales grew to $4.6 billion from $4.3 billion last year, a typical increase, according to Moss, whose company recently signed a deal with online flower shop FTD.com, Inc. to sell dyed roses in the colors of major NCAA universities.

Nike, which this year began a five-year licensing agreement with the National Football League, was the top college apparel licensee, followed by Knights Apparel Inc. and Gear For Sports. Nike has held the top spot in 11 of the past 13 years.

Video game maker EA Sports, a unit of Electronic Arts Inc. (EA:US), topped the list of non-apparel licensees for the eighth consecutive year.

Leading the local licensee category was Lexington-based Kentucky Wholesale Inc., a manufacturer of officially licensed products for the Wildcats and the University of Louisville.

*T CLC’s TOP 20 LICENSED MERCHANDISE-SELLING UNIVERSITIES ====================================================== 1. University of Texas, Austin 2. University of Alabama 3. University of Kentucky 4. University of Florida 5. University of Michigan 6. Louisiana State University 7. University of North Carolina 8. University of Georgia 9. University of Notre Dame 10. University of Oklahoma 11. Auburn University 12. Pennsylvania State University 13. University of Nebraska (10427MF:US) 14. University of Arkansas, Fayetteville 15. University of Wisconsin 16. University of Tennessee (50986MF:US) 17. West Virginia University 18. University of South Carolina 19. Texas A&M University 20. University of Missouri





To contact the reporter on this story:
Eben Novy-Williams in New York at 
enovywilliam@bloomberg.net

To contact the editor responsible for this story:
Michael Sillup at 
msillup@bloomberg.net




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Companies Mentioned

  • NKE
    (NIKE Inc)
    • $74.28 USD
    • 1.19
    • 1.6%
  • EA
    (Electronic Arts Inc)
    • $27.45 USD
    • -0.14
    • -0.51%
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