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Collegiate

NCAA Tournament Scores $20–35 Million in Licensed Retail Sales

According to TLL’s Annual Licensing Business Survey, collegiate properties generated $3.6 billion in licensed retail sales in the U.S./Canada in 2017. That marks a 2% increase from 2016, and includes all colleges, universities, and their respective sports teams. More specifically, TLL estimates that retail sales of collegiate properties tied to the NCAA Tournament alone generate anywhere between $20–35 million in a year. Licensed retail sales tied to the professional NBA league, by contrast, totaled $2.75 in 2016 with a 8.3% rise from 2015 (2017 figures have not yet been finalized).

The Villanova Wildcats became just the eighth school to win at least two NCAA men’s basketball championships in a three-season span. And while the team had the crowning win, it wasn’t the only winner in this year’s NCAA tournament.

The breakout licensing story has been Loyola-Chicago, the first No. 11 seed to reach the championship game. Its Gryffindor-esque colors; colorful 98-year-old team chaplain, Sister Jean Dolores Schmidt; and Cinderella story charmed the hearts of viewers around the world. And according to Fanatics, Loyola was leading all college teams—including fellow Final Four contenders Kansas, Michigan, and Villanova—in merchandise sales in the lead-up to the final game.

In approving her image and likeness for use on merchandise including socks, t-shirts, and other apparel gear, Sister Jean directed that royalties be directed to the Loyola Athletic Fund. The most popular merchandise was a bobblehead (over 5,000 sold in 48 hours), perhaps because NCAA rules prohibit sales of those for college players. A portion of bobblehead sales also go to support Schmidt’s Sisters of Charity of the Blessed Virgin Mary. Loyola’s agent, Learfield Licensing Partners, confirmed that the school’s cut was a standard 12% royalty.

And while the Jayhawks didn’t end up winning the national title either, the University of Kansas will get a nice boost to its licensing program. KU Athletics estimates that it could earn between $200,000–300,000 in licensing revenue from this tournament (or roughly $2.5–3.6 million in retail sales), which would be split evenly between KU Athletics and the university.

Curious as to what a typical royalty scheme looks like for a collegiate program? According to KU Athletics, its standard royalty rate is 12% for licensed products; during the NCAA Tournament, the rate climbs to 18%, with the NCAA taking 6% and the university taking 12% of the wholesale price. A Final Four-themed product, featuring the four competing teams in its design, would yield 3% of sales to each school.

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