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The Politics of Licensing

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While the licensing business has historically been apolitical, over the last couple of years TLL has noticed a shift in attitudes in responses to our Annual Licensing Business Survey. Open-ended responses to questions like, “What are the biggest challenges this year?” have begun to include highly politicized responses clearly indicating a preference for political parties or candidates. The interesting part is that responses were incredibly diverse, and, as far as we can tell, equally split between ideologies.

Ergo, our sanitization of political opinions from Survey respondents. But that’s not an accurate representation of what’s going on.

It is clear from TLL’s Survey that everyone has an opinion—manufacturers as well as brand owners, not to mention agents and consultants. But the most outspoken businesses overwhelmingly tend to be licensees, specifically, toy manufacturers.

This last month at Licensing Expo, most of the brand owners we spoke to didn’t have much to say on the tariffs question, or how trade wars, growing nationalism, and increasing division would impact their bottom line.

One entertainment executive predicted that her company’s business would remain more or less unchanged, banking on the “nag factor”—after all, “parents will always be buying toys for their kids.” Others were betting on “new opportunities” like live events licensing and brand consolidation.

Another licensor noted that he didn’t believe companies should be taking any public stance on political issues at all, no matter what the cost to his business. Other executives feared marginalizing their consumers, while others still felt that voicing their opinion wouldn’t make a difference.

This strikes us as odd. Consumer brands have become extraordinarily adept at adapting a public voice for socio-political issues (like gay rights, gender parity, racial equality, etc.), but suddenly it’s too darn hard to find a way to talk about economic issues directly impacting a corporation’s bottom line?

So, we decided to ask some more people how they felt about politics in licensing. And, to borrow the words of one respondent, we were “very uncomfortable with this survey.” (Thanks for responding anyway!)

Take these results with a grain of salt, because, with only 98 respondents, this survey has our smallest sample size ever.

Ten respondents were located outside the U.S., mostly from the U.K. and Latin America. In part because of the smaller size, we didn’t break out their political inclinations as a group, but included their answers to other questions.

Within the U.S., respondents hailed mostly from the west coast (30%) and northeast (29%), followed by the southeast (20%), midwest (10%), southwest (7%), and south-central (4%). Almost half were from California (27%) and New York (19%); within these states, roughly half pointed out that they’re in the “suburban” areas outside major cities. Half (50%) of Californians identify as left-leaning, while 43% of New Yorkers say the same. The rest of the country is evenly split with 33% each identifying as right- and left-leaning (the rest are either independent/centrist or did not self-identify). New York-based companies were rated as the most politically active (2.7), followed by California (2.5) and the rest of the U.S. (2.2).

At any rate, it’s a highly representative picture of who’s who in licensing, according to the Licensing Sourcebook Online.

That goes for function as well: a good share of licensors (38%) and their agents (34%), licensees (36%) and their agents (16%), and consultants/service providers (7%) all sounded off (multiple responses allowed). Licensees were the most politically engaged group (4.2) behind only consultants/service providers (4.6). The most engaged companies, however, were consultants/service providers (1.9) and agencies for licensees (1.7) and licensors (1.6). Licensor-companies were the least engaged (1.2).

As always, we allowed respondents to skip or elaborate on any question they chose. The most under-reported metric was for political view (62% self-identified with 20 different political labels).

For 69% of answers, we had enough data to determine if a respondent leaned left (50% of U.S. respondents), right (34%), or was an independent/centrist (16%). Note that these positions include a wide range of ideology; “left” includes both the moderate democrat and the democratic socialist, while “right” includes both the constitutional conservative and the libertarian.

This was obviously a loaded question. One respondent wrote that it was “too complex to write about here,” when asked about their political identity, while four penned manifestos of over 100 words (the average response totaled under 10 words).

So, why ask? First, many respondents claim “most business execs are right-wing,” or vice-versa, but this is not reflected in our results. Second, this data helps to benchmark responses to other questions in the survey.

When asked how politically engaged they were on a scale of 1 to 5 (from “not at all” to “extremely”), the average baseline for all respondents was 3.9 with both right- and left-leaning respondents indexing slightly higher at 4.2 and 4.0, respectively.

When asked the same question about their company and/or its brands, the average baseline for political engagement on a scale of 1 to 5 was much lower at 2.4. Surprisingly, those who reported that their company was more politically active were also more likely to think that their company should be more active (take a “stronger” stance).

These execs are in the minority, however: 32% of all respondents reported that their company is “not at all” politically engaged and believe that it should take the “same” or a “weaker” political stance.

This turns out to be largely a function of whether execs believe that “being politically engaged” is “good for business.” Half (53%) think not, while the other 47% do. No one that answered “yes” thought that their company should take a weaker stance on political issues, while 85% of those that answered “no” said it should stay the course (the rest were equally split between taking a stronger or a weaker stance). Some execs voted “no” but indicated that their company is nevertheless politically active “because the country is in crisis.”

The general consensus is that “positive initiatives” based on broader “issues” supported by the “greater good” can help bring employees and consumers closer together. And “talking about the potential impact” of certain policies to make business decisions or influence society is generally considered acceptable.

Meanwhile, “exclusionary” policies and “taking sides” is “a good way to make enemies” in a world where “half the population” is the on “the other side.”

While “it is naive to think that politics and business are not linked,” companies must “be careful” and “thoughtful.” Most agreed that businesses need to be aware of how government decisions affect them, but recognized the need to respect the diverse personal politics of their employees. As one right-leaning exec noted, “handled correctly,” adopting a political voice “can lead to great financial benefits.” A few pointed out the need to engage younger, more politically aware consumers in a meaningful way as another reason being politically engaged is good for a company’s bottom line. Another noted that businesses without “socio-political activities or humanitarian programs are seen as unsophisticated” by the market.

A minority claimed that politics are “not important,” a “distraction,” and have “nothing to do with our products.”

Trends come in pairs. One right-leaning exec claimed that “leftist businesses always suffer,” while a left-leaning exec said the same about companies adopting policies that are “too conservative.” Chick-Fil-A was used as an example to prove both points. A couple wish they could “be more political” but fear losing business (again, both by one left- and one right-leaning exec).

We asked licensing execs to break down three types of issues: those that are personally important to them as well as those “essential” for companies to tackle and too “toxic” to touch.

A minority of respondents claimed that all political issues are toxic, while a couple narrowed that rule to only “social” issues or to taking stands “based on religious views” like “homosexuality or abortion.” Some thought only certain companies can “get away” with expressing political views, e.g., “beauty companies can promote feminist issues.”

On the other side, a number of respondents recognized that “any issue is potentially toxic, but manageable if handled respectably, and with responsibility.” To that end, some claimed that any issue can be put on the table.

Surprisingly, the list of “toxic” issues didn’t reach ten, while the other two lists counted at least thirty. The vast majority of respondents opined that issues directly related to a company’s bottom line, such as wages, taxes, trade policies, and regulations, are appropriate for companies to tackle.

A significant share of both right- and left-leaning respondents cited the environment, conservation, and sustainability as top issues that companies should directly address without much push-back, e.g., by adopting sustainable practices like recycling or lowering emissions. Many respondents pointed out that any company can start taking on income and gender inequality in an “authentic,” meaningful way by enacting policies to address them internally.

We end with the words of one exec: “Be responsible, be focused but use your influence for good.”


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