Licensing in the Sports Industry

Running head: SPORT LICESING 1
Licensing in the Sports Industry

SPORT LICESING 2
Introduction
As opined by Stim (2016), the sports licensing business prepares the contractual
document by which a sports organization gives its license to any company utilize the name, logo
or trademark on the products of the company. The company leasing the rights becomes the
licensee and the sports organization becomes the licensor. From the business point of view,
product licensing provides an opportunity to reach customers and sports fans either locally,
globally or nationally. Sports licensing has grown in the past few years and is considered to be
one of the most revenue generating in the licensing world. There are several licensing campaigns
for the sports events which involves the contribution of several organizations and universities in
order to gain revenues. It also depends upon the performance of the sports team.
Olympic Licensing Vs. Collegiate Licensing
According to Klimko & Caplanova (2017), Olympic licensing is an agreement that
allows a third party company to use the Olympic images, marks, designations and themes to add
value to the products of the third party company. The third party company has to purchase the
license rights using the Olympic images, marks and logos on their merchandise with earning 10
to 15% from the product sales revenues. On the other hand, as suggested by Papadimitriou &
Apostolopoulou (2018), Trademark licensing refers to the process which allows a licensee to
make and become a distributor of specific products and services under the trademark agreement
of the licensor. It is one kind of merchandising agreement which has been popular in the sports
industry.
The difference between both the licensing agreements is the relationship existing between
licensee's product and the third party. Through Trademark licensing, the licensor is not directly
involved in manufacturing of the products but in order to verify the product quality bearing the
trademark, the licensor will be involved. Where as in Olympic licensing the licensing is given to
add value to the products of the third party company.
Similarities in both the Licensing
Even when Olympic licensing and Trademark licensing are different in some aspects,
they are similar in one of the aspects. Olympic licensing and Trademark licensing are important
for businesses as it allows to reach new markets by the help of marketing and distribution