Sport Licensing: Process, Objectives, Issues, and Strategic Alliance

This report provides a detailed analysis of the sport licensing process, focusing on the key steps involved, the objectives and issues for both licensors and licensees, and the role of strategic alliances. It begins by outlining the seven key steps in the sports licensing process, including establishing strategic fit, determining products to be licensed, identifying target categories, performing due diligence, negotiating business deals, finalizing contracts, and managing the licensing program. The report then discusses the main objectives and issues that licensors must address, such as revenue generation, brand value enhancement, relationship building, distribution strategies, and brand protection. Similarly, it examines the objectives and issues for licensees, emphasizing revenue, brand value, relationship building, distribution, and brand protection. Finally, the report explores the concept of strategic alliances, providing an example of the alliance between Reebok International and the NFL, and discussing the strategic intentions, key challenges, benefits, and related issues of forming and managing such alliances. This document is available on Desklib, a platform offering a wide range of study tools and solved assignments for students.

Running head: SPORT LICENCE
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Name of the Student
Name of the University
Author Note

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Question 1
The question raised in the given scenario is the involved key steps of the sports licensing
process in XYZ Licensing Company situated in the United States, a company that is new in
licensing. Sport licensing is considered as the sport business executives’ business tool while
seeking the access to someone else’s owned intellectual property or allowing the permission of
using the IP of their own. There are some key steps which are involved in the sports licensing
process which the aforementioned company needs to take during the process of the sport
licensing. The first step is the establishment of strategic fit. The executive of sport licensing
needs to assess a strategic rationale and a complete strategic licensing fit within its wider
business strategy. The second key element is determining the products which are to be licensed.
The third key element is the identification and targeting the categories on the basis of strategy.
The fourth element is the identification and performance of the due diligence on the potential
partners. The fifth element of sport licensing process is the development and negotiation of the
key points of business deals. The sixth element of sports licensing process is the negotiation of
the final contract. The seven and final element is starting the management and implementation of
the license business/program.
Question 2
The raised question in this scenario is the main objectives and issues of the licensor
which they must address while they prepare to enter licensing relationship. There are various
objectives and issues of a licensor while entering into a relationship of licensing, which are:

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Revenue
Revenue is a vital source which is provided by licensing to both the licensor and the
licensee. A royalty is being received by the licensor for each and every licensed products sold by
the licensee. The National Collegiate Athletic Association (NCAA) can be considered as an
example. The licensing program is being used by them for generating revenue in order to
enhance and support its programs and providing scholarship funds or services rendered to
athletes who are NCAA affiliated college students.
Brand value
Licensees are selected by the licensors who will help in enhancing brand image of the
sport organization or the team. Signet licensing and Marketing which is a consultancy of South
Africa has the objective of establishing and developing brand value and brand awareness for the
clients.
Relationship
Sport licensing is used by the organizations in building relationship with the supporters.
Manchester United, an English soccer club has near 56 million supporters and fans in Middle
East by license implementation and by merchandising and reinforcing deals.
Distribution
Distribution in a widest possible forms both the licensor and licensee is necessary for
supporting the relationship and branding objectives. As per Signet Licensing and Marketing,
license program can be successful by implementing critical strategies of distribution.

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Brand protection
Protection of consistency and quality of a brand is considered important objective of both
the parties. Preventing counterfeiting of official merchandise is a necessary object. Counterfeit
merchandise may damage the reputation of the product as well as the sport.
Question 3
The raised question in this scenario is the main objectives and issues of the licensee
which they must address while they prepare to enter licensing relationship. There are various
objectives and issues of a licensee while entering into a relationship of licensing, which are:
Revenue
As like the licensor revenue is a vital source which is provided by licensing to the
licensor also. A royalty is given by the licensee to the licensor for the selling of each and every
licensed product. As an example Nike’s sponsorship with Cristiano Ronaldo may be considered.
Nike generated $31 billion revenue by finalizing a lifetime sponsorship deal with soccer star
Cristiano Ronaldo.
Brand value
Licensees are selected by the licensors who will help in enhancing brand image of the
sport organization or the team. The brand value of the global sports company Adidas from the
year 2016-2019 is 16.7 USD (Trenberth, 2013).
Relationship
Sport licensing is used by the licensees in building relationship and promoting official
merchandising with the supporters. The shirt sponsor of Real Madrid is Emirates for which the

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club gets almost 80 USD per year. Real Madrid has been topped the internet search in total 97
countries worldwide (www.realmadrid.com, 2019).
Distribution
Distribution in a widest possible forms both the licensor and licensee is necessary for
supporting the relationship and branding objectives. As per Signet Licensing and Marketing,
license program can be successful by implementing critical strategies of distribution.
Brand protection
Protection of consistency and quality of a brand is considered important objective of both
the parties. Preventing counterfeiting of official merchandise is a necessary object. Counterfeit
merchandise may damage the reputation of the product as well as the sport.
Question 4
The raised question in this scenario is discussing a strategic alliance with an example. By
way of strategic alliance, generally two companies decide of sharing resources of accomplishing
any specific beneficial project mutually. There are several definitions which excludes joint
ventures as strategic alliance, which says that strategic alliance contains less involvement and are
less permanent than any joint venture where a separate business entity has been created by two
companies by way of pool resourcing. One of the examples of strategic alliance is between
Reebok International and the NFL which was established in the year 2001 in order to further
engineering and developing of the business of NFL. By analyzing the case, the strategic
intention of the alliance formation, key challenges of the both organizations in management
and development of such alliance, derived benefits and the other related issues of the

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forming and actively managing the strategic alliance can be understood which are the main
objectives or goals of the partners entering strategic alliance (Hecox, 2007).

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Reference
Hecox, M. G. (2007). Strategic alliances in the sport industry: a case review of Reebok
International and the NFL.
www.realmadrid.com. (2019). Real Madrid, the most popular football team in the world | Real
Madrid CF. Retrieved from https://www.realmadrid.com/en/news/2018/08/real-madrid-the-most-
popular-football-team-in-the-world
Trenberth, L. (2013). The sport business industry. In Managing Sport Business (pp. 29-42).
Routledge.