Teams as Brands A Review of the Sports Licensing Concept

Rick Burton Australian National Basketball League

Whereas a great deal has been recorded on sponsorship's definition and the ways in which sponsorship or team identification is thought to work, the literature is less comprehensive when acknowledging or discussing the sports marketing activity known as licensing. Irwin, Sutton and McCarthy (2002) suggested licensing programs, as engineered by teams or leagues, exist for the purpose of supporting three fundamental benefits: (a) promotional exposure, (b) profit from license application, and (c) protection against unauthorized logo usage.

Licensing is a vibrant marketing concept and draws its relevance from fan identification, which Sutton, McDonald, Milne, and Cimperman (1997, p. 15) defined as "the personal commitment and emotional involvement customers have with a sport organization." Mael and Ashforth (1992) suggested that when fans identify closely with a sport organization (i.e., a team) "a sense of connectedness ensues" and the fan begins to define him- or herself in relation to the organization. Wann, Hamlet, Wilson, and Hodges (1995) suggested fans come to see themselves as "extensions of the team" and Sutton, McDonald, Milne, and Cimperman (1997, p. 15) wrote of sports fans generating notably high levels of "emotional attachment and identification."

Given that all sport teams must ultimately win or lose the games they play, additional theory such as Cialdini, Borden, Thorne, Walker, Freeman, and Sloan's (1976) BIRGing work, Rooney's (1974) pride in place, or Wann and Branscombe's (1993) team identification work provided a foundation that fans clearly identify with teams and are willing to represent those teams with various behaviors. Cialdini et al. identified BIRGing as a consumer behavior that stood for basking in reflected glory and suggested that when a fan's sports team won, fans of the team usually articulated that victory in language resembling the words, "We won" and were inclined to wear team colors or licensed items bearing team logos, graphics, or trademarked words. Cialdini et al. posited the fan was able to see him- or herself as a satellite member of the team and believed (in varying degrees of commitment) that his or her avidity helped play a role in the team's success. Not surprisingly, the most visible method for reflecting the team's glory was for the fan to purchase and wear licensed clothing in public. In doing so, the fan moved one step closer to perceived team membership and achieved, through this identification, an elevation of status generally not possible in their normal jobs.

Lever (1983) wrote of this behavior and suggested sport involved people jointly by providing common symbols, a collective identity and a reason for solidarity. This supports Aaker's work (1991) as described by Gladden and Milne (1999) in discussing brand equities where "positive associations with a particular brand name (or logo/mark) adds to the value provided by the product/team" (Gladden & Milne, 1999, p. 21). Thus, teams that win frequently generate a growing willingness to BIRG and are likely to profit from increased revenue (from selling team-identified items) and increased public visibility (from fans paying for the privilege to wear the team's brand on their bodies for free).

In fact, while studying the Atlanta Braves baseball team and sponsors CocaCola and Auto Zone, Dalakas, Rose, and Aiken (2001) and Dalakas and Burton (2002) found that the more a fan is identified with a team, the greater the likelihood the fan would understand the role of sponsorship and support the team's sponsors in retail settings. Madrigal's (2000, 2001) comprehensive research with American college football fans also showed that highly identified fans share a norm that suggests attitudes toward properties contribute to a consumer's intentions to purchase sponsors' products. Thus, the team identification benefit not only goes beyond the team's branded image but also serves the equities of players, broadcasters, and team sponsors. It also gives credence to a popular refrain often uttered by NASCAR auto manufacturers— "Win on Sunday, Sell on Monday"—because the victory translates into retail benefit.

A team that loses, however, creates a situation called cutting off reflected failure (Wann & Branscombe, 1990; Wann et al., 1995) and exists as part of the social identity theory literature to explain a fan's desire to disassociate with failure or a negative event or outcome. When a team loses, many fans announce, "They (the team) lost." Constant CORFing from fans means teams not only miss out on revenue from licensed merchandise that goes unsold but also lose the generation of positive team visibility (achieved through BIRGing), which would interest sponsors. It is feasible to suggest that teams that lose consistently and start their seasons with losses (i.e., the Cincinnati Bengals of the National Football League (NFL) or Los Angeles Clippers of the National Basketball Association (NBA) will suffer from smaller crowds at their games, generate lower TV ratings, and face a more difficult time selling team advertising and sponsorships the following season.

But where did this sport branding process start? England's Football Association traces its roots to a November 1863 meeting when Eton, Rugby, Winchester, Westminster, and Harrow agreed to unite in their management of English football. Logically, each of these schools sported either a coat of arms, crest, or school insignia to differentiate the value of the educations they provided.

Six years later, in 1869, the Cincinnati Red Stockings (later known as just the Reds) became baseball's first professional team (Zimbalist, 1992) and presumably established the first American team sport brand. More than three decades later, America's Major League Baseball (MLB) was created in 1903 when two rival baseball leagues merged (Burton, 1999b; Helyar, 1994).

American football, in the form of the NFL, would not start until June 24, 1922, when the American Professional Football Association (APFA) mor-phed into the NFL. On that same afternoon, the Chicago Staleys became the Chicago Bears and the previously banned Green Bay Packers (dismissed from the APFA for using college players) were re-admitted into the fold as members of the new league (Burton & Crow, 2002; NFL, 1994).

It is difficult to pinpoint the first time licensed clothing was sold but one of the earliest licensing deals may have taken place in 1928 when David Warsaw, a ceramics manufacturer in Chicago, approached Philip Wrigley, owner of baseball's Chicago Cubs, and requested permission to create and sell cigarette ashtrays shaped in the configuration of Wrigley Field (Burton, 1999b). Warsaw agreed to pay the chewing gum magnate a financial royalty for every ashtray sold. As recounted by Warsaw's son Jim, Wrigley said yes, and from ashtrays the Warsaw family moved to celebrity bobble-head dolls (featuring baseball and football players), team T-shirts, and hats, and ultimately emerged in 1963 as the first licensee of the NFL when NFL commissioner Pete Rozelle created NFL Properties "to enhance consumer affinity and expand market penetration. The NFL thus became the first American sports league to launch a sport licensing program. The creation of such a group within the league (the NHL's properties arm is called NHL Enterprises) is designed to facilitate the organization's branding strategy through less expensive channels of marketing communication. Ultimately, licensees deliver the organization's intellectual property via logos, designs, phrases, trademarked color patterns, insignias, and icons (Irwin et al., 2002).

Since 1963, most professional sports teams in the United States, Europe, Japan, and Australia have embraced the royalty revenue generated by licensees and eager fans. In fact, according to Bernstein (2002), sport-licensed product in 2001 accounted for U.S. $10.5 billion or roughly 5.4% ofthe U.S. $194.6 billion American sport business industry Table 13.1 breaks out licensing revenue by league or governing body.

In fact, for a while, sports licensing was the fastest growing area of the sports promotion arsenal and grew from $5.35-billion in 1990 to $13.8 to billion in 1996. But between 1997 and 2002, market saturation, manufacturing consolidation, and societal changes toward sport (e.g., aging Baby Boomers, advent of the Internet, declines in TV sport broadcast ratings) has meant the revenue produced from traditional sports licensing has hovered near $10 billion annually.

Continue reading here: The Sport Atmosphere

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