At a time when many an American business is struggling, one anchored in sports is a rousing success. Consider NFL Properties, the NFL's marketing and licensing subsidiary, which has been putting together one great year after another.
How good is NFL Properties? Some 350 manufacturers are licensed to produce more than 2,500 items bearing NFL logos, and their gross sales in such merchandise for fiscal 1991 are expected to have exceeded $2 billion. According to Frank Vuono, vice-president in charge of retail licensing, that's well over 30% better than the previous year's sales, more than 70% above the 1989 total and about 700 times the gross just six years ago. The league also has 125 corporate sponsors, and together they will pay an estimated $50 million this year to use the league's logo in their marketing campaigns.
NFL Properties is a privately held firm made up of three divisions—retail licensing, marketing and promotions, and publishing. Industry sources estimate that the company, which has 130 employees, will have revenues of about $140 million this year, most of it coming from retailing and marketing and promotions. And those sources expect business to continue growing at an annual rate of 15% or 20%.
One of the biggest growth areas is fashion, which is part of the retail division. NFL Properties dresses players, coaches and fans in a wide range of sportswear. NFL apparel is now sold in most of the country's major retail stores—Sears and Bloomingdale's are but two—and it is hotter than two-a-days in August. "Team-licensed products are saving the retail business," says Dan Stock, vice-president of Zubaz, which manufactures a popular and colorful line of zebra-striped sportswear. Adds Dan McElwain, a marketing programs manager for athletic footwear and apparel at J.C. Penney, which has been selling NFL gear for more than 20 years: "This type of apparel has suddenly become very fashionable. I eat dinner in a nice restaurant, and I see people wearing Dallas Cowboy sweaters. That's how they want to dress today."
Of course, there's more to retailing than selling clothes. NFL Properties has put league and team logos on bowling balls, comic books, doghouses and bags of potato chips, and most of these wares are selling very well indeed. Want a golf umbrella with the San Francisco 49er emblem? How about a Los Angeles Raider pool cue? A Green Bay Packer license-plate frame?
"The people at Properties are savvy and aggressive marketers," says Stuart Crystal, marketing director for Starter Corp., the top maker of NFL apparel. "They know what they want, and they go out and get it."
Marketing and promotions has also seen its share of revenue growth. In 1986 corporate sponsors paid somewhere between $25,000 and $750,000 apiece for promotional rights; this year they are shelling out from $75,000 to $5 million. NFL Properties has also begun to help NFL players pursue off-field business opportunities and currently exclusively represents 125 players for retail licensing efforts, according to executive vice-president John Flood.
Publishing doesn't contribute nearly as much to the bottom line, but it does well enough. National advertising in NFL stadium programs was sold out this past season, and the 1992 Super Bowl program, which was published by Properties, carried more than 100 pages of ads.
NFL Properties was started in 1963 to promote the NFL and protect the league's logos and trademarks, as well as to make money selling novelties like bobble-head dolls, T-shirts and hats. Business grew steadily, if not spectacularly. By 1969 NFL Properties was generating about $1.5 million in gross revenues from corporate sponsorships and from the sale of licensed products. Ten years later the figure had jumped to $100 million, and by 1986 it had hit $500 million. But the league's commissioner, Pete Rozelle, thought NFL Properties could do better. "Properties had always been more public relations than anything else," says Norman Bra-man, owner of the Philadelphia Eagles and chairman of the owners' committee that oversees the subsidiary. "But then Pete decided to take the restraints off. He wanted Properties to be more of a business, to realize its potential."
"Frankly, we were underdeveloped," says John Bello, who has been president of NFL Properties since 1988. "But we started working on different ideas, different promotions, different programs, different ways of selling our products. And then things took off."