To License Or Not to License: That Is the Question for Professional Sport Leagues and the NCAA (SPORT MARKETING AND THE Law) (Report‪)‬

Three recent cases that are currently pending in federal courts assert a variety of legal theories and, at first glance, may seem to bear no connection. However, a common thread links all three legal challenges: the business activity of licensing. These three cases, one of which will soon be heard by the United States Supreme Court, have the potential to dramatically affect licensing practices in both professional and collegiate sport. When one thinks of the sport licensing industry, the first thought may be of T-shirts, jerseys, and coffee mugs emblazoned with familiar names, logos, and mascots. The sport licensing industry ranks as one of the top revenue producers in the licensing world. However, as sport licensing has grown, it has also become more sophisticated, extending into goods and services well beyond the traditional T-shirt, jersey, or branded collectible item (International Licensing Industry Merchandisers' Association, 2009). Revenues from global licensed sports apparel and other goods grew by $3.1 billion in 2008 to $19.9 billion, according to the market research firm's annual estimate (Johnson, 2008). Sports leagues and other sports-related companies garnered five of the top 20 spots among leading global licensors. MLB registered $5.1 billion in global sales, followed by the NFL ($3.4 billion), the NBA ($3 billion), the Collegiate Licensing Co. ($2.5 billion), and NASCAR ($2 billion) (Johnson, 2008). Initially, the United States sport licensing business was dominated by the four major sports leagues--National Football League, Major League Baseball, National Basketball Association, and the National Hockey League (International Licensing Industry Merchandisers' Association, 2009). Each of those leagues runs certain licensing activities on behalf of its teams out of a centralized league office. The centralization of certain licensing practices for the professional leagues is the critical focus of the case currently pending before the United States Supreme Court, American Needle v. National Football League (2009).