Sports licensing agreements help promote teams or individual athletes through merchandise. Such contracts give licensing companies the right to use a team’s name and logos. Sports licensing is beneficial for both parties, for business, it is a possibility to reach a particular market and for the sports organization, it is a way of advertising their name. However, certain challenges are common to the industry.
One of the major issues that the sports licensing field faces is counterfeiting, and fraudulent activity associated with merchandise. It is difficult to avoid this problem even when the trademark is registered through the licensing agreement. According to Blackshaw (2011), counterfeit is especially prominent in large organizations such as the Olympic Games, the logo of which is widely misused (p. 228). It is important to include all the relevant provisions in the contract, clearly stating the legal procedures that need to be applied in the case of fraud (Blackshaw, 2011, p. 228). To prevent further challenges associated with counterfeit items, both parties should know what their jobs are when the situation of fraud occurs, so neither the Licensor nor the licensee loses money or time.
Noticing and attempting to stop all counterfeit items from being manufactured and sold under a licensed trademark is a complicated task. However, it is possible to reduce the number of such products by placing more responsibility on the licensor. Ennis (2020) suggests that “it requires proper monitoring of licensees in terms of due diligence in the first instance” (p. 9). The licensor should manage the process and quality of the items manufactured by the licensee (Ennis, 2020, p. 9). Therefore, to decrease the number of cases of fraudulent merchandise, teams and sports organizations should carefully control the work done by the manufacturer.
References
Blackshaw, I. (2011). Sports licensing and merchandising agreements. In Sports marketing agreements: Legal, fiscal and practical aspects (pp. 223-252). The Hague, Netherlands: T.M.C. Asser Press.
Ennis, S. (2020). Sports marketing: A global approach to theory and practice. Cham, Switzerland: Springer Nature.