NFL's `Other Business' Grosses $2 Billion

The National Football League is more than just football. It is also jackets, shirts, socks, pajamas, baby bibs, caps, blankets, games, beach towels, trinkets, key chains, squeaky toys, jewelry, coffee table books, magazines and trading cards.

That's nearly $2 billion worth of jackets, shirts, socks, pajamas, bibs, toys, jewelry, books and trading cards - and anything else that carries the imprint of the NFL or any of its 28 teams.

That, at least, is the estimated retail value of the products licensed to carry the NFL emblem, sales of which produce enough revenue from licensing fees to pay each team's annual assessment to run the league and to raise millions for NFL Charities, the league's charitable arm.

The money is there because merchants have found that whatever the item or promotion, from cheap trinkets to a $1,000 Dolphin team jacket, the NFL identification sells.

"It's exceptionally powerful," Phil Mattina, Foot Locker's vice president of apparel and accessories, said of the value of NFL identification on products. "It's very important to our (operation) and it's growing."

Use of the NFL logo, as well as team insignias, color combinations such as the black and silver of the Los Angeles Raiders or the blue, red and white of the New York Giants, or the Super Bowl emblem, is tightly regulated by NFL Properties Inc., the league's umbrella marketing company.

The idea for a central licensing program was initiated in 1963 by then-NFL Commissioner Pete Rozelle.

"He thought it would be a great asset for a marketing company like NFL Properties, sort of a one-stop shopping idea," said John H. Flood, executive vice president for NFL Properties. "Instead of going to separate teams, manufacturers could go to one marketing company like NFL Properties."

Before any company can manufacture any item bearing the logos etc., it must pay an NFL Properties fee for the licensing right to do so.

"In this business, we're dealing right from the mom-and-pop operation that may make pencils, or a trinket of some sort, all the way up to the largest apparel manufacturers," Flood said. "We probably have about 500 manufacturer licensees who make about 5,000 different products."

NFL Properties jealously guards its trademarks and watches the market closely for companies that try to duplicate apparel without paying the NFL for the right to use the logos. About $1.5 million is budgeted annually for trademark protection - fighting counterfeit products, or knockoffs.

The company uses an extensive network of investigators, or "sales representatives," who keep watch over department stores and other retail outlets around the country to report on unlicensed pvoducts. Sales personnel of licensed companies also check on bogus products.

Over the years, NFL Properties has succeessfully pressured and sued all manufacturers who have used team colors and names without license.

NFL Properties, Flood said, generally charges manufacturers nine percent of the wholesale cost of their items, which, he said, is not really that much, considering the profits involved.

"We wouldn't have people clamoring for licenses if they weren't making a profit," he said.

Gross sales of NFL-licensed products is nearly $2 billion, Flood said, with total revenue for NFL Properties approaching $150 million. A certain percentage of the revenue is taken off the top for NFL Charities and the remainder goes to the clubs to cover their assessment fees - the dues money that each club pays to belong to the National Football League.

Flood declined to say how much each club actually receives, but he said more than $10 million has gone into NFL Charities since NFL Properties was formed in 1963.

The NFL has the advantage over other sports in the selling of apparel because the football season coincides with the start of school, and back-to-school buying, and also ranges over Christmas and other holidays, Flood said.

That's a point also noted by Foot Locker's Mattina and by Dan McElwain, marketing-programs manager for the J.C. Penney department-store chain.

"We sell NFL products from slippers to hats, to apparel to outerwear. Football fans are fans from January to January. We sell out of season as well," Mattina said.

"One particular team," McElwain said, "the Raiders, sell extremely well from coast to coast."

Mattina added, "People really want to identify with a winner. The Raiders and their `commitment to excellence' (motto) sells, and their colors - black and gray - are popular right now."

According to league statistics, the Raiders are easily the most popular team for logos and colors, pulling in 20.1 percent of the market. The Chicago Bears, who were first in preference in 1989, have slipped to fourth place, behind the Giants. The 49ers are in second place for licensed merchandise with 16.8 percent of the market.