Archive for Wednesday, January 18, 2006

KU shifts licensing to athletics

January 18, 2006


The Kansas Jayhawk and its fellow crimson-and-blue trademarks are changing teams on Mount Oread, and KU's athletics department could end up with a bigger share of the mascot's commercial value.

The university's licensing operation, which last year took in nearly $1 million in royalties, this month moved out of the academic world and into Kansas Athletics Inc.

The move away from University Relations is expected to help boost the Jayhawk's profile and generate more revenue through licensing arrangements. KU already licenses the use of the Jayhawk for use on T-shirts, jerseys, coffee mugs and countless other products and services.

By taking advantage of the athletics department's contacts and business focus, KU officials hope to bring in more money for student scholarships and programs - and pump even more money into Kansas Athletics.

"The goal is to raise as much revenue as we can, within the boundaries of taste and tradition and good business sense," said Jim Marchiony, an associate athletics director. "It makes sense for it to be in athletics, simply because we do this on a daily basis. Part of our charge is to raise money. That's not necessarily the charge of University Relations. It just makes sense to do it this way."

Paul Vander Tuig, the school's licensing director, remains in the post he has held since 1993. The only difference is that he now reports to an associate athletics director instead of a university administrator.

Cashing in

Kansas University's annual proceeds from licensing arrangements for the Jayhawk, KU logo and other proprietary images and phrases: ¢ 2005: $995,450 ¢ 2004: $965,387 ¢ 2003: $768,290 ¢ 2002: $499,345 ¢ 2001: $486,138 ¢ 2000: $488,027 ¢ 1999: $670,174 ¢ 1998: $780,321 ¢ 1997: $673,794 ¢ 1996: $590,175

Having already worked closely with athletics officials as the fortunes of KU teams soared, Vander Tuig is ready to put his experience to work as the department broadens its products and outlets for sales. The department is preparing to open its own KU store in the new Hall of Athletics at Allen Fieldhouse, and other innovative marketing opportunities also are being devised.

Undisputed success

Tying the Jayhawk's licensing to the athletics department makes a lot of sense, he said.

"Certainly at schools that have great athletics - and I consider us to be one of them - there is a correlation between licensed product sales and success on the courts and athletics venues," Vander Tuig said. "I don't think anyone can dispute that."

Athletics officials are counting on it, and they are working with university administrators to determine just how to split up licensing proceeds under the new arrangement.

The existing distribution formula splits the money on a percentage basis:

¢ Chancellor's office: 40 percent, or about $398,000 this year, to be used for student scholarships.

¢ Kansas Athletics: 35 percent, or about $348,000, to be used for athletic scholarships and other general uses.

¢ Kansas Union: 25 percent, or about $249,000, for student programs.

Now, under a plan that is awaiting approval sometime during the next several weeks, Kansas Athletics will take on more opportunity for growth, along with more financial risk.

The new plan would shed the percentages and instead set guaranteed minimums for the chancellor's office and Kansas Union, numbers that would increase by 5 percent each year, Marchiony said. The chancellor's office would start by getting about $400,000 this coming year, then see that base increase each year.

More reward, risk

Kansas Athletics would not be subject to percentages.

During down years the department would lose out relative to the other recipients, but in years where licensing takes off - a Final Four appearance is worth about $250,000 in licensing revenues, Vander Tuig says - the department would reap a relative windfall.

Paul Carttar, KU's executive vice chancellor for external affairs, said that giving Kansas Athletics the opportunity to make more money made sense for everyone, but emphasized that any "extraordinary" windfall would trigger an adjustment so that additional money would be sent to the chancellor's office and the Kansas Union.

Carttar and the university's general counsel would continue to set policies and handle the legal details for use of the Jayhawk and other properties.

"Overall accountability for the use of our marks continues to rest, appropriately, with the university, and the athletics department will be working on behalf of the university to help us realize the full value of this extraordinarily lucrative property of ours - this little bird," Carttar said. "There's plenty of upside, and we're confident this will work out to everyone's benefit - including, first and foremost, the students, who are the primary beneficiaries of this."


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