They Buy Into USC Success

By Greg Johnson

Dec. 25, 2005 12 AM PT

Times Staff Writer

USC’s Trojan Bookstores figured that a game plan honed during consecutive national championship runs and bookended by Carson Palmer’s and Matt Leinart’s Heisman trophies would withstand the latest retail assault.

Wrong.

“We’d figured that we’d been through it all before,” said Mark Ewalt, bookstore director. “And then it hit us just like it did the first time. This one was so much bigger than what we thought it would be.”

The latest cardinal and gold rush began well before the season began, with boosters talking openly of another unbeaten season, another Heisman winner and another national championship.

One measure of Trojan fever: Retail shops will sell more than 10,000 of the Nike-produced USC jerseys -- including $55 replica jerseys, $70 twills and authentic jerseys that retail for $150. About half of those jerseys will carry No. 5, which is worn by Reggie Bush, this year’s Heisman winner. USC blew through its 1,156-jersey allotment within 48 hours of the bowl championship series news conference that made the long-awaited USC-Texas matchup official.

Another 1,156 jerseys will make their way into the bookstore early in January and “Nike is hot on the presses trying to make more,” said Jose Eskenazi, USC’s associate athletic director in charge of corporate sponsorships and licensing.

There’s still memorabilia to be had. A $19.95 USC cat bowl. An $8.50 bottle opener that plays the fight song. The $399.95 Leinart framed print. And, for those who can’t live without a jersey, Trojan Bookstores still has plenty of old No. 16s jersey in stock -- that’s Frank Gifford, the USC running back who became the New York Giants’ No. 1 draft pick in 1952.

Shop on!

USC doesn’t release revenue or profit figures generated by its licensed merchandise program. Nationwide, however, colleges and universities will sell about $2.8 billion in licensed merchandise this year, up from $250 million in 1985. Athletic departments and college bookstores earned royalties of about $120 million last year, according to industry estimates.

Most schools funnel the cash into athletic departments, student unions or the general fund. UCLA and most other schools turn the business end of things over to a for-profit company that specializes in licensing. But USC is one of the few large universities that continues to run its own licensing operation. “We feel that no one can sell USC like USC,” Eskenazi said.

On-campus bookstores sold an estimated $1.07 billion in licensed merchandise during 2004, according to the National Assn. of College Stores. That total has been flat over the last two years, but licensed merchandise also is flowing onto shelves in department stores, specialty outlets, warehouse-style operators and, increasingly, online.

What’s being sold and where it is sold has changed in recent years.

“You can also shop Wal-Mart, Nordstrom and everywhere in between,” said Pat Battle, chief executive of the Collegiate Licensing Co., an Atlanta-based company that handles deals for 217 colleges and universities. “And there’s a greater diversity of merchandise that you didn’t have 10 years ago.”

A decade ago, apparel generated 85% of sales. Footwear, handbags, video games, car covers, poker tables and just about anything else that won’t make the college board of directors blush now drives about 40% of licensed sales. Sports video games featuring collegiate stars and school logos have grown in popularity since their introduction 10 years ago. Next year, video game leader Electronic Arts will add a college baseball game to its existing college football and college basketball products.

College athletic departments and bookstores also are pushing digital products.

USC sells subscriptions to an online television service that beams live game action for men’s and women’s sports. This year’s package included MattReggieTV.com, an online video log that showcased Leinart and Bush. USC also signed a marketing deal with www.Stubhub.com, an online shopping center where ticket buyers and sellers can complete transactions.

The collegiate licensing industry has been reshaped during the last decade by the arrival of footwear and apparel giants, most notably Nike and Adidas. Before their arrival, such companies as Champion Sportswear and Russell Athletic concentrated on outfitting athletes and coaches. Nike and Adidas quickly began marketing varsity-quality apparel to well-heeled college fans who are hungry for official jerseys, letter jackets and other goods.

So now fans can buy a shirt just like the one USC Coach Pete Carroll wears as he paces the sidelines.

The most obvious change along the collegiate apparel aisle has been the rush of clothing designed for women. Gone is the old-school “unisex” approach that forced women to make do with a men’s XL jersey or T-shirt. They now can buy an array of products sized for everyone from grade-school girls and college students to recent graduates and grandmothers. A fashion-conscious woman could easily spend more than $300 for a silk top and designer sweat pants at USC Collections, a small, upscale shop that Trojan Bookstores operates at South Coast Plaza.

The emphasis on female fashion is evident across the sports licensing industry. The NFL’s recently expanded line of women’s merchandise drove a 300% sales increase last year, a league spokesman said. Shoppers can buy traditional merchandise -- including jerseys, hats, fleece and polo shirts -- as well as swimwear, camisole tank tops and thongs, all bearing the logos of NFL franchises.

Pastels, including pink-hued replica jerseys, are popular. There’s also a designer handbag shaped like a football helmet, decorated with crystals, that retails for $2,699.99.

Co-branding also is on the rise. USC’s collegiate “brand” gets equal billing on merchandise produced by Hush Puppies, Tommy Bahama, Reyn Spooner, Ralph Lauren and Cutter & Buck. The NFL’s licensing partners include Reebok, G-III, VF and 5th & Ocean. “When you can co-brand with the big brands out there, particularly the upscale ones, it can carry a lot of currency,” Ewalt said.

Upscale vintage-wear -- including T-shirts, jackets and jerseys that echo the past -- also is hot. Chip & Pepper, a Los Angeles-based company that produced upscale denim apparel, is selling USC and University of Texas clothing with vintage-style mascots and logos at such high-end retailers as Nordstrom.

Children and infants aren’t forgotten, either.

Judy Brewer, an Irvine resident who graduated from USC during the mid-1960s, sorted through the shelves before picking two plush toys for her grandchildren -- a horse that plays the USC fight song and a cheerleader doll. Brewer also grabbed a USC ornament for herself and a jacket with a Rose Bowl emblem for her husband, Burleigh, to wear to the national title game Jan. 4.

One measure of licensed merchandise’s success is the torrent of unlicensed goods that flows into the market during the NCAA’s Final Four basketball tournament in March and the glut of post-solstice bowl games.

An unintended result of the BCS games being stretched over several days is that purveyors of unlicensed merchandise rush from city to city to hawk their wares.

Battle’s firm, which handles licensing for the BCS, expects a busy couple of weeks, particularly in the Southwest.

“We usually seize thousands of pieces of illegal merchandise, but I’d anticipate something in the range of 10,000 to 25,000 this year,” Battle said.

(BEGIN TEXT OF INFOBOX)

They’re in the money

Licensed sports merchandise has become big business. Here’s a breakdown on last year’s profits:

TOP SPORTS BRANDS

1. Major League Baseball...$3.5 billion

2. National Football League...$3.4 billion

3. National Baskeball Assn....$3.0 billion

4. Collegiate Licensing Co....$2.8 billion

5. NASCAR...$2.1 billion

6. National Hockey League...$1.5 billion