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Infographic: Power of Product— Branded Merchandise in Professional Sports

A sports franchise is more than a group of players putting a ball through a hoop or kicking one into a net. A professional sports team is an institution, defined by its history and its cultural impact on the world. It’s more than the sum of its parts. The power of a popular team name and logo is nearly limitless. Some of the most well-known teams, such as the Dallas Cowboys, are famous all across the world. Even people who aren’t familiar with American football know the Dallas Cowboys.

How do these teams reach such wide and varied audiences? One way is through the power of merchandise and branded products. In HALO’s new infographic, see what makes merchandise so important and how it is an essential aspect of professional sports – with a focus on football for the fall season!

Branded Merchandise in Professional Sports

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Power of Product: Branded Merchandise in Professional Sports

What makes a team valuable? Is it the number of championships they’ve won or the size of their stadium? These things help, but much of a team’s value comes through the popularity of their brand and image. For a professional sports team, a good brand is critical because people are more likely to wear and use the team’s merchandise if they love the team’s brand and what it represents. Promotional merchandise accounts for billions of dollars of revenue for professional sports every year, and the most popular team names and logos can be seen on thousands of licensed products.

The Business Value of Branded Team Merchandise

Why does branding a wide range of products benefit a professional sports team?

  • Reach untapped audiences: Branded products raise awareness for teams and give them the potential to reach fans outside of traditional forms of advertising.
  • Engenders brand loyalty: A mass of people filling up a stadium, wearing the same branded clothing, in support of the same cause increases loyalty to a team.
  • Free advertising and new revenue stream: Teams make a profit from merchandise because they earn licensing royalties based on the selling price of the item.
  • Low cost per impression: Turning a fan’s clothing, home, and car into a billboard for a team delivers a better cost per impression than any other media. The average for a promotional product is $.005. Examples:
    • Shirts: 365 average monthly impressions
    • Hats: 476 average monthly impressions
    • Glassware/ceramics: 251 average monthly impressions

Fans Love Merchandise

2014 retail sales of licensed professional sports products equaled $12.8 billion.

  • Increased every year for four consecutive years.
  • Royalty revenue for professional sports leagues was $698 million.
  • 67.43 million U.S. residents consider themselves “avid followers” of the NFL.
  • 31.21 million U.S. residents purchased clothing with an NFL team logo in the past 12 months.

The NFL still hasn’t hit its full potential of buyers, and has room to grow its sale of merchandise.

Fun Fact: Scandal can increase sales. Tom Brady shot to #1 in player merchandise sales in 2015, despite being embroiled in “Deflategate”.

Most Valuable Teams in the World According to Forbes

Which team brands are the most valuable? These teams are more than sports franchises; they are lifestyle brands that bring together sports, fashion and other aspects of life.

  • Soccer
    • Real Madrid: $3.26 Billion
    • Barcelona: $3.16 Billion
    • Manchester United: $3.1 Billion
  • Football
    • Dallas Cowboys: $3.2 Billion
    • New England Patriots: $2.6 Billion
    • Washington Redskins: $2.4 Billion
  • Baseball
    • New York Yankees: $3.2 Billion
    • Los Angeles Dodgers: $2.4 billion
  • Basketball
    • Los Angeles Lakers: $2.6 Billion
    • New York Knicks: $2.5 Billion

Fun Fact: The New York Knicks were last place in their division during the 2014-15 NBA season. Yet no other team from their division is on the Forbes list of Most Valuable Sports Teams. Value is not directly determined by performance, but by the strength of a team’s brand!

No Product is Off Limits

Professional sports teams license thousands of products. Popular branded items include: