Building a Brand
The Business of Husker Athletics is a monthly series presented by First National Bank where we’ll examine some of the numbers behind the business of big-time college athletics. This month we take a look at the history of the Huskers’ brand and how it became one of the best-selling collegiate brands in America.
Picture this. It’s 1980 and you, a young entrepreneur, want to capitalize on the popularity of the Cornhuskers in football-mad Nebraska. You want in the Husker merchandise game.
This wasn’t that hard to do.
What you would’ve done in 1980 is sought out Don “Fox” Bryant, Nebraska’s Sports Information Director who was also handling licensing at the time, and paid him a flat fee of $25. That bought you the right, on a yearly basis, to print up as much Nebraska merchandise as you wanted.
This was not exactly the wave of the future. Doing things the old way typically netted Nebraska around $20,000 in royalties in the early 1980s. The future, however, was right around the corner
Nebraska was one of 60 schools to sign a licensing deal with International Collegiate Enterprises in 1984. The company guaranteed the university a minimum payout of $35,000 that first year. By year two, fiscal year 1985-86, Nebraska netted $80,022 according to published reports. The big business of collegiate branding had officially begun.
The chart below tracks the rise in merchandising revenue at Nebraska from 1985 through 2001 – the heyday of the Tom Osborne years – as reported by the university and the Collegiate Licensing Company, the university’s current licensing partner. The chart also shows the inflation-adjusted amount for each year. Keep in mind that the fiscal year at the University of Nebraska runs from July 1 to June 30 of the following year, so, if you want to measure the impact football had on licensing revenue – and I suspect most will – fiscal year 1987-88 would’ve been impacted by the 1987 football season and so on.
That nearly vertical line you see on the chart? That’s a national championship. After winning its first national title since 1971, Nebraska’s licensing revenue went from $462,368 in 1993-94 to $2.18 million in 1994-95, a 371 percent increase. And consider this: the bulk of that $1.7 million bump had to have come between Jan. 2, the day after the 1995 Orange Bowl, and the close of the fiscal year on June 30.
That’s a lot of national championship hats, shirts, mugs, and pennants.
The Huskers’ 1994 national championship changed things for Nebraska. The 1995 national title brought another increase in revenue. Starter, a red-hot apparel company in the early 1990s thanks to its parkas and jackets, reported selling just 10,000 Husker coats prior to 1994. In 1995 alone, Nebraska fans snapped up 250,000 Starter jackets according to a 1996 story from the Omaha World Herald. The Nebraska brand, which hadn’t even been trademarked until the early 1970s, was no longer strictly a regional seller.
The CLC, which currently represents nearly 200 colleges and universities, releases an annual ranking for its member schools based on merchandising revenue. From 1989 to 1993, Nebraska always ranked in the CLC’s top 25. In 1994 it was 14th nationally. After the first national title, the Huskers climbed all the way to fifth alongside traditional top-sellers like Michigan, Florida State, North Carolina and Georgetown. After back-to-back national titles, Nebraska was second nationally and the university remained in the top 10 all the way through the end of the decade.
Nothing makes the registers ring quite like winning, and there’s a good reason for that. Not only are people buying more, the university is also earning a higher percentage on that merchandise.
School’s typical licensing deals with the CLC offered a royalty between 6 and 8 percent of the wholesale price on merchandise, but commemorative championship merchandise is more valuable to the universities. For Nebraska it had a royalty rate closer to 12 percent.
Thus, when a school wins a national title, its licensing revenue tends to go through the roof. When Tennessee won a football national title in 1998, it jumped to the top of the CLC rankings and hung around in the top five for a few years. After Texas won its national title in 2005, it too took over the top spot and has held it for the past eight years.
Since Nebraska’s last national championship game appearance in 2002, the Huskers licensing revenue has held steady at around $2 million per year. Nebraska has ranked 13th in the CLC rankings each of the past three years, which is slightly better than the pre-championship years and slightly worse than the heights of the mid-1990s.
But it’s still pretty remarkable when you consider the population of the state of Nebraska compared to some of the other top teams like Michigan, Texas, North Carolina and Florida.
The pool of potential Husker fans is simply smaller, but you wouldn’t know it by looking at merchandise sales.