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15-03-2012 19:39:00

College-Licensed Apparel Tops Sports Market

--College sports pushes college merchandise ahead of NFL, baseball in sales

--More television exposure seen creating demand

--Nascar merchandise in fourth place but growing rapidly

By Sam Mamudi

One-fourth of all goods sold through licensed sports apparel stores in 2012 will be college-branded, a timely reminder as March Madness gets going of the immense national appeal of college sports.

Sales of licensed college sports clothing at outlets such as Dick's Sporting Goods Inc. (DKS) and Foot Locker (FL) are set to top the market this year, beating out the professional leagues.

The National Football League, the highest-earning sports league in the world, is expected to rank second this year, with a 22.6% share, with Major League Baseball third, taking 22.9% of overall sales.

Total revenue from retail stores such as Dick's, Foot Locker and the Sports Authority will total $3.7 billion in 2012, according to a study by IBISWorld.

The study projects that revenue to grow to $4.1 billion by 2017, with college sports and Nascar seeing the most growth.

The primacy of college-branded wares is a relatively new phenomenon, according to IBISWorld. Until recently MLB-licensed goods were the biggest sellers at licensed sports apparel stores. But a combination of more television exposure and an increasingly professional approach to merchandising has seen college products rise from third in 2009, behind MLB and NFL, to number one in 2010 and last year--and likely in the years ahead.

"Increased national exposure of college men's football and basketball (through TV networks like ESPN) has catapulted collegiate athletics onto the national stage over the last decade," wrote Brian Bueno, lead industry analyst at IBISWorld, in his report. "More exposure has encouraged colleges to increase apparel offerings to more niche items, such as socks, robes and underwear, along with jerseys, T-shirts and outerwear."

Bueno said that the top-selling colleges last year were the University of Texas, University of Alabama and University of Florida.

College sports have benefited enormously from the boom in televised games in recent years. With live events among the few remaining appointment-viewing programs, TV networks have been paying billions of dollars for sports rights.

So strong is the pull of college sports that Walt Disney Co.'s (DIS) ESPN and Texas launched a university-specific Longhorn Network last August; the Big Ten Conference has its own TV station, and the Pac 12 Conference is due to launch its a national network and six regional channels in August. The impact of TV dollars is so large that college sports is in a major upheaval that could result in four 16-team super-conferences established just to meet broadcasters' wishes.

It's not just more airtime that's helping colleges. Many of the top schools have in recent years signed up with IMG College, a division of IMG Worldwide, to handle their licensing and sponsorship.

For example, though not captured in the IBISWorld study, IMG recently sealed a deal to sell college merchandise through Old Navy (GPS) stores.

"IMGs ongoing management of college licensing has definitely helped facilitate the growth, particularly as the company can leverage its marketing and licensing expertise to expand licensing strategies for colleges and, thus, expand the product base," Bueno told MarketWatch.

"It can also be argued that the increased exposure has been due to marketing efforts either undertaken by the colleges themselves, marketing agencies like IMG or other business forces."

Bueno also found that at the same time college products were claiming top spot, the NFL overtook MLB in retail sales at licensed sports stores, perhaps unsurprising given the country's enormous appetite for football. As with college sports, Bueno suggested increased media coverage has boosted sales.

"The successful launch and subsequent development of the NFL network in 2003 has played a huge role in generating apparel revenue," he noted.

Sales of Nascar apparel ranked fourth in the study, though he sees the sport as the perhaps the fastest-grower in the sector in the years ahead.

"[The sport's] products are typically sold in the Southeast region, as Nascar is most popular in those states," wrote Bueno. "In the five years to 2017 this segment is expected to generate a higher percentage of industry revenue, as NASCAR further develops its brand across the country."

-By Sam Mamudi; 415-439-6400; AskNewswires@dowjones.com

(END) Dow Jones Newswires

March 15, 2012 15:39 ET (19:39 GMT)

Copyright (c) 2012 Dow Jones & Company, Inc.

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