Professional sports in the United States is big business. The four major professional sports leagues bring in an estimated $23 billion per year in revenue, according to Plunkett Research. U.S. government figures estimate that $40 billion per year is sold in sporting goods equipment each year. It is difficult to know the exact size of the complete U.S. sports market due to its complexity, but it is estimated to be more than $400 billion per year. Breaking into that market with officially licensed product is difficult, due to strict requirements for licensees.

NFL Licensing

Meet the minimum qualifications for licensing as established by the National Football League. A company seeking licensing must have been in business for at least three years, and must be a manufacturer and not a distributor or middleman. The company must have the financial resources to pay all of the minimum royalty guarantees for the first year upfront at the time of licensing.

Obtain an insurance policy covering business liability that meets NFL required minimums. The policy must be through a company that has at least an A-VIII rating with AM Best. The face value on the comprehensive commercial general liability policy must be at least $3 million per occurrence, with $6 million in total liability.

Complete the pre-qualification form. This form includes detailed information about your business and its corporate officers, as well as information about your company's experience. It also includes two years of audited financial statements and income tax returns, and a credit reference from your financial institution.

Provide a complete copy of your business plan, including the types of product that you intend to license for sale with the NFL, but do not provide specific confidential or proprietary information such as concepts or drawings. If you provide these items unsolicited, you could forfeit all rights to the future use of these ideas.

Email all of the completed pre-qualification information to [email protected]. They will notify you when the information has been received. The NFL will consider your request, and if you meet the guidelines, will notify you within 90 days of how to proceed. If you do not hear within 90 days, you have not met the criteria.

NCAA Licensing

Complete the Collegiate Licensing Corporation application on its website (see Resources). This is a simple form asking for personal information and a brief description of your company and the type of product that you wish to produce. If this meets CLC's approval, it will request more information from you.

Submit your proposed designs in sample form or with drawings for CLC approval. The drawings or samples should have the marks for the institution on the products you you wish to produce and sell. You will need to complete product information sheets, and possibly complete an Authorized Manufacturer's Agreement.

Sign and execute the CLC Standard Product Licensing Agreement and the CLC Special Agreement regarding Labor Codes of Conduct. You will need to disclose the factory locations where you will be producing the product at this time, and pay all of the advance fees and licensing fees required by the CLC as well.

Tip

If you have an idea for a licensed product, you may need to partner with a company that can meet the strict requirements for licensing, or a company that is already licensed to produce and sell product. This may cut your risk and expense significantly.