LICENSE TO SELL;WAYWARD SPORT LEAGUES REDISCOVER THEIR YOUTH;WIDE ARRAY OF PROGRAMS SEEK TO ATTRACT LOYALTY TO LEAGUES AT AN EARLY AGE

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Call this "the year of the kid" in sports licensing.

The big four sports leagues-Major League Baseball, National Basketball Association, National Football League and National Hockey League-have their licensing sights set on kids and teens this year, as each league makes developing their future fan base a top priority for '96.

The efforts are aimed at pumping up flagging growth in sports licensing overall. According to The Licensing Letter, 1995 sales of licensed sports products were $1 3.39 billion, down 3% from '94. But sales have been sluggish since the fashion craze surrounding apparel, licensing's biggest segment, ended in the late '80s and consumers sought the next brand-of-the-moment.

The leagues responded by authorizing a spate of team uniform and logo redesigns. The NBA and MLB are getting mileage out of special third uniforms that some teams wear on special occasions such as national TV appearances.

REFITTING THE BEDROOM

But other categories have emerged in recent years, with sales driven mostly by children. Bedroom furnishings and infant and toddler apparel are growth categories. Untraditional apparel categories have started to emerge; MLB just sold a license to Her Majesty, New York, to market boys' and girls' swimwear.

Technology also is hot. Given the demand and the yearly advancement in platforms, leagues are licensing more and more videogames and CD-ROMs each year.

"We're proving that we're not tied to any product category. When one segment is down, another is up or a new one is emerging," says Rick Welts, president of NBA Properties. "We're in the content business, and kids love sports. The new areas where kids are spending their recreational time are areas where our content can follow."

That philosophy represents a departure from how sports approached licensing options in the past. In recent years, the leagues have focused much of their efforts on their core fans with broad, integrated marketing programs. One of the NFL's most successful programs, for example, has been its Throwbacks line of vintage team apparel, which racked up sales of more than $40 million since '94.

AMUSEMENT BATTLE

But now, more than ever, consumers see pro sports as just another entertainment option. That means there's more competition for their dollars, leading the four leagues to build their link to consumers at an even earlier age.

The NHL was the first in the recent rush to act. In 1994, the league, its teams and key marketing partner Nike began jointly establishing grass-roots programs supporting off-ice hockey, a '90s sports phenomenon fueled by the same kids that have made NHL jerseys one of the hottest fashion items in sports licensing.

Developed by NHL Enterprises, the program includes localized promotions such as "BreakOut," a rink event that includes interactive games and licensed merchandise sales.

NHL's bigger sports siblings, especially the NFL, are launching programs of their own to build the sport first, and licensed products sales later.

"Our major initiative this year will be to get as many kids as possible to participate in our game, whether it's playing or watching on TV or going to games or buying our products," says Jim Connelly, VP-worldwide retail licensing for NFL Properties.

The NFL's "Play Football" program includes more than $5 million in national advertising aimed at kids, beginning with TV spots run in NBC's pre-and post-Super Bowl XXX programs Jan. 28. The effort also includes NFL-related TV shows aimed at kids and participatory programs.

The NFL is working with a TV partner it won't disclose and several kids magazines, including Sports Illustrated for Kids and Boys' Life, on a "Play Football" consumer promotion for an in-house developed summer and fall program that will also push kids products.

RETAILERS AS A SOURCE

Mr. Connelly sees licensing as a natural and integral aspect of this effort. NFL Properties wants its retailers to become "Play Football" headquarters, a place where kids can come and sign up for programs. The in-store hub for that activity: a proposed NFL-branded section for kids called "GameDay," which NFL Properties is developing with mass-merchants and sports retailers.

NFL Properties also is working with its sporting goods licensees to address a logistical roadblock in the way of getting kids to play the game: "You can practice hoops in your driveway, practice your slapshot against a goal. We want to invent the football-equivalent to the ball and the hoop," says Mr. Connelly.

The NBA has always been popular with the younger demographic, and indeed, sponsors and licensees often use the league to reach them. But the kids and teens who grew up with NBA during the glory days of Magic Johnson and Larry Bird have grown into Generation Xers.

HANDS-ON EFFORT

So instead of leaving it up to the inherently youthful appeal of the product to sell itself-and to the Nikes and Reeboks to market basketball to kids aggressively-the NBA plans to develop its fan base more directly. Mr. Welts says the NBA will begin testing this month a grass-roots program developed in-house and owned and marketed by the league. The program, although similar to the NBA-endorsed "Hoop-It-Up" tournament program run by StreetBall Partners, will be separate and distinct.

The NBA won't tip its hand as to how, but says it will market aggressively to a rather underdeveloped segment in sports licensing: girls.

The NBA also has big plans for the women's USA Basketball team, now that it handles its marketing and licensing. Many companies will put significant marketing muscle behind the team during this Summer Olympic year, including Sara Lee Corp.'s Champion unit, both a sponsor and a licensee.

FOCUS ON GIRLS' PLAY

"We have an advantage of being an equal opportunity sport," says Mr. Welts. "With this Olympic year and continuing on for years to come, we're going to actively encourage girls to play the sport and merchandise their fan loyalties."

The NBA, NFL and NHL are marketing to kids from a position of strength. Underdog MLB, on the other hand, is boosting its youth marketing as part of its '96 brand rebuilding effort. Labor unrest wiped out much of the '94 season, and when baseball returned last year, many fans still held a grudge.

"We recognize we need to be more fan friendly. To develop our future fan base, we are developing kids' affinity programs," says CarolAnn Dunn, licensing director at Major League Baseball Properties. Ms. Dunn says it's still too early to disclose specific plans. But she says significant funds have been budgeted for kids in '96, most of it supporting apparel.

Look for MLB Properties to create aggressive consumer promotions.

"We know if we can market the game to kids, capture their attention at a young age," says Ms. Dunn, "we'll have fans for life."

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