Will he play or won’t he play? As questions linger ahead of Texas A&M’s first football game of the 2013 season over whether Johnny Manziel will take the field for the Aggies, other things appear more clear. In particular, when it comes to Texas A&M, one thing is certain: The school is in the midst of a licensing renaissance, where its royalties earned from licensed products have surged in recent years. The question, though, is what is driving this increase in sales of Texas A&M’s licensed products? Is it Johhny Manziel’s performance last season as quarterback which led him to the history books as the first freshman to win the Heisman Trophy? Is it the school’s recent move to the SEC? Or, is there an unspoken factor in the mix?
In the fiscal year before Texas A&M announced that it was leaving the Big 12 Conference for the SEC, the school brought in $2,626,925 in gross royalty revenues for its licensed products. The following fiscal year, that number jumped to $3,229,811, which marked a 23 percent increase. What notable event took place during that time period that could have caused such a jump? Simply, an announcement that the school was moving to the SEC.
In terms of factors that have played a role in the increased sales of Texas A&M licensed merchandise, it is clear that the school’s move to the SEC has played the most monumental role. The nature of this role is shown in several anecdotes. Shane Hinckley, Texas A&M’s interim vice president of marketing and communications notes that last season, Texas A&M brought in $102,000 in SEC royalties. Those royalties were obtained from co-branded Texas A&M and SEC merchandise (for instance, a t-shirt bearing both Texas A&M and SEC logos). The royalty rate that Texas A&M receives for such merchandise is ten percent, which demonstrates just how much Texas A&M gear the SEC was able to sell in the Aggies’ first year as a conference member. In fact, Hinckley estimates that the royalties Texas A&M received from SEC co-branded merchandise equates to the SEC selling over $2 million worth of Texas A&M/SEC co-branded goods at retail.
While the SEC has dominated the gridiron in recent years, it also dominates the licensed merchandise game. “If you look at the biggest number of co-branded royalties we brought in as a member of the Big 12 over the prior five years, that amount was $4,500 in royalties,” Hinckley said. Thus, in its first year as an SEC member, Texas A&M was able to bring in conference royalties nearly twenty-three-times as great as what it brought in as a Big 12 member.
So, then, what factor does Manziel play in the merchandise sales growth Texas A&M has seen? The Heisman winner clearly plays a role, but some would be surprised to learn how much of one it is.
In the last fiscal year, Texas A&M’s licensed merchandise royalties were $3,939,374. This marked a 22 percent increase over the 2011-12 fiscal year. Although this number is the highest amount of royalties Texas A&M has pulled in over the last five years, the amount of growth the school saw was less this year than last year. Thus, an argument can be made that Manziel’s Heisman Trophy winning season and the football team’s unprecedented success were not as big of a role in the increased royalties as the school’s transition to the SEC was.
“If you go back to the 2011-12 fiscal year when licensing revenue was up by 23 percent and we had a record year, nobody had ever heard of Johnny Manziel. Our football team went 6-7 that year. We had announced our move to the SEC in September 2011. If you fast forward to the 2012-13 fiscal year, our rate of growth is coming down. The growth of our program is much more associated with the move to the SEC than it is necessarily with one individual or team,” Hinckley said.
Finally, there is a third–albeit less known–factor at play. That factor is a campus-wide approach to branding that the university instituted five years ago, when it hired Hinckley and the school’s former vice president of marketing and communications, Jason Cook, developed a concept of “One Brand.” That concept allowed the school to become one of the only universities in the United States that utilizes the same logo for its athletics and academic departments. “By using our licensing program to create another touch point for the Texas A&M brand, we have successfully elevated our brand onto the national stage. We coordinate everything we do on multiple levels to increases our leverage,” Hinckley said.
This leverage has led to interesting licensing endeavors for the Aggies. Notably, Mattel MAT +1.05% recently released a line of Ken dolls modeled after the Aggies’ yell leaders. Hinckley notes of the eight universities that Ken dolls were designed for, the Aggies were the only line to sell out. Other notable items include FTD roses in Texas A&M colors and a new line of perfume and cologne.
The Aggies have also seen their gear enter into more stores over the last five years. Most notable, perhaps, is the number of Walmart stores that the brand’s products can be found in. Five years ago, Texas A&M products could only be found in 32 Walmart stores across the state of Texas. Today that number is up to 90. “We have a lot of competition from professional teams and other colleges. We are seeing a lot of growth in the number of stores we are in statewide which fuels the number of touch points people have with our brand. We still have a lot of room to grow, though,” Hinckley said.
While there is still room to grow, the Aggies have achieved tremendous success in growing their national brand in the last five years. Five years ago, Collegiate Licensing Company, who Texas A&M partners with, ranked Texas A&M 24th in royalties received amongst all college programs. Most recently, Texas A&M was ranked 12th. “We had a five-year plan to break into the top-15. We have a ten-year play to break into the top-10. We think we will break into it next year and accomplish that goal early,” Hinckley noted.