The ongoing era of change in the sports licensing business era of change in the sports licensing business was apparent more in the aisle conversations and business discussions than in the products themselves at last week’s Sports Licensing and Tailgate Show in Las Vegas.

It started with a breakfast keynote at which Nascar’s Blake Davidson highlighted that organization’s transition from a cadre of three recently-retired popular drivers who generated more than 60% of merchandise sales to a group of six young, multicultural rising stars who now generate about a quarter of the overall business. It continued onto a show floor in which e-Commerce and venue retail powerhouse Fanatics had a central booth highlighting its role as an apparel supplier, and in which suppliers of all sorts were considering their best route to consumers amidst retail consolidation.

The business is “evolving at a rate faster than the current/former experts can keep up with, which is [what] Silicon Valley type companies like Fanatics and Amazon have capitalized on,” wrote one manufacturer in responding to a LIMA survey just before the show. “It’s up to the younger generation to find ways to adapt, evolve to challenge these bigger companies.[You] have to keep your product engaged with the end user, not hide behind retailers to sell your product for you to the consumers. Fan/customer engagement needs to be in your marketing plan.

But even as the business transitions, LIMA’s survey found that 30% of respondents expect their sports licensed business to grow at least seven percent in 2018

That sense of optimism comes at the end of a year that saw the ongoing growth of Fanatics into an increasingly vertically integrated sports licensing behemoth – this year it added the Majestic brand as well as entering the agency field when it acquired the Fermata College business.

The college agency business is also on the verge of major change, with the pending merger of IMG College and Learfield Partners – bringing together the two largest collegiate agencies.

Even as companies in the traditional sports licensing arena concentrate on managing the business as it exists today, many also are trying to figure out whether they can leverage an opportunity in a less traditional arena. Everyone in the sports licensing food chain is trying to figure out the eSports – the fast-growing business that’s attracting investment from many in the traditional sports market (i.e. New England Patriots owner Robert Kraft, New York Mets owner Jeff Wilpon have bought Overwatch League franchises) as well as institutional involvement from such leagues as the NBA (via the NBA 2K League that launches this year with gamer teams ties to 17 NBA franchises), Major League Soccer and NASCAR, though its longtime affiliation with iRacing.

Meanwhile, the traditional collegiate sports infrastructure is trying to figure out how to adapt to eSports, as more than 300 schools reportedly have clubs of various structures (and funding levels) competing in Riot Games’ “League of Legends,” The Big Ten network recently extended through 2019 its agreement to televise a tournament among schools in that conference.

Overall, wrote one brand executive, “The next five years will see more changes in the sports licensing business than in the previous 30. Licensors/IP owners will need to navigate these changes to remain in control of their brand and brand value, rather than relinquishing it to their licensees.”

The reference is to the large number of exclusive (or Exclusive Plus One) licensing agreements that puts the bulk of major universities’ apparel business under the control of a major athletic apparel supplier such as Nike, Adidas or Under Armour.

One retailer complained that the exclusives limit retailers’ ability to differentiate: “The trend toward vendor exclusives is terrible because [they] remove competition, remove the incentive for innovation and price competitiveness, and hinder a retailer from being able to distinguish themselves from others in their market. Nobody ever challenges the notion that competition is ultimately good for the consumer, yet in the licensed products world, the licensors seem to have either forgotten that or just decided that they don’t care.”