Agreement grows important revenue stream for student scholarships, enhances social responsibility
The Ohio State University today announced that J. America and Fanatics, Inc. have been named the university’s licensed apparel and retail partners. This is a result of a rigorous selection process requiring demonstrated commitment to both Ohio-based business and socially responsible business practices. The 10-year agreement guarantees $97 million over the term to help fund scholarships and support student organizations including an upfront payment of $23 million.
“This new partnership enables the university to protect and enhance the royalty revenues that support student success, continue its commitment to growing business in Ohio, and demonstrate leadership in socially responsible business practices,” said Jeff Kaplan, senior vice president and executive officer to the president. “This agreement, which was awarded through a competitive selection process, meets all our criteria with two companies that we believe are leaders in their respective fields and have a clear understanding of our uncompromising code of conduct and a demonstrated commitment to Ohio.”
The university sought a new business model for apparel, which accounts for nearly two-thirds of its $9 million trademark and licensing annual revenue, as a way to enhance funding for scholarships, student programing and other university initiatives. This agreement will generate at least an additional $4.5 million annually in royalties to help Ohio State reinvest in the university. Implementation of the new licensing model will be phased in over the next year.
Providing support to students
In the past, revenue distributed annually from trademark and licensing has allowed Ohio State to fund nearly 5,000 need-based scholarships, provide partial funding for approximately 600 grant-in-aid scholarships each year to student-athletes, create a Student Life endowment to support 1,000 student organizations, and invest nearly $8 million in new library collections. This new agreement will stabilize that funding base.
In addition, the new revenue generated will be used to fund more student scholarships, support opportunities for student-athletes, and increase Office of Student Life staffing to meet growing demands in Student Advocacy, Buckeye Careers and Disability Support Services. Further, the new funds will support the Alumni Association’s new career management office as well as provide additional resources to enhance alumni involvement including mentoring students and young alumni.
Licensees to double business with Ohio companies
Both J. America and Fanatics have a strong presence in Ohio and have existing relationships with Ohio State. J. America, based in Webberville, Mich., is a current Ohio State apparel licensee. The company now will manage the apparel production and distribution with a guarantee to the university of $85 million over 10 years. Fanatics, based in Jacksonville, Fla., will retain the existing online store that it currently operates for the Department of Athletics official team shop and assume management for all athletics venue retail. Fanatics’ guarantee for retail is $12 million over 10 years. The new partnership will cover the design, production, marketing and distribution of all apparel categories including headwear, with the exception of officially licensed Ohio State apparel produced by Nike.
Through J. America and Fanatics, the university will continue to engage companies in Ohio as sub-licensees, suppliers, embroiderers, and screen printers. Their current base of business with Ohio-based companies – including packaging, freight, blank apparel, corrugation and insurance services – is expected to double as a result of this agreement.
In addition to engaging Ohio-based apparel companies, Fanatics is expanding its commitment to Ohio by creating approximately 300 full-time jobs and hundreds of additional seasonal opportunities when it opens a new distribution center in Frazeysburg, Ohio, in 2013. J. America and Fanatics also will provide educational, internship and employment opportunities on Ohio State’s campus through a new retail showroom and design center which will be staffed with up to 14 full-time employees.
Enhancing socially responsible business practices
“The new apparel model increases the university’s leverage to protect the rights of workers who are involved in the production of licensed apparel,” Kaplan said. “We will significantly decrease the number of factories we need to monitor for human rights issues from more than 800 to fewer than 20, making it easier to enforce compliance with Ohio State’s code of conduct.”
In addition, Kaplan said that the university will partner with Verité, an internationally recognized expert on global labor rights issues. Verité will assist the university in supply-chain management including factory monitoring protocols, developing performance measures that align with Ohio State’s existing code of conduct, and creating a framework for ongoing campus community involvement. Ohio State’s agreement with Verité will be that organization’s first with a university. University leaders met a number of times with students concerned about labor issues, and their input helped shape this social responsibility program.
Ohio State is a member of both the Fair Labor Association (FLA) and the Worker Rights Consortium (WRC), two university-led worker rights organizations. The Ohio State Code of Conduct for Licensees is a requirement for any manufacturer using the Ohio State name and/or logo on merchandise and is among the more stringent college or university codes.
About J. America
Since its founding 20 years ago, J. America has grown to become one of the largest custom decorated apparel companies in the United States. One of the leading sportswear companies to the collegiate, resort, corporate and high school markets, J. America is also the global apparel licensee for John Deere. The company takes corporate social responsibility seriously and is an active member of the Fair Labor Association.
About Fanatics, Inc.
Fanatics Inc., a leading online retailer of officially licensed sports merchandise, provides the ultimate shopping experience to sports fans. Comprising the broadest online assortment, Fanatics offers hundreds of thousands of officially licensed items via its Fanatics (www.fanatics.com) and FansEdge (www.fansedge.com) brands. In addition, the company powers the e-commerce sites of all major professional sports leagues (NFL, MLB, NBA, NHL, NASCAR, PGA), major media brands (ESPN, NBC Sports, CBS Sports, FOX Sports) and over 100 collegiate and professional team properties. For more information, please visit www.fanaticsinc.com.
About The Ohio State University
Founded in 1870, The Ohio State University is a world-class public research university and the leading comprehensive teaching and research institution in the state of Ohio. With more than 63,000 students (including 56,000 in Columbus), a major medical center, 14 colleges, 80 centers and 175 majors, the university offers its students tremendous breadth and depth of opportunity in the liberal arts, the sciences, and the professions.
Contact: Jim Lynch
614-247-4110
Lynch.270@osu.edu