Just before the start of the NCAA Tournament on Thursday, the Texas Longhorns announced a new 10-year agreement with 289c Apparel as the school's master licensee for retail needs, replacing behemoth College Licensing Co., which has been an IMG property since 2007.
289c Apparel is the new kid on the block in the college licensing game. While CLC represents over 200 colleges and controls nearly 80% of the college retail licensing market, 289c Apparel is still trying to gain a foothold in that market -- the company's website lists USC as the only college brand it represents. The Trojans inked with 289c Apparel in 2011.
The change is partly about control, according to the school's release:
This agreement allows the university, Learfield Licensing Partners and 289c to work collaboratively to better leverage our internationally recognized brand, secure more control of our brand's presentation at retail and deepen our supplier relationships.
The company's website touts "customized brand management" and can surely spend more time on the Texas account than the much larger CLC. In fact, the CLC Wikipedia page lists only 80 employees in the company, while 289c Apparel touts the employment of 350 people.
Besides control, it's also about saving money with the looming increased costs for athletic departments around the country, with the savings coming in the form of more in-house management:
The new model allows for stronger brand presentation in the retail marketplace as well as better university control of the breadth and depth of the university's licensed products. Texas plans to maintain local licensees that provide products for internal campus units. The university also can prioritize unique offerings to key retailers that have a strong presence in the state of Texas and across the U.S. that have shown a commitment to the university and the Longhorns' brand. This creates an innovative and improved presence within established retail outlets to better serve Texas' legions of fans.
The school will save costs by taking the licensing in-house and avoiding the expense of traveling to Asia to assess labor safety. A source told the Austin American-Statesman that the school could save as much as $1 million annually as a result.
By contrast, the new master licensee 289c Apparel has a modern factory in Dallas that would also expedite shipping across the state of Texas when the school has on-demand apparel that needs to hit the shelves quickly.
While this move won't impact fans in a significant way other than the touted changes of more unique offerings, there could be another looming change that would affect fans -- the school's deal with Nike as the footwear and sideline provider for Texas athletics expires in 2016.
Since the move from CLC to 289c Apparel represents a major transition away from the name brand in collegiate licensing, many see it as a warning shot to Nike.
How possible is it that the Longhorns could start the 2016 football season wearing adidas or Under Armour? It's hard to imagine given the traditionalist tendencies of the fanbase and those brand's proclivities towards ostentatious designs meant to attract attention. Simply put, Adidas and Under Armour miss the mark too often for a school like Texas.
And without marquee brands like Notre Dame (Under Armour) and Michigan (adidas), management at Nike may not be willing to suffer another major loss to a rival that is still struggling to represent a major threat to the company, but could start to gain ground with the addition of Texas.
The bottom line is that it makes too much sense for the Longhorns and Nike to continue their relationship. There's an image that Texas represents on the football field, the basketball court, and the baseball diamond that history indicates adidas and Under Armour clearly don't get in the same way that Nike does.
Athletic director Steve Patterson told the Statesman that discussions are already underway with the footwear giant and that he hopes to reach an agreement by the fall.
Don't mess this up, Patterson.