UI trademark revenue increases, goes to athletics

BY ARIANA WITT | APRIL 18, 2011 7:20 AM

SocialTwist Tell-a-Friend

The black-and-gold beaked face of the Hawkeyes isn't just about pride — the Tigerhawk also means cash for the University of Iowa.

Revenue from the UI's trademark-licensing program — money it makes from the sale of Hawkeye merchandise ranging from apparel to food — continues to increase each fiscal year. And the distribution of the millions of dollars in royalties benefits just one UI area: sports.

In fiscal 2010, licensing of the university's trademark brought in nearly $2.4 million from roughly 550 licensees, up from $2 million in 2009 and $1.8 million in 2008, according to information obtained by The Daily Iowan through an open-records request. And that money landed in the pockets of the self-sustaining UI Athletics Department, just as it has for the past three decades.

Some have argued that, because of financial woes in higher education, at least a portion of trademark revenue should be funneled in to the general-education budget — a practice some peer universities follow. But others contend money going toward athletics benefits the entire university, especially through athlete scholarships.

And while the decision is not up to up to Iowa legislators or the state Board of Regents, many agreed the topic is worth discussing.

"I've always been one to separate the self-sustaining athletics from other departments, and I have no problem with athletics retaining the athletics portion of trademark," said Rep. Jeff Kaufmann, R-Wilton. "But I don't think it would hurt for the Board of Regents to review this and see how many dollars are involved and if there is room for change."

Trademark at the UI

Officials at the UI don't earmark the royalty money for specific expenses; rather, it is combined with the entire projected $70 million in athletics revenue for fiscal 2011.

In 2010, scholarship expenses for athletics were roughly $7.9 million while travel costs were roughly $7.7 million. Medical expenses totaled about $661,000, said Rick Klatt, the associate director of athletics for external affairs.

"We simply pay the bills," Klatt said.

The Athletics Department created the licensing operation for the university in 1980s, Klatt said, which aids the department in its self-funding operations. Rep. Dave Jacoby, D-Coralville, said legislators agreed the royalties from trademarks would go to the department to help its sustainability.

"This is another source of revenue that is part of our self-support as we have to generate the money for us to have to spend," Senior Associate Athletics Director Jane Meyer said.

But Jacoby said he believes there's room for change.

"Moving the money around is for the [state] Board of Regents to decide," he said. "I think it would be nice to see some of that money go toward general education."

But Regent Robert Downer argued the current trademark arrangement at the UI benefits the entire university through athletics scholarships.

"I think there is a lack of understanding when it comes to athletics," he said. "There is a considerably greater financial contribution that athletics makes to the institution than most people realize because [athletes'] tuition and fee dollars go to general education, and it's not just a benefit for the athletes."

Klatt said if UI officials wanted to move around funds in the university, they would likely only need UI President Sally Mason's approval.

UI spokesperson Tom Moore said he is unaware of any discussions to move around trademark revenue.

Other universities

Not all Big Ten universities return royalties exclusively to athletics.

At Ohio State University, the $7.7 million from licensing in 2010 helped students campuswide through scholarships and funding for university libraries and student affairs, said Rick Van Brimmer, the director of trademark and licensing services for the Buckeyes.

"I think the philosophy here has always been that we're all in this together," he said. "While there is a fair amount of recognition that athletics is visible and certainly helps in the sale of merchandise and helps us build that part of the brand, the money that is generated in the university's name should go back to benefit as many students as possible on a day-to-day basis."

Ohio State athletics is self-supporting like Iowa's.

And of the $4 million brought in from trademark licensing at the University of Michigan in 2010, roughly $120,000 went into the university's general-education fund, said University of Michigan licensing director Kristen Ablauf. At Purdue University, royalties from licensing benefit sports only if the teams play in high-profile bowl games or championship tournaments, said David Wilson, the director of trademark licensing at Purdue. Otherwise, much of the money — $1.35 million in 2010 — goes to academic use.

Michael Stephens, the assistant athletics director for marketing, licensing, and concessions at the University of Nebraska-Lincoln, said that much like Iowa, 100 percent of its trademark profits go to athletics. Nebraska received around $2 million in royalties last year.

One of the main reasons the UI gives trademark revenue to athletics is because it's self-sustaining, said Dale Arens, the director of the UI's Trademark Licensing Program.

"The UI is one of few self-supporting departments in the country," Arens said. "It would be really hard to draw conclusions on what is the best model for institutions to use."

Iowa State University also gives 100 percent of trademark royalty to its athletics department, but unlike the UI, athletics officials then allocate a maximum of $100,000 to the Office of the Provost to use for general education, said ISU trademark officer Leesha Zimmerman.

The six-year-old arrangement — arranged by the President's Office — is not expected to change once ISU's athletics department becomes self-sustaining in July at the regents' request.
In 2010, ISU's trademark licensing brought in a little more than $750,000.

'More people want to buy Iowa gear'

Overall licensing in the Big Ten is increasing, said John Greeley, the vice president of university services for the Collegiate Licensing Co. in Atlanta. He said college licensing is an estimated $4.3 billion industry.

In 2010, the Hawkeyes earned approximately $115,000 from the company. Collegiate Licensing is not a licensee of Iowa, but it may use the Hawkeye logo as part of representing the entire Big Ten.

"The reason we see an increase in royalties is because of the success of the Athletics Department," Meyer said. "More and more people want to buy Iowa gear, and we think that's a positive."

Contributions from Hawkeye licensees in 2010 ranged from 1 cent from Alpha Sports Inc. to more than $167,000 in royalties from Nike Team Sports Inc. Nike acts as the "sideline apparel provider" for Hawkeye football and basketball, Meyer said.

Chris Marriott, store manager of Universitees in the Old Capital Town Center, a chain store for Taylor Imprinted Sportswear, which contributed $78,303 to the UI, said he is unaware of how the university uses royalties from the apparel company.

"It would be nice to know more about where the money goes," Marriott said. "But, in being in business, I know it's really none of my business to know where that money goes."

> Share your thoughts! Click here to write a Letter to the Editor.

comments powered by Disqus

Privacy Policy (8/15/07) | Terms of Use (4/28/08) | Content Submission Agreement (8/23/07) | Copyright Compliance Policy (8/25/07) | RSS Terms of Use

Copyright © The Daily Iowan, All Rights Reserved.