Licensing Trust a ground-breaking move for NASCAR

NASCAR's answer to its badly bleeding merchandise industry was unveiled last week in the form of the NASCAR Teams Licensing Trust, a centralized licensing agency that will mark a seismic change in the way the industry has operated.

The Trust, which will be run by a 14-person board of directors mostly made up of team executives, will provide the kind of one-stop shopping for licensees and retailers that's never before been available in the sport.

Teams in NASCAR have handled their licensing independently in the past. Doing business in NASCAR will be easier for licensees and retailers, the teams reason, because they won't have to hop from one team to another to aggregate licensing rights. Teams hope that more best-in-class licensees will find value in NASCAR, whose fragmented system has been inefficient and cumbersome to navigate. And it eventually faltered under the weight of the recession.

At its peak, all NASCAR licensed sales topped $2 billion a year, and revenue grew through the early to mid-2000s. But the past few years have seen revenue drop by 25 percent, to roughly $1.5 billion, and those in the sport finally declared the system broken last year when they first began meeting to create the Trust.

Paul Brooks, NASCAR's senior vice president, brought the teams together in September for the first of what were 30 meetings in 10 months to sort out the complexities.

NASCAR teams are independent contractors so they're not used to working together, but the merchandise industry was in such a slump that they couldn't afford to continue operating independently.

"The business was headed in the wrong direction," said Brooks, who was lauded by the teams for initiating the concept and triggering the discussions. "We knew we needed to do something different. The process of the teams pooling their rights and working together, well, it's never happened before in this sport."

Throughout the meetings, a mantra emerged: "One voice. One vision." It set the tone for the kind of unprecedented collaboration among the teams that was necessary to make the Trust happen.

Eleven teams, from stalwarts Hendrick Motorsports and Richard Childress Racing to smaller operations such as Michael Waltrip Racing, elected to pool their licensing rights into the Trust. NASCAR's licensing rights are in there as well. Other teams and individual drivers can opt in at any time. Executives from those teams and NASCAR make up the 14-person board, which will run the Trust.

Rather than hiring a staff to operate and manage the Trust, which was first proposed, officials decided to use the staff in NASCAR's Charlotte-based licensing office. They'll serve as a point of first contact for licensees and retailers and handle administrative duties, such as applications and other paperwork. All decisions, though, will be made by the board, while teams will still have final approval on products and designs. (Continued)