Lessons in Licensing from a Five-Legged Horse – Part One

 

HOW MANY LEGS DOES THIS HORSE HAVE?

When the Kentucky Derby kicks off the Triple Crown series the first weekend in May every year, I cannot help thinking about my earlier sports marketing career.

The company I co-founded with my partner signed the first ever licensing contracts with Churchill Downs, the Maryland Jockey Club, and NYRA to merchandise all three races in the Triple Crown. Hard as it may be to believe in today’s brand conscious world, prior to 1987 these tracks never had licensing programs in place.

For well over 100 years people and companies were allowed to do pretty much anything they wanted without restrictions. That meant these rights holders had no control over how their brand and image were presented and sold to the general public. It also meant they weren’t being compensated with royalty and licensing fees they were rightfully due.

But I digress; back to the five-legged horse.

BACKGROUND

When it was first announced that merchandise manufactured for Kentucky Derby was now going to be licensed through our company, that royalty fees and other fees would go through us to Churchill Downs there was a huge uproar by the public. The newspapers, various media outlets including radio talk shows went into high gear. The narrative was the Kentucky Derby would be changed forever, that Churchill Downs was greedy, and that our company was nothing but a carpet bagging interloper. The free ride was over, and locals who had financially benefited from the lack of control over the race were upset!

Something had to be done! The incessant media noise and negative stories had to be dealt with. It was decided that our company would hold a contest to design the official logo the following year’s race, Kentucky Derby 114. The contest was open to amateur and professional artists locally and around the country. The winning artist’s work would be printed on the tickets, the programs, tee shirts, hats, pins, all collateral print materials needed to advertise Kentucky Derby 114. The winning entrant’s artwork would be EVERYWHERE! Anyone involved in licensing for even a short period of time knows what “everywhere” means in a major sporting event.

We were turning a negative into a positive; more importantly we were including the local community. Once the contest was announced those negative stories turned positive. People were genuinely excited about the contest and the prospect their artwork might picked for the upcoming Derby. Artwork began arriving at our offices and a judging panel chosen. One of the judges was a Churchill Downs vice president. Other prominent people from the Louisville arts community agreed to be judges.

The contest was held, and the winner announced. She was a 21-year-old college student graduating from one of Kentucky’s major universities. She young, blonde, articulate and looked like she had come from central casting. The winning artist’s work was published in newspapers all over Kentucky and picked up elsewhere in the country. All was well … UNTIL!

UNTIL

All was well until a few weeks before the race. An account manager returned from a meeting, walked into my office and announced his last account thought one of the horses in the official logo had five legs! Say what? “Ridiculous”, I thought. I stopped what I was doing and really looked at the logo. At first I didn’t see anything to question, but then there it was. The lead horse either had a funny looking tail or that horse really did have five legs!

Stop for a moment and consider how many people viewed the official logo after the winner had been announced. The logo went to each licensee and in turn to their art departments. Counting the people who viewed the logo in the newspapers, those who worked with it in graphics departments around the country, there were countless thousands of people who never noticed the five-legged horse. Obviously, that included the esteemed panel of judges. The list is truly endless. No one saw the five-legged horse until it was too late.

How late is too late? Well, by this time virtually everything had been manufactured with the official logo for the 114 Running of the Roses. Merchandise had been shipped and was being sold. Flags and banners used to festoon Churchill Downs track were being hung.

I wondered if I was the next to be hung.

Tomorrow Part Two – Now the Fun Begins