What is licensing in the context of sports merchandise?

In the context of sports merchandise, licensing refers to the process where a team or organization grants permission to a company to produce and sell products that feature the team's brand, logos, and trademarks. This arrangement allows companies to create a variety of merchandise, such as apparel, accessories, and memorabilia, that fans can purchase. By granting these licenses, teams can expand their brand reach, generate revenue through royalties, and ensure that merchandise aligns with their branding standards.

Licensing is vital in the sports industry as it helps teams leverage their brand identity and fan loyalty without directly producing the items themselves. It encourages a wider distribution of branded products, which can enhance fan engagement and loyalty through accessibility to official merchandise.