Marketing Careers in the Licensing Industry

MARKETING CAREERS IN THE

LICENSING INDUSTRY

Institute Research Number 402 ISBN 1-58511402-2 O*Net SOC Code 11-2021.00

MARKETING CAREERS IN THE

LICENSING INDUSTRY USING FAMOUS SPORTS AND ENTERTAINMENT IMAGES TO SELL PRODUCTS FAST-GROWING BILLION DOLLAR INDUSTRY YOU HAVE SEEN THEM A THOUSAND TIMES:

Bart Simpson mini-bobble head SpongeBob Square Pants pajamas Mighty Morphin Power Rangers action figure NASCAR’s CRANKIT UP CD Chargers retro football jersey Spider-Man video game These are called licensed products, and licensing is a $175 billion industry worldwide, almost $100 billion annually in the United States. Licensing is the use of known names and images applied to goods or services in exchange for financial return and hopefully, a lasting relationship between the product or product name and you, the consumer. A career in licensing can be found in a number of different industries. Product licensing takes place in these categories: Entertainment/character (movies, TV, cartoons, comic book characters) Music Sports Corporate brands/trademarks Fashion 2

Art Nonprofit organizations Publishing and collegiate Licensing is done all over the world. You are surrounded by licensed products. The clothing, toys and video games licensed from cartoons, comic books, TV shows and movies are pretty obvious. Enter a sports stadium and you are inundated with the teams’ jerseys, hats, key chains, pennants and posters. Your favorite fashion designer may also license a perfume or cologne, a famous artist might have a recognizable painting reproduced on stationery or mugs. Rap stars have designed clothing lines, automobile company logos are licensed for die-cast miniature cars, and your next door neighbor might drive the Eddie Bauer version of the Ford Explorer. Licensing has become a big part of the product line for many companies and accounts for a significant percentage of their yearly profits. Disney, which licenses products from the Winnie-the-Pooh characters, earns approximately a billion dollars annually from Pooh stuffed animals, books, toys and fine china! Product licensing is not something that is done casually or by accident. A movie studio does not randomly decide to allow a video game company to create a Spider-Man video game. This is a business of careful thought, forecasting, identifying purchasing trends, studying demographics (what age group or gender buys certain products) and knowing about manufacturing and retailing. It is a profession that combines business and marketing skills, adds creativity and comes up with licensing programs designed for a particular property.

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LEARN THE LANGUAGE AS YOU INVESTIGATE THIS PROFESSION IN DEPTH, IT WILL HELP TO BE FAMILIAR

with the lingo. Licensing Selling – or leasing – the right to use a trademarked or copyrighted name, logo, slogan or likeness on goods or services. The rights are granted for a defined period of time for distribution in a specific geographical area. In return, a fee or royalty is paid to the party controlling the rights. Licensing Agent The person – or independent agency – that represents and manages the licensed property for the licensor. Licensor The owner of the rights. Licensee The company or person to whom the rights are granted. Property That entity which is trademarked, copyrighted or otherwise legally protected. Usually a character, name, logo, slogan, design or person. Licensing Categories Types of products that can be created for the license (for example, toys, books, video games, home furnishings, sporting goods and gifts). Guarantee The minimum amount of money the licensee agrees to pay the licensor during the term of agreement, no matter how well the product sells. Advance The first payment the licensee pays to the licensor upon signing the contract. Usually it is credited against future royalties. Royalty Rate The amount of money the licensee agrees to pay the licensor to be able to use the property. This is usually based on a percentage of the products’ wholesale price. In this profession, you could have one or many responsibilities. You can be the licensor, the licensing agent or a licensee. You could be in charge of selling licenses in one or more categories, creating licensing programs or approving products. On the licensee side, you could work for a sporting goods manufacturer seeking sports licenses, or a large corporation looking for ways to license its logos and designs.

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POPULAR LICENSING DEALS: SPORTS, ENTERTAINMENT, CORPORATE Sports Sports licensing accounts for almost 15% of all licensed products sold. In addition to apparel like jerseys, hats and sneakers, there are team logos or player likenesses seen on trading cards, collectibles, action figures, toys and even video games. Sports licensing is made up of the National Football League, the National Basketball Association, Major League Baseball, the National Hockey League, college licensing, motor sports such as NASCAR, and event licensing, such as an Olympics or World Cup. As a general rule of thumb, there are no licensed tobacco or alcoholic products, or any other “products that are in poor taste” that would reflect negatively upon a sports club. Collectibles and memorabilia are big business in sports licensing. You may have purchased an unsigned basketball with the NBA logo from a sporting goods store for a few dollars. Imagine that same basketball is perhaps one of only 100 signed by Michael Jordan, and suddenly you have a valuable piece of memorabilia because of the authentic signature. They are both licensed products, but the difference is substantial. A signed and authenticated Wilson basketball with Jordan’s signature is selling for about $1500 on-line, whereas an official NBA basketball, the one used by the players, runs about $80. Because licensing is big business, if a product is made without authorization, large licensors will go after the culprit with all the legal power they can muster. Control of the license is important. The more control a licensor has over the property, the better the chance for more profit. Most major sports leagues have centralized their licensing programs under a single office within that league and control licensing on behalf of their member clubs. The NFL was the first to do this.

Entertainment and Character Licensing There are a number of differences between sports and entertainment licensing. There are only a very limited number of sports and teams. It is a smaller industry than entertainment, not necessarily in terms of dollars, but in properties available. Sports licensing executives look at everything for the long term. In 10 years the New York Yankees will probably still be playing baseball. Licensing programs are created for the present and future. In

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entertainment, each feature film or cartoon is separate and each has new characteristics. Much of entertainment licensing is a “get in and get out” type of business. The life expectancy of a cartoon show has to do with how popular it is and whether or not it will be on TV next year. There are certain “evergreen” properties in entertainment, however. Bugs Bunny and Mickey Mouse, for example, have been around for generations and will probably continue to be licensed for many years to come. Character and entertainment licensing is also more speculative than sports in that you never know whether a movie is going to bomb, which will mean the licensed products probably will not sell. Entertainment licensing is more than plastic characters from The Little Mermaid given away with a fast food meal. In entertainment licensing, there is a substantial amount of money involved, so a lot of time is spent creating licensing programs. There needs to be enough – but not too much – product in the marketplace; the products produced must complement the property by appealing to the right age group and gender; there should be advertising and marketing support available; and retail stores must be willing to carry the merchandise. There could be hundreds of categories to be negotiated from toys and dolls, to collectibles, housewares, gifts, home furnishings, books, video games and apparel. Within each of those are subcategories. Whether or not you go into things like board games and other secondary products is really dependent on how strong the property is and what the level of interest is by the manufacturing community and the consumer. Lord of the Rings is a good example of a property that has been well licensed. The product choices are consistent with what the licensors think is the core consumer and interest level for the movie. There are a variety of collector products, like figures and weapon replicas, games and books, but the marketers have not gone overboard in licensing products to a younger aged market, which may not be appropriate to the film. Even with manufacturer interest, they have withstood the pressure to sell to the younger age range knowing that the film has a more mature audience.

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Corporate Licensing Corporate licensing, which constitutes about 20% of all licensing, is the most conservative side of the industry. In fact, licensing corporate logos (called “identity equity”) is considered a pretty safe activity. You are already eating Campbell’s soup; you buy Mom that cute Campbell’s Kids Spice Jar collection and it reminds you of Campbell’s and its “M’m M’m goodness.” Each summer your Dad barbecues ribs and sprinkles on Tabasco sauce. This summer he does it wearing a tie, shirt and apron decorated with little Tabasco bottles. You have always loved M&M candies. Now you can choose your favorite stuffed (called plush) M&M by its color, and grab up M&M dispensers, bath towels, key chains, mugs and candles – all licensed M&M products. As long as licensees and products are selected that will be appropriate to the brand name or corporate image, it is found money, because these companies do not have to invest money to manufacture and distribute the products. The process is called leveraging equity – making the most out of a company’s corporate identity as possible. As much as the goal here is to license the logos of well-known companies for profit, licensing also serves to create brand recognition. Companies use licensing as a means of keeping the brand name in front of consumers, and often to appeal to a group of consumers who may not have purchased the soup, or M&Ms, or Tabasco sauce in the past. Certainly there has been criticism of licensing. Detractors claim that some Saturday morning cartoon shows are merely commercials for their licensed toys. Others say that there are simply too many licensed products in the marketplace. Although these may be valid points, as long as there are sports fans buying retro basketball jerseys, women wanting the Fendi logo on their handbags, collectors purchasing Coca-Cola clocks, and Eminem selling Shady clothes, licensing will remain around in a big way.

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HISTORY OF LICENSING THE HISTORY OF LICENSING DOES NOT GO BACK VERY FAR. WHILE IT IS POSSIBLE

that Roman senators wore rings carved with some emblem of the Roman Empire, it is doubtful that they dressed in tunics emblazoned with Julius Caesar’s likeness. Even if they did, no one was paying Caesar for the right to do so! The history of licensing really begins in the 20th century. It is not studied in depth like the history of cars or airplanes or even advertising. Yet because it is a multi-billion dollar industry, it is interesting to review its quick evolution. The media created licensing. Newspaper comic strips were enormously popular in the early 1900s in America (don’t forget that television had not yet been invented). It was a character in a comic strip – Buster Brown – that began America’s fascination with licensed products. Everywhere Americans looked, they saw this round-faced boy with blonde bangs. In the cartoon strip, created by cartoonist Richard F. Outcault, Buster got into all sorts of mischief with his sister Mary Jane and his dog Tige. The Brown Shoe Company bought the rights to the name in 1904, and soon after, Buster Brown shoes were being sold. By the 1920s, merchandising began to be influenced by the popularity of movies. The lucrative potential of licensing celebrities in those days was tempting, but unfortunately for the celebrities, there were few legal protections. The Disney Studios jumped on the licensing bandwagon with its most famous character, Mickey Mouse. Mickey’s likeness first appeared on a school notebook in 1929. In 1935, Mickey became the first character licensed on a lunch box. One of the original Mickey Mouse metal lunch boxes, if you could even find one, would be worth around $1500 today. From then on, character and celebrity licensing took off. Although the first Disney license was sold for $300, today’s Disney Consumer Products division earns about $13 billion in retail sales of licensed products! Although comic strip characters continued to thrill millions of people, adding plenty of profit to the newspaper industry, the media phenomenon that really triggered the entertainment-licensing boom was television. Ask your parents or grandparents about Howdy Doody 8

and Hopalong Cassidy. These were two of the first characters to appear on television: Howdy in 1947 and Hopalong in 1949. The cowboy Hopalong Cassidy was a good guy who wore black. By 1950, the first lunch kit was licensed using Hopalong Cassidy’s likeness on a vacuum thermos bottle inside an illustrated lunch box. On the popularity of these products came lunch boxes with the likenesses of Roy Rogers, Tom Corbett Space Cadet, The Lone Ranger, Superman and many more early TV heros. There are hundreds of characters and celebrities that have been licensed from movies and television. Cartoon characters such as Felix the Cat and Daffy Duck, movies like Shrek, popular TV shows like Star Trek, and children’s programs like Sesame Street have all fostered licensed products. The Tickle-Me Elmo doll based, on the Sesame Street character, created one of the largest licensing stampedes. In the 1970s came Jaws, a film event that set the stage for future blockbuster licensing programs. The popularity of the film created an unprecedented demand for a wide variety of shark products. Then came one of the greatest examples of entertainment licensing in history-the movie Star Wars. Believe it or not, many companies first turned down the chance to buy a license to create Star Wars products. Kenner Toys finally bought the master toy license, which gave a single toy company rights to a broad array of product licenses in the toy category. This was the first time a license like this had been granted. The public reaction to the film created such a demand for Star Wars products, that during the Christmas season following the film’s summer release, Kenner was forced to sell certificates for toys that would be delivered at a later date. Released in 1977, the licensing of Star Wars items has generated more than $2 billion in profits for its owners. Although licensing could bring in huge profits, companies were still reluctant to take chances. Significant amounts of money had to be risked to manufacture products that might not sell. The studio that produced the popular TV series M*A*S*H wanted to restart the show’s licensing program given its enormous popularity, but it could not get anyone to take a chance on a license. Finally a company reluctantly purchased the rights to produce M*A*S*H T-shirts featuring the show’s well known logo. The end result was the biggest selling T-shirt of the year, creating significant revenue for both the licensee and licensor. There are many such stories like this in licensing. Companies passed on little known (at the time) properties such as ET and Teenage

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Mutant Ninja Turtles only to find that they had passed up an important business opportunity. This is all history now. Today, E-Bay features licensed collectibles on its website, and the Jeep logo shows up on baby strollers. A Mortal Kombat video game spawns two movies and a live action and animated TV series, and at Universal Studios the Terminator attraction, T2-3D, is accompanied by a retail store devoted to T2 licensed products. Apparel manufacturers enjoy their greatest revenue when new licensed items are introduced for the United States Olympics teams. The movie series Rambo, first released in the late 1980s, is still generating licensing revenue and recently spawned a live stunt show attraction at an Italian theme park. Even celebrities who wish to appear anti-establishment are cashing in on licensing. Eminem will soon debut a line of Shady sportswear to be sold in department stores. Sports licensing is one of the fastest growing segments of the licensing industry. In the late 1950s, early 1960s, the NFL appointed Roy Rogers Enterprises to act as its agent in licensing. There were two noteworthy aspects of this: it developed a national licensing program on behalf of the NFL and its member clubs; and it centralized team rights under one umbrella organization whereby licenses could be granted for all member clubs from one entity.

Corporate

licensing has a long history. Today, Campbell Soup sells Campbell’s Kids bobble-head dolls. But the Campbell’s Kids were originally introduced in 1904. Coca-Cola licensed products have a long history, and Dr. Pepper trays and calendars appeared around 1900.

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WHERE YOU WILL WORK YOU COULD WORK FOR THE COMPANY OR PERSON WHO OWNS THE LICENSE, FOR A

licensing agency that represents that company, or for licensees, which are usually manufacturers. You have a number of other options, as well. There are licensing jobs in advertising agencies, in sports leagues, for concert promoters, with media companies, for design companies or with nonprofit associations. A job in the licensing industry could take you anywhere in the world. Many countries have licensing agencies for European and Asian products, and some act as representatives for United States properties. You could be in Kansas working for the company that licenses minor league sports teams, or with a major corporate licensing firm with branches in other countries. Most of the major licensing companies are in metropolitan cities, and usually film or TV licensing is handled on the West or East Coast. Toy manufacturers can be found across the country. Most of your day-to-day duties will take place in an office setting. This could be a two-person office or a large company with separate divisions for sales, legal, acquisitions and approvals. While most of your work will be conducted from your office, the sales part of licensing is sometimes most successful when done in social situations, either at lunch or dinner. If you work for the licensor, you could find yourself in charge of an exhibit booth at a trade show. Licensees, usually the manufacturers, may attend specific trade shows geared to industries like apparel, electronics and toys, which include, at least in part, the chance to display products for licensors. Much of your work will be conducted over the phone, in meetings, at other people’s offices, via e-mail and even by cell phone. Travel is a big part of some licensing positions, so plan to spend a lot of time in airports and hotels.

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YOUR WORK DUTIES Working for the Company that Owns or Represents the License (the Licensor) The way a licensing company is organized depends on its size and the number of properties it represents. A licensing division of a large company like a movie studio, or a corporate licensing company, may be structured with a sales staff responsible for selling very specific category rights. This is called brand management style. In the licensing division of a major motion picture studio that has many properties to license, you may be in charge of selling rights in the toy category, while someone else sells apparel, another person sells video games and someone else is in charge of publishing rights. Or, you could work in the product approval department responsible for giving final approvals. A business affairs department, often staffed by lawyers, is responsible for the negotiation of the contracts beyond the general business terms. Other attorneys, or paralegals, will be responsible for generating the contracts. Many times there will be a marketing or promotion department that is responsible for developing relationships between key retailers and setting up marketing and promotion campaigns to complement a property’s licensing program. Another licensing company structure is based on the team management approach. If you worked for a large company in charge of the licensing of multiple corporate trademarks you would be a member of a team responsible for developing a licensing plan for one or more properties. Your responsibilities may include writing and presenting a proposal for the client or doing due diligence on manufacturers selected to become licensees (investigating the companies to be sure there are no legal problems). You and another team member might be in charge of creating the Style Guide, the core tool in licensing. This guide enables any manufacturer to correctly create the licensed goods, packaging and advertising materials. It includes color palettes, the logo type size and style, and other particulars of the property. The two of you might then be in charge of approvals based on this guide.

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For companies that do not have the size property to warrant having single category sales, people will be generalists and sell multiple property rights. The key management people may simultaneously be looking for new properties, or if they are lucky, they are turning away more business than they can handle. In this type of company, you may be in charge of both selling and making approvals. Or your job might be to track the royalty payments to be sure your company is getting its share of the profits. Here’s a specific example: If it were your job to find toy licenses for a TV studio with a Saturday morning cartoon property, you would first meet with the producers to determine the age range and gender you want to target. Together you would decide on the types of toys you want in the marketplace (does this TV show lend itself to action figures, board games, dolls, or interactive toys?). After obtaining the property’s key artwork, someone on staff would create the Style Guide and prepare any other materials that will be necessary to the licensing process. Deadlines would be determined. Sometimes there are reasons to hold off on distribution (to tie in with a show’s launch date, for example). In many cases, distribution is as soon as the licensee can reach the market. Remember it takes anywhere from nine months to two years from commencement of development for most products to get on the store shelf. Next you would determine what toy companies to approach. You would use the office’s licensing database, licensing trade journals and the Toy Association directory. You will have attended key toy trade shows where you will have seen the range of products a company manufactures. If you have contacts with these companies, you will call the people you know. Otherwise, you will cold-call them. Your responsibility will also be to arrange meetings at their offices and at key trade shows like the New York Toy Fair. If you are unfamiliar with a particular company’s capabilities, you will visit their offices and sometimes their manufacturing plants. This way you can get a good feel for the type and range of merchandise they produce. You also get a sense of the kind of company it is and how easy or difficult they will be to work with.

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Once you have decided who to approach, your job will be to sell the licensing rights, and then to negotiate the terms. Terms are not only financial. Terms also include what product rights are being granted, the length of the contract, what territories are included (US, North America, world, for example), marketing dates and any other key aspects of the license. Once you have agreed to terms, you will take care of issuing the licensing agreement, getting the agreements signed, sending the art work, and handling the collection of money (royalties).

Working for the Licensee Your job responsibilities are not that much different on this side. Imagine yourself working for an apparel company that makes clothes geared to preteens and teenagers. Your company’s licensing department is looking for new licenses. You will be attending trade shows, like the annual New York Licensing Show, as well as trade shows featuring specific categories like toys. Mattel Toys, for instance, grants licensing rights to manufacturers to create various Barbie non-toy items, like girls’ apparel. Reading trade publications will be absolutely necessary to find out what is going on in entertainment, sports, the toy and publishing industries and wherever else your company’s product will fit. Your people skills and sales ability will be necessary here. You will have to convince licensors of your company’s ability to manufacture the product on time and distribute it to retailers. You will have to prove to the licensor that you have relationships with retail stores which will insure distribution. Writing proposals will be a big part of what you do, as will negotiating contracts. More than likely it will be up to you to usher through the paper work, get product out for approval, liaison with retailers, and follow through on all the details. Travel could be a big part of your job, too. In addition to traveling to those trade shows, you will visit licensors and retailers. Depending on the level of your job, you could be required to entertain clients at lunch or dinner and may find yourself working after hours and on weekends.

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LICENSING PROFESSIONALS TELL ABOUT THEIR WORK I Am the Founder and CEO of an Independent Licensing Agency That Represents Entertainment, Artistic, and Corporate Licensing Clients “Most properties will dictate who the intended consumer is. We merely try to create product that will have the broadest consumer impact. My agency represented licensing for the movie Terminator 2: Judgement Day, an R-rated film but with a unique main character and the charisma of Schwarzenegger. Knowing that we had a popular character as the focal point of the film, and a production and marketing budget that would be huge, we knew that the film would have significant licensing appeal to younger kids, with products like action figures, and to adults, with interesting collectibles. We began the project by reading the script and seeing what visuals the producers were developing. Certain product categories generate larger royalties than others. The key categories in entertainment tend to be video games, toys, apparel and publishing. For T2 we went after video games and the toy industry simultaneously, since each has long development cycles – anywhere from nine months for toys to two years and up for video games. Both action figures and video games were natural product extensions given the film’s storyline and central characters. The key to a successful licensing program is to be sure that each licensed item relates to the property. It is critical that you not overwhelm the marketplace with product. There’s no chart that says what level of product is sufficient. You can only gage your licensing program in terms of the appropriateness of the categories you choose to license, giving care not to overwhelm the consumer with too much choice. If the leading toy products for T2 are action figures, vehicles and play sets, how many other toy items should you license? It is important to remember that there is a limited amount of money that a consumer will spend on your property, and they are likely to purchase only a certain number of products. If you are 15

offering them too broad a spectrum of choice, you are running the risk of diluting their interest. Having said that, in this industry it’s very difficult to walk away from offers of advances and guarantees by manufacturers looking to secure a place in a popular licensing program. But experience shows that too many products can actually help kill a property. The licensing cycle begins with a sale of specific rights to a manufacturer. Next we give the licensees the materials that will allow them to develop the products. It could be the script of the movie, or a variety of images of the film including the key characters, vehicles and sets. They use this material to create product in keeping with the look and feel of the feature film. In the development stage, we will look at the product numerous times to be sure it accurately represents the property. When we talk about approval, it’s not just of the product. We must approve the advertising and packaging materials as well. The right of the licensor to approve is a very important and fundamental right of licensing. It has to do with the obligation you have to protect your trademarks. Once approved, the manufacturer will move to the manufacturing cycle and get product out to retail stores. We also have an obligation to make sure that during the manufacturing term, we are seeing product on a periodic basis to ensure that the quality is being maintained. Once the product is in the stores, we receive royalty reports from the sale of the product throughout the term of the agreement. For some movies, certain actors have negotiated contract terms that require their approval for any licensed products that contain their character likeness portrayed in a film. For a movie like T2, Arnold Schwarzenegger had the right to approve all products on which his likeness as the Terminator was used. Mr. Schwarzenegger personally looked at each item that had his likeness and signed off his approval. We had, and still have, a very successful run with T2 licensed products all over the world.”

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I Am the Founder and Owner of an Independent Sports Licensing Agency “I started at one of the oldest licensing companies in the industry in 1975. The company, which belonged to a large corporation, was the licensor for the Looney Toons cartoon characters, the DC comics super heroes like Superman, Batman, Wonder Woman, and various TV shows and movies. I joined the company as an entry-level administrative clerk. It was a summer job, which I was able to extend past the summer. Slowly but surely I rose through the ranks – I was made an account executive in charge of finding licensees in the gifts, novelties and housewares categories. Because of the number of properties we represented, the position client account executive was created to make one executive the brand manager for each property. I became a brand manager for Major League Baseball, and my responsibilities included sales, marketing, advertising, retailing, trade show exhibitions and licensing management. I was expected to do an annual report and an annual presentation to the client, and I was the day-to-day liaison with the client on strategy, marketing, and so on. Major League Baseball was not just one client for me – it was 26 member clubs. We reported to Major League Baseball, but when we made a licensing deal, I had to submit it to 26 clubs for approval. If I didn’t get an approval from one club, I’d have to get on the phone and lobby with the club to approve the deal. If we were doing any retail promotions in a particular market, we would work with that local club to do things like ticket promotions and player appearances. Management never asked me what I wanted to specialize in, nor did I wake up one day and say “I’d like to pursue sports,” or, “I’d like to pursue entertainment.” It was simply circumstantial. I always look back on this and wonder: If I had been made a client account executive on the entertainment side of the company, would I now be an entertainment executive instead of a sports executive? When I resigned from the company in 1996, I had been employed by one company for 22 years – it was the only job I had ever had. 17

I decided to go out on my own as a consultant and independent licensing agent. I have a one-person office, and I employ experienced people to work on specific projects. My cash flow changes based on how many projects I have. My first client was the 1999 FIFA Women’s World Cup (FIFA is the world governing body for soccer). For two years, I focused on nothing but the licensing program for the Women’s World Cup, which is the world’s single largest women’s sporting event. The United States is a difficult market for selling soccer licenses. It’s the Super Bowl that is the most successful television event in the United States. Super Bowl gets about 125 million viewers domestically, 800 million viewers worldwide. Although soccer gets about 3 BILLION viewers – half the planet – for a final game, soccer as a licensing vehicle faces certain challenges in this country that the NFL and baseball don’t. The public has not embraced soccer as a spectator sport, although they have as a participation sport. Licensing this was a tough sell. I think college is a necessity in today’s competitive society, and today’s electronic society. I would suggest majoring in business. If I were looking at a résumé, I would be more inclined to call in the person who has the business degree before someone who has a liberal arts degree in philosophy. The three areas of study I think would be most crucial to licensing are: Marketing Marketing is very big in sports. We try to find marketing people, not salespeople. It’s much easier to teach sales to a marketing person, then it is to teach marketing to a salesperson. In sales, you either make the deal or you don’t. Marketing, however, is planning, strategy and forecasting. It’s saying we’re here today, here’s where we’re going to be in three years, here’s how we’re going to get there and here’s where we’re going to be in five years.

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Retailing It’s extremely important to have a background in retail, not necessarily to have worked in a store, but to understand retailing. You need to know that stores like Wal-Mart and and Target are going to work six to nine months in advance in terms of booking merchandise and scheduling deliveries. Sporting goods chains will work on a shorter lead-time. Independent dealers will even work on even shorter notice. I know exactly what a retail buyer’s job is. So I know when I go in to persuade that buyer to put a rack of WUSA T-shirts out there, I have to convince that buyer that WUSA is going to sell better than any other product they have. You plan in-store promotions – ticket giveaways, player appearances, gift with purchase, sweepstakes to win an all expenses paid trip to the Super Bowl. If you understand retailing and the value of promotion to a retailer, then when you go in to make your presentation, you will be impressive with your knowledge. Basic Understanding of the Law Law 101 so to speak, because we do deal with contracts. But I don’t think you need to be an attorney, because most licensing companies will have a General Counsel or law firm on retainer. I’ve been in the industry since 1975. I’m still in the business, and I wouldn’t change a thing.”

I Am the Executive Director of Domestic Licensing at a Major Hollywood TV and Film Studio “I have approximately 16 years of licensing industry experience including sales, personnel management, product management, retail, negotiations, business planning, collections and product development. Over the course of my career, I have worked on several types of licensing: character, corporate, entertainment and literary (publishing).

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I have two years of college, but I did not graduate from college. I did not set out to have a career in the licensing industry. I began my career with a major toy manufacturer, licensing high profile toy brands like Barbie and Hot Wheels. I started in international licensing interacting with the international licensing agents and supplying them with sales materials to assist in sales efforts in their local territories. This position was administrative in that I facilitated licensing proposals submitted by the various agents and collected quarterly reports from them. A year later, I was promoted to manager on the domestic side of the business, and I alone managed the sales efforts for Hot Wheels. I was responsible for increasing revenue by 15%. My position required that I research the top manufacturers in the various categories, negotiate and secure appropriate licensing partners. I also assisted the paralegal in the execution of licensing agreements. After seven years with a toy manufacturer, I moved to an animation studio where I held the position of director of licensing. This employer was much smaller, but my responsibilities increased to include sales, negotiations, paralegal work, product development and collections. During my one-year tenure with the animation studio, I worked on launching a licensing program at the same time the animation studio was launching a new children’s animated television series. Launching this program required strategic planning. First, we had to secure a toy partner to co-fund the TV series and support the launch with television advertising. Once secured, I filled out the program by licensing apparel, bedding and home furnishings. Next, I moved to an independent licensing agency. This job expanded my experience by allowing me to work on the licensing of feature films, established brands, television shows and published books. It gave me an introduction to licensing trademarks. I started with the company as director of sales and after a few years, I was promoted to vice president. In this position, I gained my greatest experience and achieved my greatest growth. My day-to-day responsibilities included solicitation and negotiations with manufacturers, trouble-shooting between sales and creative teams and managing personnel. 20

In my current position as executive director domestic sales, I report to the senior vice president of worldwide licensing. I manage a sales team of three whom I meet with to keep them motivated and on target. In a studio environment, priorities often change. We are responsible for licensing the feature films and the new television shows. My position requires that I prepare business plans for each licensed property. I interface weekly, sometimes daily, with the finance, legal and product development teams. We are always researching new companies to license our properties. This requires a daily dose of reading industry trade papers, local and national newspapers and magazines, and surfing the Internet. A lot of time is spent making cold calls to new prospect companies to pitch them our properties, or updating old partners on upcoming projects. On a daily basis, I have legal documents to review on deals that my team members or I have negotiated. I meet weekly with senior management to discuss my department’s progress and to receive new assignments. I chair a biweekly meeting of the sales division (domestic and international), which meets to discuss the various deals they are prospecting or negotiating. Additionally, my position requires that I make presentations to outside departments and major prospects. On a monthly basis I review the revenue sheet against the projected budget we have been allocated.”

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PERSONAL QUALIFICATIONS FIRST AND FOREMOST, A LICENSING PROFESSIONAL SHOULD BE SOMEONE WHO

enjoys working with other people. This is a career filled with negotiations, relationships, diplomacy, and persuasion. Social skills are a must. At the same time, because selling a license is such a big component of the job, you should be someone who likes to sell, is self-confident and can handle rejection. You will need to be able to follow a project from start to finish, which means you need to be self-motivated, well-organized, resourceful, focused. You will need to be able to meet deadlines. You will also need to be a team player – someone who works well with other people. It also helps to be able to multi-task – meet more than one responsibility at a time. You may be required to sell, negotiate, approve product, stay on top of deadlines, meet with numerous executives, look for new business, and be an administrator. Someone in licensing should be creative and able to think beyond the obvious, a person able to recognize issues that may impact on each other although they are not directly related. In other words, someone who thinks logically but creatively. To be a good negotiator, it helps to have good math skills and to be able to write quickly and clearly. Much of this profession revolves around forecasting, written proposals and correspondence. Attention to detail will come in handy when reviewing contracts.

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ATTRACTIVE FEATURES OF THE CAREER BEING IN PRODUCT LICENSING, ESPECIALLY ON THE ENTERTAINMENT SIDE, GIVES

you the opportunity to flex your creative muscles. It is a chance, for example, to translate a property into a three-dimensional item. Taking something like a screen image from a feature film and seeing it come to life in an action figure or a collector piece, is fascinating and fun. Licensing is also an avenue for other creative talents. It is a chance to develop an entire program of licensing for one product from start to finish. You will strategize and formulate what to license, where to sell it and how to make sure it maintains the company’s image. You are limited only by your imagination. If you can imagine a variety of ways a property can be used, you have only to find the people to carry out your vision. Because of the sales nature of licensing, you get to work with a variety of people and companies. You may find yourself dealing with members of the highest level of a company. If you are personable, outgoing and persuasive, you will have every opportunity to express those qualities in this industry. Licensing can be profitable. Naturally it depends on the company and especially on the properties you have to license. On the licensee side or manufacturing side, you can hit it big with a single license. The chance to license the Teenage Mutant Ninja Turtles proved to be a profitable undertaking for the licensor, the licensees and the retailers. Although not always the case, sometimes you do get to meet the movie stars, producers, directors, sports figures and coaches involved with the license. At times, you may have to meet with a celebrity or members of a rock group who have product approval rights. Licensing may take you out of the country to meet with agents or manufacturers. You could travel to international licensing trade shows in England, Japan and Germany. You will also travel around the United States to the many trade shows that feature toys, electronics or gifts. If you represent a major sporting event or film for licensing, you may be invited to the games or movie premiere.

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UNATTRACTIVE FEATURES EVERY INDUSTRY HAS ITS UNATTRACTIVE SIDE. THE WORLD OF LICENSING WILL

introduce you to plenty of people who can be difficult to deal with. Sometimes there are major egos involved, at other times, just when you are facing urgent deadlines, it may take forever to get approvals for the products. As a licensor, you may end up having made a deal with a manufacturer who goes out of business before you get paid. As a licensee, you could make the wrong choice on a property, invest a lot of money in creating and making the product, and ultimately have it bomb in the stores because the property is not hot. Being in licensing can also mean facing rejection. Maybe the property you are offering for license is a difficult one to sell and you cannot get a licensee to take a chance on it. Depending on your property, you may have to knock on doors repeatedly and make calls to people you do not know who may not even take your calls. If you own a licensing agency and are searching for properties, you may find yourself in competition with many other agencies to represent the same property. You may face long hours and long meetings. It can take months to negotiate a licensing deal – and it could fall apart in the end. You may have to meet with many different people before a deal is struck. If you bought the rights to license a sporting event or other time-sensitive property, you could experience difficulty meeting manufacturing deadlines. If you are an independent agent not representing many licenses, you could have serious cash-flow problems. Once you sell a license to a manufacturer, it may be a year or longer before you can expect to see royalties from the sale of the product. A lot of travel is involved in your job. If you are not fond of getting on airplanes all the time, you should find out in advance what travel your job entails. Standing at a booth at a trade show for days on end can be tedious, so can talking to people for hours at a time. If you do not like sales, or do not like dealing with people one on one, this may not be the right career choice for you. Jobs in licensing are not plentiful. Jobs in sports and entertainment licensing especially are very competitive. Most likely you will start from the very bottom rung before you earn any responsibility. 24

RECOMMENDED EDUCATION YOU CAN GET THE EDUCATION YOU WILL NEED FOR A CAREER IN LICENSING IN A

variety of different ways. Although a college degree is not mandatory, having that undergraduate degree will make you more desirable to employers. In today’s world, jobs like these are highly competitive. Almost any business career today requires a college education. Not only will a degree give you an edge, but also the classes you will take in college will prepare you to work in today’s global marketplace. In college you will have the chance to use the services of career placement offices, apply for internships and network with working alumnus who can help you in the future. A basic college preparatory course of study in high school will help you get into a college or university. Think about the basics when you think about college: What can my family afford? How far away from home do I want to be? Do I want a large or small school? If you think you might want to get into the licensing field, investigate schools with business, marketing and communications programs. Ask about the availability of internships, the participation of the school’s alumni and the employment record of the career office. If you think you might major in marketing, focus on your writing and math skills. You almost certainly will be required to complete college algebra, statistics and perhaps even calculus. Experience with computers and various business software programs will be helpful as well. There are many people in this field who majored in communications, political science, and other nonbusiness related areas. Some of them went on for MBAs in marketing, and others went on to law school. You do not have to go to law school to be successful in the licensing industry. There are a number of job openings that call for candidates with BA (Bachelor of Arts) or BS (Bachelor of Science) degrees, but do not specify that those degrees be in marketing. College majors in advertising, marketing, communications, or business are good concentrations to explore. No matter what major you choose, licensing careerists stress that college courses in these areas will help enormously. Writing courses, public speaking and computer skills are also mentioned constantly. Any kind of marketing classes will give you a solid background, because you will use those skills in licensing. If you decide on a marketing major, you will take courses that teach you about the 25

distribution of goods and services, consumer behavior, pricing policies, advertising, sales and management. You will learn about forecasting and take statistics courses. Some course curricula provide classes in new product development and even entrepreneurship. One thing is clear, there are no majors called licensing in college. There are, however, majors in sports management, and those concentrations usually include classes in sports licensing, event management and marketing. Possibly the best known school with a specific focus in sports marketing is the James H. Warsaw Sports Marketing Center within the University of Oregon’s Charles H. Lundquist College of Business. http://lcb.uoregon.edu/warsaw/ The Warsaw Center provides an entire undergraduate curriculum that includes business, marketing and licensing. This school points graduates in the right direction both through internships and its alumni/career office. Warsaw also offers a two-year MBA that includes more business and finance classes. Admission to the undergraduate program is through admission to the University of Oregon’s regular undergraduate school. You will take liberal arts courses and core business classes in accounting and economics, and you will have to maintain a good average in those classes. You apply for admission to the business school for your junior year. Also check out the undergraduate marketing/business programs at Northern Kentucky University, which offers a major called Sports Business. http://www.nku.edu/~mgtmkt/sportsbusiness.htm Classes include: event management and marketing, sports media, sports sponsorship, sports commissions, sports lawyers, manufacturers and distribution, and finance. Although kinesiology is really the study of movement, the University of Michigan’s kinesiology department offers a degree in sports management. http://www.kines.umich.edu/academics/grad/sportmgmt.htm

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In addition to the standard liberal arts requirements, students declaring this concentration will take courses in marketing, management, and the business and legal aspects of sports. There is opportunity to take electives like sports ethics and management of events and facilities. At least 200 hours of internship credit will be required. In addition to its kinesiology department, Michigan’s business school offers a wide-ranging marketing curriculum. Note, though, that the requirements for being admitted to the undergraduate business program are rigorous, and the competition is tough. Michigan is well respected for its career assistance, both through the career office and its alumni associations. Miami University in Ohio has a fine marketing program that includes the chance to learn about sports marketing, international marketing, research, decision-making, and even new product planning. http://www.miami.muohio.edu/academics/majorsminors/majors /marketing.cfm You will be required to take classes in buyer behavior and marketing strategy, and electives like retailing and promotion management. Miami of Ohio also has a good career guidance office, internships and contacts. All of these subjects will help you in licensing. Other schools all over the country offer marketing programs. Most all of them require that a student first take a basic liberal arts curriculum that includes literature, humanities and history as well as math and science courses. A well-rounded student is far more attractive to employers than one who has done nothing but focus on one area of study. If you are serious about getting into the field of licensing, learn as much as you can about general marketing: retailing, merchandising, advertising, promotions, sales, design and manufacturing. You should also get some general knowledge of contracts, copyrights, trademarks and accounting practices. Find out as much as you can about the primary categories of licensed products: toys, apparel, publishing, electronics and video games.

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If you have already graduated from college and are debating whether to go to graduate school, you have many choices of schools with business and or marketing MBA degrees. If you are one of these post-college students or an adult who wants to get into licensing from another expertise, there are several other ways to get a good background. New York University offers a certificate in sports, entertainment and events marketing through its School of Continuing and Professional Studies. http://www.scps.nyu.edu/departments/certificate.jsp?certId=508 Five courses need to be completed for the professional credential and include classes in entertainment marketing, music marketing, and sports licensing. The University of California at Los Angeles (UCLA) has a Continuing Education program geared for adults but college students can sign up as well. Its Entertainment Studies section offers a professional certificate for 40 hours of study. The program includes an annual class devoted to licensing entitled, Licensing and Merchandising for Film, Television and New Media. LIMA, the professional association of the licensing industry, is planning to launch a licensing certification course that will consist of 60 hours of instruction over a period of one year taught by leading professionals in the industry. The classes will be held both in-person at the New York Licensing Show and at other venues on both the east and west coasts as well as on-line.

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EARNINGS SALARIES IN LICENSING VARY GREATLY. WHAT YOU EARN WILL DEPEND UPON

where in the country you work, the size of the company and your experience. It may also depend on whether you are the licensor, licensing agent, or licensee. On the low rung of the ladder, as an administrative assistant for a licensor or licensing company, the salary range is between $25,000 and $40,000. As a manager in those companies, the salary range jumps to $50,000 to $75,000 – with the average salary about $60,000. Vice presidents and senior vice presidents can earn anywhere from $75,000 to $250,000. The average salary for a vice president is about $150,000. Most companies offer some benefits, such as insurance coverage, retirement programs and profit sharing. Being the owner of an independent licensing agency is different. While you may guarantee your employees specific salaries, your take-home-pay may vary year-to-year. Your salary may be dependent upon what properties you represent and how successful they become, your office overhead (how much it costs to run the office) and how quickly you are paid by licensees. Working for a licensee – the company that buys the rights to produce the products – a manager can average $60,000, while the vice president averages over $100,000. Remember, too, that working as or for a licensing agent, your salary might be tied to the business you bring in. You could work on commission – a percentage of what the licensee pays. Your job could be part salary, part commission, or salary plus a bonus for bringing in a certain percentage of profit. Compare those salaries with the beginning salaries of marketing majors in general: between $30,000 and $40,000. Marketing managers in the manufacturing sector of the toy and sporting goods companies can earn, on average, about $75,000. In advertising and promotion, the average is a little higher.

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OPPORTUNITIES EACH SECTOR OF THE LICENSING INDUSTRY HAS CONTINUED TO GROW IN RECENT

years. Given that in the last 20 years licensing has gone from a $30 billion industry to an estimated $175 billion industry worldwide, it most definitely has a positive future. Product licensing is also growing on an international scale because certain markets outside the United States are creating their own properties and are buying more licenses. Licensing positions exist beyond those that you think are the most obvious. The obvious opportunities lie in becoming a licensing agent for the licensor, or working for the licensee. There are positions in the licensing departments of the seven major film studios, in TV studios, in major league sports, and in large corporations that license their products or trademarks. Additionally, there are about 500 to 850 independent licensing companies of all sizes. But when you think beyond the obvious, you will discover that your options are more far-reaching than you thought. Careers exist in the manufacturing companies that produce licensed products, such as Reebok, Adidas and Puma; toy companies Mattel and Hasbro; video game companies like EA or Midway Games; and publishers like Scholastic, Macmillan, and Prima. You can also work in law firms that specialize in licensing, advertising agencies, on special projects (like when a large company is sponsor to a major sporting event), in companies that do product promotion or for large (or small) media companies. While you may not start off in licensing, by working in one of these fields, you will gain experience and knowledge about product licensing. In sports licensing, you may begin in a college campus store that sells collegiate licensed apparel and sporting goods. You could work for a minor league sports team. You could also work for the Olympic Organizing Committee or NASCAR. In addition to the three major fields of licensing, do not forget jobs in fashion (designer licenses), art (representing artists in gifts and housewares), and music licensing (concerts and individuals). Nonprofit organization logos can be found on all sorts of goods. Think of museum gift shops, charity events and fundraisers, or environmental organizations like the World Wildlife Fund.

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GETTING STARTED IF YOU ARE STILL IN COLLEGE, BUT YOU THINK YOU WANT TO INVESTIGATE THE

world of licensing, consider an internship or summer job. There are a couple of ways to do this: Examine The Licensing Letter Sourcebook, which is usually available in the reference area of a public library. This bible of the industry lists licensors, licensees, agents and others involved in this business. Make a target list of offices in your geographical area and send letters or e-mails of inquiry. Another possibility is to contact LIMA, the International Licensing Industry Merchandisers’ Association (www.licensing.org) and ask if they would consider sending an e-mail broadcast to their members letting them know you are looking for an internship. Check out the websites of large well-known corporations in your town. Many of the corporate websites have information about internships and career opportunities. Internships are invaluable for gaining experience and making contacts. A minor league team advertised for an intern for 20 to 30 hours a week and offered college credit. Duties included working on sponsorship proposals and distributing materials for the media. If you are ready for a full-time position, think broadly. In addition to sending out résumés, check with your school’s career center and alumni office. Career center personnel can also help you create a résumé, and your business school can offer help. Consider attending the licensing conference held in June each year during the New York Licensing Show (which now offers a student discount). Check the LIMA website. This is the most comprehensive licensing program available anywhere. These sessions are geared to professionals but may be helpful to new graduates. If you want to be in sports licensing, begin to think creatively. The average person thinks football, baseball, basketball, or hockey when they think of sports. Working for a major league is very attractive – you and a few thousand other people will have submitted a résumé to this very desirable and powerful market. Go ahead and send your résumé to the four leagues and request an interview. But then locate the minor league teams; every league has a minor league affiliate. There are 150 minor league baseball clubs. So if you get hired by the Toledo Mud Hens (http://www.mudhens.com/), you are going to learn how to do in-stadium promotion, ticket promotion, sell sponsorship sales, how to sell advertising program space and how to develop 31

season ticket and special ticket campaigns. You may be doing it for a small local club, but after two years of that, with your academic education and some real world background, you become a pretty valuable job candidate. Consider sports sponsors. Sponsorships are generally the largest deals made in sports other than a broadcast deal. You will really learn what consumer marketing is all about by working for these companies. You cannot go to a sporting event without seeing Coca-Cola, McDonalds, AnheuserBusch and other major corporate logos. Every one of them has dedicated sports marketing programs. Some of these companies spend years on a major sporting event because they are paying big dollars to sponsor the event. Check out the company’s website, make some phone calls, and send in your résumé. Be willing to begin at the very bottom of the ladder. Also consider a job with one of the big manufacturing companies that buy licenses to sports properties. Imagine the training you would get if you were the license product manager at Reebok, which recently spent $100 million for a 10-year licensing deal with the NFL. If you are just getting out of college, you are not going to be named vice president of licensing for Reebok, but an entry-level position in that department would give you tremendous experience. Look at third party partners – those companies that buy the rights to be the official sponsors for major events. In the airline industry, for instance, American Airlines is the official airline of the NFL. MasterCard often buys official rights, as do Hilton Hotels and other corporate giants. Check out the broadcast partners – national and cable networks, local television and radio stations. Once you learn promotion and marketing at these companies, you can jump into the licensing arena. Advertising agencies are a potential source of jobs. When McDonalds buys a sports sponsorship, they will not only manage it themselves internally, but they will have two or more ad agencies working on this. If you are working on one specific brand or project, you will make plenty of contacts. Don’t forget to investigate toy, apparel and sports equipment manufacturers and publishing companies. Send your résumé to the licensing departments of major motion picture and television studios. Also remember that they sometimes

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hire independent licensing agencies in other cities. The Licensing Letter Sourcebook will help you locate that information. Internet job boards are potential sources of employment, although you may have to go through a number of links to find what you want. Be creative with titles. Not everything will be found under licensing. But a hit on www.disney.go. com/disneycareers, for instance, keyword licensing, may lead you to a variety of specific and related jobs in this field. Or try the keywords: consumer products, product licensing, marketing, advertising, merchandising or brand manager.

LICENSING JOB SITES n www.licensing.org n www.teamworkonline.com n www.sponsorship.com n www.onlinesports.com n www.sportsworkers.com n www.licensingworld.com/jobs/positions.html n www.sportsmarketingnetwork.com/jobs.html n www.hockeyjobs.nhl.com

EDUCATION WEBSITES n On-Line Learning www.worldwidelearn.com/marketing-degrees.htm n Warsaw Center www.warsawcenter.com n University of Michigan www.kines.umich.edu

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n Northern Kentucky University www.nku.edu/~mgtmkt/Marketing.htm n Miami University of Ohio www.miami.muohio.edu/academics/majorsminors /majors/marketing.cfm n New York University www.scps.nyu.edu n UCLA Extension (keyword Entertainment Studies) www.uclaextension.org n LIMA (International Licensing Industry Merchandiser’s Association) www.licensing.org

PUBLICATIONS n The Ultimate Guide to Sports Marketing by Stedman Graham n Merchandise Buying and Management by John Donnellan n Licensing Update by Gregory Battersby and Charles Grimes n Advertising Age n Entertainment Marketing Letter n Hollywood Reporter n Kidscreen n License! n The Licensing Book n The Licensing Letter n Licensing World n The Toy Book n Variety

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n The EPM Licensing Letter Sourcebook n Worldwide Licensing Resource Directory

ASSOCIATIONS n Toy Industry Association www.toy-tia.org n International Collegiate Licensing Association http://nacda.ocsn.com/icla/nacda-icla.html

COPYRIGHT 2007 Institute For Career Research CHICAGO CAREERS INTERNET DATABASE www.careers-internet.org

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