Losing in the NCAA men’s Final Four tourney can be costly

This time last year, as the undefeated University of Kentucky men’s basketball team stormed into the Final Four in Indianapolis, the school was getting ready for the merchandising windfall that comes from a national title.

Logos were prepared, T-shirts designed, and a deal was made to sell chunks of the championship court to fans. Coach John Calipari was going to sign some pieces, and a truck was ready to cart them away.

Then Wisconsin beat Kentucky in the semifinals, a very expensive loss for almost all involved. More than 500 products and designs had been approved, an effort that commanded some 600 hours of work by Fermata Partners, the Atlanta-based company that handles licensing for the Wildcats. A Kentucky championship would have produced at least $30 million in retail sales, estimated the company’s managing director Derek Eiler, about $2.5 million of which would have gone directly to the university.

Ahead of this weekend’s Final Four in Houston, the University of North Carolina, Syracuse, Villanova and Oklahoma are going through the same process. Because the NCAA men’s basketball tournament goes from the semifinals to a championship in just 48 hours, schools, licensees and retailers have no choice but to prepare entire product lines, orders, shipping plans and marketing campaigns in advance. Four different sets of championship plans are being prepared—only one will ever see the light of day.

These plans are in place to capitalize on fan interest, which peaks in the moments after big games. The industry has primed itself to pounce. "You get a laser-focused set of fans, and as quickly as they come, they go away very fast," said Raphael Peck, president of apparel for Fanatics, the country’s largest online retailer of licensed college merchandise.

“Sooner Magic”

Companies like Fermata and IMG’s Collegiate Licensing Co., which is also based in Atlanta, broker this process for the schools they work with. CLC does some degree of planning for each of its tournament teams, usually around 50 schools. This year, the company represents all of the men’s Final Four teams, and managing director Cory Moss said Friday that 98 percent of the preparations for the Final Four teams are already complete.

CLC works with firms including Fanatics and Knights Apparel, a unit of Hanesbrands Inc. which supplies product to retailers like Wal-Mart Stores Inc. and Target Corp. This week, the Spartanburg, South Carolina-based company has set up operations in the hometowns of all four semifinalists—moving people, artwork and blank products into printing shops.

"After Saturday, we’re down to two, and the two that are out, all those resources, you pack up the artwork, pack up the blanks, ship them back to the warehouse and start shutting down shop," Knights CEO Joe Bozich said. He declined to say how much that process costs.

Fanatics has prepared six to eight creative concepts per school for more than 100 products devoted to the winner. If it’s Oklahoma, for example, fans will get "Sooner Magic," a term resurrected from a 1976 football game, plus products that celebrate the team’s three-point shooting prowess. For 10th-seeded Syracuse, championship apparel will play up their Cinderella story.

Contingency plans

Neither Fanatics nor Knights Apparel will print a single championship shirt until the game ends. (A handful of official NCAA hats and T-shirts do get printed, just enough to cover either winner immediately after the game.) Brick-and-mortar retailers now prep what are called “if win orders.”

The Shrunken Head Boutique, a longtime Chapel Hill’s outpost for UNC memorabilia, has lined up orders with eight different vendors, manager Genny Wrenn said. More than 8,000 championship shirts will arrive at 6 a.m. Tuesday, April 5—if and only if the Tar Heels win.

Long ago, being prepared was more expensive. When UNC advanced to the championship in 1981, the Shrunken Head stocked title shirts to sell that night. When Isiah Thomas led Indiana to victory, the North Carolina shop printed “almost” at the bottom and sold as many as possible.

What happens with the discarded plans? They’re saved in case they’re needed in the future. Fermata Partners has a folder for a 2015 Notre Dame football national title (the Irish finished 10-2) and another for a 2014 Oregon football championship (the Ducks lost to Ohio State in the title game).

“We haven’t had to reuse one yet, but we’re ready,” Eiler said.