Tigers List Archive

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Mail From: Stephen Waybright <(email redacted)>

For anyone following the Ford GT naming saga, I thought I'd toss out
some business aspects of brand licensing to be considered in what
constitutes a "fair price". I've set up a couple brand license deals at
HP, but would not consider myself any kind of expert, so consider this
as you wish.

It is very common for brand license deals to be based on % of revenue,
but it can be structured any number of ways. The structure and amounts
should reflect the financial benefit drawn from the investment/cost,
which can vary a lot from deal to deal. I have seen deals from 7% all
the way up to 25%. I'm sure some go higher.

The larger numbers are justified when the licensee will have much
better business performance with the "licensed" brand than without it.
Take two nearly identical T-shirts, one with an official FORD blue oval
and the other blue generic block letters FORD. How many of the latter
you think will sell? (few) Will they sell for the same price as the
real logo shirt? (NO) The brand license is worth a lot to that guy (I'd
say 7-10% is fair). Now how much do you think a FORD brand license
would be worth to Ralf Lauren for the same shit, Ford logo vs Polo? $0
- 0%.. since he already has a brand that will sell the shirt.

The point is, the value depends on the specifics of the business and
products.

So back to the question of fair... how much more money will Ford make
if they named the car Ford GT40 vs Ford GT? That would establish the
cap on what Ford should pay for the rights, though they may want to
over-pay for sentimental reasons. I'm not sure $10k is all that
insulting (assuming it's just for the car and not the related apparel
and accessories).

>From the other side of the argument... how much are the rights to GT40
worth to Bob Wood and his business? Probably quite a bit, since whoever
has those rights, has instant credibility as a GT40
supplier/manufacturer and can rack in the green for all those GT40
t-shirt, etc deals, so I can see the case where Ford charged him more
than they'd be willing to pay to use on the car. Bob would stand to
have made more $ if he had let Ford license the name for the new car
for free, but retained the rights for all the related apparel and
accessories, or negotiated a rev share of Ford doing that.

available for brand license consulting,
Stephen Waybright





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This read-only message was archived from a public mail list.
Mail From: (email redacted)

Thanks for filling in the info on licensing.

What Bob is saying is that he wants to be treated like Ford
treats others. At his talk, he said over and over, he is open
to negotiation. Not the take it leave it attitude of Ford lawyers.
But he still would like the free VIP auto show tickets.

He opened with the 3% offer as his beginning position. Ford
rejected that and went to their friends in the automotive press.

Bob has been the sole source of GT40 parts for years and years.
He provides the same source of support to GT40 owners as has
over beloved Rick McLeod and Curt Meinel. If he sold his name
to Ford for their marketing, how long do you think they would
support the original GT40's? Ford had withdrawn from racing
the GT40 after unsuccessfully chasing the Red Stallion, when
the Gulf Oil GT40 finally beat Ferrari. Don't forget that the
GT40 is not an American car. It was designed and built in
England. Can you imagine an original GT40 owner calling
Ford racing 10 years from now if Ford bought the name, and
requesting a new control arm? A control arm for a car Ford did
not build. Bob's company would and has supplied that support.
Bob runs a small company with a loyal group of clients. Yes
he could make some money selling out, but his loyalty lies in
his friends and customers. Just like Rick and Curt. I applaud
that dedication.

As you can tell, I will not genuflect in front of the Blue Oval. They
are a monolithic corporation out to make money. Don't forget
that. Making 1000 GT's with a MSRP of $175K is a joke on us.
The real selling price is many times more. I've heard tales of
some people asking over $400K for their car, if it is ever made.
Ford is trying to give the air that the GT will be the ultimate
supercar. Already every GT made has been recalled to fix
faulty control arms. Ford send letters telling the owners to not
attempt to drive the car. They would come and get it with an
enclosed van (embarrassment?) and a rental car of choice.
So much for Quality is Number One.

Personally I would rather have one of the McLaren's instead
of a replica GT40.

Saturday night and feeling cocky.