Kentucky might have missed out on nearly $1.5 million in royalty - WDRB 41 Louisville News

Kentucky might have missed out on nearly $1.5 million in royalty revenue with Final Four loss

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LOUISVILLE, Ky. (WDRB) - Kentucky's first loss in almost a year Saturday was felt by basketball fans all across the state.

But the Wildcats' 38-1 record had an equally crippling effect on merchandise sales, from some of the biggest retailers in the country all the way down to the university itself.

The money that could have been gained from a 40-0 season is significant, said, Derek Eiler, co-founder of Fermata Partners, the exclusive licensing agency for Kentucky's consumer products.

“It was probably a $10 million opportunity for all hands,” he said.

Those hands - from big box retailers to local apparel stores - missed out on major sales of National Championship and 40-0 apparel, Eiler said.

“That is felt from retailers like Walmart and Fanatics, down to the manufacturer (Nike), and eventually down to the university that gets royalties.”

It's also felt by local retailers.

JD Becker Superstore sells mostly Kentucky and Louisville apparel and novelties at its two Jefferson County locations.

Owner John Becker said his sales always increase around NCAA Tournament time, but the potential increase this year would have been something entirely different.

“It would have been a lot of dollars,” Becker said. “It's a combo effect with the National Championship and the undefeated season. Put those together, and it would have been a significant amount of money.”

That trickle-down effect of merchandise revenue also makes it to the university.

Eiler said Kentucky is losing out on close to $1.5 million in royalties from National Championship and undefeated-related merchandise.

For perspective, Bloomberg reported that Kentucky's royalties were $6.73 million in the 2011-12 fiscal year, which put them seventh in the country among royalty merchandise earners.

And while Eiler said Fermata Partners doesn't represent Wisconsin or Duke, the two teams remaining after Saturday's Final Four games, he said they'd have “no comparison” to Kentucky's royalty revenue.

As a small private school with a relatively low alumni base, Duke may make $250,000 off championship merchandise sales, Eiler said.

Wisconsin, as a state school with no legitimate competition from other schools for fan support, has a bit more potential, but Eiler said it would still likely stay below $1 million.

“There's still a benefit, because (Kentucky) made the Final Four,” he said. “But it's nowhere near what could have been.”

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