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Wednesday, October 24, 2012

Council Decides to License City Logos to Create New Revenue Stream

• Assistant City Manager Says Agreement Is Unique Opportunity for a ‘Substantial Amount of Revenue’

BY BILL KOENEKER

Can the City of Malibu make money on an official logo? That is the gamble a majority of the Malibu City Council agreed to take this week when it approved spending $90,000 from its reserve fund to hire an exclusive licensing agent for the municipality.
The lone dissenter was Councilmember Skylar Peak, who said, “$ 90,000 sounds like a ton of money. We could use that money for a skate park.”
The idea, which was highly touted by former Councilmember Pamela Conley Ulich, comes at the behest of the city’s  communications ad hoc committee comprised of Mayor Lou La Monte and Councilmember Laura Rosenthal, who said, “Sometimes you have to spend money to make money. To find a revenue stream is wonderful and exciting. It is a unique opportunity and the rewards could be very substantial.”
“I see in the staff report it is recoupable,” said Councilmember Joan House.                      
Excel Corporation is the licensing agent that has been hired by the city, which has agreed to provide it a recoupable fee of $7,500 a month for a period of 12 months for the total of $90,000.
Excel’s representative Rod Stone told the council that he anticipates that the $90,000 fee will be recouped with the city’s logo program and the general fund will be reimbursed for the full amount plus more.
The council was told about how other municipalities approach branding and licensing. They also were given information on successful campaigns as well as material on companies and agents being used by other cities.
The assistant city manager noted that the city is not interested in pursuing a branding campaign, but solely a licensing program.
“The city has a unique opportunity to receive a substantial amount of revenue from its own licensing program,” Assistant City Manager Reva Feldman said.
Stone said the way to do that is to create City of Malibu logos that can be licensed.
“We will create a logo approved by you. You have total unfettered control over everything you decide, the designs and the packaging,” he said.
It was also explained that it is not the name Malibu, but rather an official City of Malibu logo that is owned and licensed by the municipality.
The name Malibu is already in widespread use on everything from vehicles to alcoholic beverages and outdoor lighting. The city cannot restrict that branding.
The council and the public were assured the city is in good financial shape, but a new revenue source could create the opportunity to fund additional community benefits, such as public safety, environmental programs, parks and recreation services, capital projects and overall enhanced city services.
After extensive research with a variety of licensing agents and firms, it was determined by staff that Excel Corporation would be appropriate to represent Malibu, according to Feldman, who indicated very few licensing agents have experience in licensing and marketing public entities.
Excel has represented such entities as the Brooklyn Bridge and the Statue of Liberty/Ellis Island, They also represent individuals, private companies and are currently assisting with the centennial celebration for the City of Beverly Hills, according to the assistant city manager.
The one-year renewable agreement  approved by the council provides for the municipality to retain control over all logos and that the city will have the final approval of all licensing agreements and product selections.
The city retains the existing city seal and would continue to use the seal for all official municipal documents and official city business matters, according to Feldman.
The proposed agreement calls for the city to receive revenue based on wholesale sales. The city would receive about 10 percent of the wholesale revenue. Excel will be paid on a percentage basis.
“As long as you have sufficient skin, I’m sure you will help us,” said Councilmember John Sibert.
Malibu city officials seem convinced that given Malibu is a well-known name around the globe, there should be many opportunities for the city to make money on a licensing program.
“The City of Malibu is an internationally recognized community. There are many opportunities for the city to develop a licensing program with an official City of Malibu logo. Currently, the city does not have a trademark or the licensing rights to the name ‘City of Malibu’ or to any specific logo,” added Feldman. The attempt is to create a new revenue source for the municipality. which listened to an oral report from the staff about two months ago.
It is not an attempt to change the image of the city or to promote tourism. “Most municipalities that develop a licensing program do so in an attempt to change the image of their city,” Feldman said, “These cities typically hire a licensing or branding company that markets the city for tourism. The City of Malibu is not faced with this challenge, as the city is highly regarded and hosts 15 million visitors a year.”

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