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The incredible rise of Oregon as a merchandising powerhouse

Matt Dyste laughs at what it was like in 1992, when he began his job overseeing the University of Oregon's licensing program.

"I would tell people in the business that I was from the University of Oregon and retailers would look at you strange and say, 'Why would we want Oregon product?' " Dyste recalled. "Today, everyone wants to talk about what we're selling."

The rise of Oregon as a national power, not coincidentally, has fueled the growth of the Ducks' brand. Once a sleepy West Coast outpost, Oregon now is known for its innovative marketing and appeal to a younger audience.

In the past two years, Oregon has jumped into the top 10 most popular college teams by licensing royalties. Last year, the program brought in $4.8 million in royalties -- four times what it brought in only five years before. Today, nearly 400 licensees make Oregon gear, and the competition outside of the state to make green and yellow merchandise is at unprecedented levels.

"We're fast becoming people's second-favorite team," said Arlyn Schaufler, the general manager of The Duck Store, the university-owned, not-for-profit bookstore that has seven retail shops and is the largest retailer of the school's gear. Schaufler notes that after Oregon, California and Washington, the next two most popular states for sales are Texas and New York. Data from Fanatics, the largest online-only sports retailer in the country, shows that this will be the fifth straight year that the Ducks have been among the top-five best-selling college football teams on its site.

Making Oregon cool didn't happen organically. In 1996, one year after Oregon played in its first Rose Bowl in 37 years, Nike co-founder and former Oregon runner Phil Knight gathered his top executives to talk about how they could make Oregon more top-of-mind -- especially in the eyes of recruits. In the meeting was Nike's top designer, Tinker Hatfield, who also was on the track and field team during his days at Oregon.

Hatfield's team dreamed up more futuristic jerseys -- a range of combinations that no other program had ever flaunted -- and redesigned the logo. Gone was was "U" from the "UO" mark, leaving just the "O." The letter was redesigned with the inside rim in the shape of the old track at Hayward Field, the University of Oregon's legendary venue. The outside rim was the shape of what Autzen Stadium looked like as you flew over it.

Nike's cooperation with Oregon didn't come without strings attached. The world's largest shoe and apparel company would get exclusive rights to use the "O" on apparel and hats, and more recently the same exclusive rights to the phrase "Win The Day," for which Oregon holds a federal trademark.

The impact wasn't immediate. Oregon was still very much seen as a regional brand in 2001 when Joey Harrington's image was plastered on a billboard in Times Square to promote his Heisman campaign. That's not the case today, where hat stores in New York City frequently have Oregon products for sale alongside usual suspects such as Michigan and Alabama.

Part of it was the Nike push -- some of it backed by Knight's own money -- but the other was simply winning. In the past five years, Oregon is in its second national championship game with a remarkable 60-7 record over that span.

What's amazing about Oregon's rise is the tremendous upside that is ahead. Last season, Oregon's royalties bested that of national champion Florida State by more than $200,000.

Nike products make up the largest share of royalties to the university (about 33 percent), but with the tremendous demand, local retailers have been chipping in more.

Sew On Mackenzie, a screen printing company in nearby Springfield, Oregon, has seen its Oregon-licensed business nearly triple. The number of its employees has doubled to 50 since 2009. Fifteen years ago, when the company started making Oregon product mostly for the Ducks stores, it seemed far-fetched that the company would one day have a six-figure purchase order ready to go if Oregon won the title. That is indeed the reality.

"Everyone wants to do Oregon product now," said company president Tyler Norman said. "It is pushed us on the creative and marketing side to work harder than ever before."

If there's one limit to what Oregon can do, it's using the classic Donald Duck character through the "O" logo. Oregon received permission to use it in the 1940s thanks to a handshake agreement with Walt Disney himself. A more formalized agreement came decades later, but the school has made it clear that licensees don't have access to the mark because Disney owns it.

On Oct. 18, to celebrate the 20th anniversary of "The Pick," Kenny Wheaton's 97-yard interception return in a victory over Washington which led Oregon to the Rose Bowl -- what many Oregon fans consider the turning point in their program -- the Ducks wore classic jerseys that featured the duck through the O on the sleeves. Though a partnership with Disney, the jerseys hit retail.

"We sold 800 of them in a day and a half," The Duck Store's Schaufler said.

The tremendous success of Ducks gear actually is passed back to the students. In 1917, the University of Oregon sold its bookstore to students and faculty to pay for the team's trip to the Rose Bowl, essentially making it a non-profit where revenue would be pumped back in the form of discounts.

Today, the Duck Store has seven locations and broke a three-day sales record by setting up a pop-up shop in Los Angeles before this year's Rose Bowl.

Oregon has done all its licensing in-house, but last month, the size of the business led the school's athletic department to share its licensing responsibility with Fermata Partners, an agency that counts Kentucky, Miami and Georgia as clients.

Chris Prindiville, who founded the company, previously worked for Nike and graduated from Oregon in 1996. He said that those who buy Oregon gear skew younger, something that's unique to the traditional college business, which favors older alumni.

"Oregon was attractive to us because of the progressive nature of the business," Prindiville said. "It's a brand first and a licensing program second, and that was attractive to us."