Securitization of brand names: Basic concepts and its use in practice

Abstract

Today, the securitization industry is international in scope, large and rapidly growing, and the nature of it has changed to become largely intellectual property (IP) and future flow based. Brand securitization, one type of IP securitization, can be used to generate cash; however, today it can also be used to generate many other brand management options such as brand protection, risk minimization, assistance in collection of licensed-out brand revenue streams and others. We provide examples of how companies worldwide have begun to use brand securitization transactions for a variety of purposes. Our research showed that marketing educators and some marketing practitioners lack familiarization with the concept of brand securitization and its uses. The intent of this article is to promote a background on brand securitization, its basic concepts and its use in practice that may not be familiar to a general marketing audience. Our primary contribution is the discussion of the emerging use of brand valuations to elicit brand management options otherwise unavailable to firms.