Fans of Coors Light’s “press conference” commercials involving National Football League coaches will have only one more season to enjoy the spoofs. That’s because beginning in 2011 Bud Light will replace Coors Light as the official beer of the NFL.
The deal between the NFL and Bud Light is reportedly a six-year deal costing Anheuser-Busch $1.2 billion. It’s a significant bump from Coors’ initial four-year, $300 million deal in 2002 and its five-year, $500 million extension with the NFL in 2005.
While Anheuser-Busch will be paying a significant bump in sponsorship rights to the NFL, a leading scholar of sport sponsorship told Fitness Information Technology that Anheuser-Busch’s calculated risk will still most likely produce a financial gain, even with a heated labor dispute between players and management leading to a possible work stoppage.
“Deals this size and length are always a financial risk, since there are many variables, including the possibility of a work stoppage by the NFL down the road,” said Steve McKelvey, an associate professor of sport management at the University of Massachusetts. “I assume their contract addresses this possibility, but this can’t overcome the potential fallout in terms of goodwill and incremental sales if a work stoppage were to occur. That said, I suspect A-B has crunched the numbers to understand how the investment will pay dividends financially. I think the days of buying a sponsorship just so a competitor doesn’t get it are over.”
Interestingly, research has shown that fewer than half of fans cannot properly identify official sponsors. In March, the SportsBusiness Journal released the results of a survey in which fans were asked to identify the NFL’s official sponsors in a variety of categories. Coors Light was correctly chosen by 30.2% of “avid” fans, while 38.1% of the same group believed Anheuser-Busch was the official beer sponsor of the NFL.
Since oftentimes even diehard fans can’t correctly identify the official sponsors of leagues or events, why do companies continue to dole out nine- and in this case 10-figure deals to become official sponsors? McKelvey, who had a case study that detailed the NFL sponsorship program in a 2006 issue of Sport Marketing Quarterly (Vol. 15, No. 2, pp. 114-123), said official sponsors receive greater leverage in other avenues, such as dealing with retailers.
“While enhancing brand awareness is a nice added value for league sponsorships, it’s not exactly necessary for A-B,” McKelvey said. “Large scale sponsors on the level of A-B care less about how many consumers can identify them as official sponsors, as opposed to how much increased sales will be generated by leveraging their official sponsorship status at retail locations. A-B will be able to leverage its official association with the NFL to incentivize and motivate its sales staff, garner bigger and better in-store displays, open new retail accounts, etc.”
While Bud Light will become the official beer of the NFL in 2011, that doesn’t necessarily mean Coors Light will discontinue marketing its beverage to football fans. Bud Light actually had a “tailgate approved” infomercial theme to its campaign last football season, and with similar creativity Coors Light could continue to use football in its campaigns, although it will no longer be able to specifically utilize the NFL brand in its marketing.
“When I was negotiating league-wide sponsorship deals at Major League Baseball, we included stipulations in our contracts that if a company ceased to be an official sponsors it could not, for a period of some years, engage in promotions to ‘give the appearance that it’s continuing its official sponsorship’ (or language to that effect),” McKelvey said. “The enforcement of a clause like this proved tricky in terms of defining ‘gives the appearance.’ Unless the NFL has such a clause with real teeth in it, Coors will no doubt be able to cleverly design promotions that utilize a football thematic without infringing any NFL trademarks.”