CHICAGO (AdAge.com) -- Anheuser-Busch InBev, the top spender in sports wielding a $365 million marketing budget, is giving up a number of prized exclusive deals with major leagues -- a major shift in strategy for the marketer.
In recent months, the brewer has reworked more than a dozen pro-team partnerships involving the National Hockey League, National Basketball Association, Major League Baseball and Major League Soccer in ways that sacrifice exclusivity for cheaper deals. The move has allowed beer-industry rivals to step in and pick up key deals once off limits to them.
The King of Beers earned its crown as the No. 1 sports marketer, as ranked by IEG, by following a path beaten by A-B sports-marketing legends Chuck Fruit and Tony Ponturo: Lock up premium properties with exclusive deals that lock out the competition.
That emphasis on exclusivity kept other brewers off ESPN for most of the 1980s, turned the Super Bowl into a Budweiser showcase and kept brands such as Miller and Coors out of dozens of stadiums and arenas around the country.
But now it won't be the only brewer sponsoring NHL teams such as the Columbus Blue Jackets. A team spokesman said A-B also walked away from naming rights on an in-arena pub. "They continue as a strong partner, but it's no longer an exclusive relationship," he said. The Blue Jackets have since added MillerCoors as a sponsor.
Long time coming
Given that the merger with InBev was financed with $45 billion in debt, prompting A-B's pledge to cut $1.5 billion in costs, the new arrangement sure looks like a means toward that end. But Dan McHugh, A-B's VP-media, sponsorship and activation, said the shifts were more about reallocating resources than cutting costs.
He said the brewer has been moving away from exclusive-sponsor deals for several years. According to Mr. McHugh, in 2004, 86% of A-B's sports deals were exclusive; today, 56% are. "This is something that has ebbed and flowed" for years, he said. When pushed, however, he conceded that more has been flowing more than ebbing in recent months, when A-B has dialed down previously exclusive deals with the MLB's San Diego Padres, NBA's Miami Heat, the Blue Jackets and other professional teams.
A-B's willingness to allow rivals access to pro-sports venues it once dominated is a sea change for the country's leading brewer, who practically invented the practice. "It's common now to see brands try to blanket a facility and lock out their competitors, and, historically, you'd probably give [A-B] credit" for coming up with it, said Paul Swangard, director of the Warsaw Sports Marketing Center at the University of Oregon. "But, in some ways, they may now see an opportunity to cash in on the equity they've built up with the previous strategy, because people may naturally connect them with these properties after all this time."
Speculation has raged for months over just when InBev's renowned fiscal machetes -- A-B's once lavishly appointed ninth-floor executive suites are now being turned into a sea of cubicles -- would find their way to what IEG estimates as a $365 million sports-sponsorship chest. By giving up the exclusives, A-B stands to save a bundle; according to IEG, exclusivity costs about 33% more than a shared sponsorship.
Nevertheless, Mr. McHugh said A-B's spending on local sports will actually increase this year. "Sports are always going to be a very important part of our plan," he said.
Big enough share
As A-B opens properties to competitors, however, it's unclear how attractive a Heineken or Corona may find venues still in many cases heavily cloaked in Bud ads. "It really depends on what kind of share you can get in the stadium," said one Miller wholesaler who said the company had recently turned down a newly available MLB broadcast-advertising opportunity in his market because it didn't come with rights to use the team logo. "You don't what to be someplace where you'll be totally outnumbered."
The move, moreover, might not bode well for sports, already hunkering down from marketer cutbacks in a rocky economy, most notably from General Motors Corp. The former marketing leader has trimmed its budget substantially to meet an obligation to cut $600 million in marketing costs over the next four years. Leagues and teams are reaching out to some unlikely sponsors -- such as gambling casinos -- to recoup lost revenue.