A-B to Slash Olympic Spending

Sports-Marketing Cuts Create Openings for MillerCoors

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CHICAGO (AdAge.com) -- Anheuser-Busch InBev is seeking to cut its spending on the Olympics by as much as 50%, according to a published report.

A-B, struggling to service its massive debt load following last year's $52 billion merger with InBev, is in the midst of a grueling, $2 billion cost-cutting plan that has already led its vaunted marketing machine to slash agency fees, trim its agency roster and yield exclusivity in many of its major sports-marketing deals.

The cuts have also included about 6% of its work force.

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The sports moves have created some openings for the No. 2 U.S. brewer, MillerCoors, to move its brands onto platforms A-B has long dominated. Those may include the Olympics, according to a Wall Street Journal report today.

A-B spent $365 million on sports sponsorships in 2007, and that figure rose last year, according to executives. The company also has a major deal in place to sponsor soccer's 2010 World Cup.

In a statement responding to questions about the Olympic cuts, A-B President Dave Peacock said: "For competitive reasons, we won't comment on the details of these discussions. We are in negotiations, with no final decision made at this time. Anheuser-Busch continues to invest in sports sponsorships, which includes a four-year renewal of the United States Olympic Committee and its teams through 2012."

Miller may partner with NBCU
NBC Universal has approached MillerCoors about advertising during the 2010 and 2012 games, according to a person familiar with the matter. The games were formerly locked down by A-B, which spent more than $50 million on ads during the 2008 Olympics.

A-B used exclusive deals with sports venues as large as ESPN in the 1980s and as small as minor-league ballparks as a key component in building its dominant market share in the U.S. brewing business over the past three decades. But the brewer has increasingly moved away from such deals in favor of cheaper arrangements in recent years as it has looked to control costs, efforts that have accelerated since the InBev deal.

Exclusivity typically carries with it a 33% premium, according to sponsorship evaluation firm IEG.

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