Why MillerCoors Passed On NFL Deal
Coors Light will lose one asset this year that arguably helped its ascent -- its deal with the NFL as the league's official beer sponsor. The pact terminated at the end of this season and now belongs to Anheuser Busch InBev, which negotiated a six-year deal worth an estimated $50 million a year for Bud Light.
A-B has the exclusive right to use the NFL shield in Bud Light advertising and retail displays. MillerCoors can still run ads during games, just as A-B did when MillerCoors was sponsor. (It all may be a moot point this year, of course, if the NFL and its players union fail to strike a labor deal in time to save the season.)
In an interview with Ad Age, MillerCoors CMO Andy England acknowledged the deal's value: "This was a great partnership," he said. "It was a good deal for us. We were paying an appropriate price. We activated the heck out of it and it did for us what we wanted to do."
But he also said that the timing was right for an exit, noting that when Coors Light first struck the deal in 2001, it was before the 2008 merger that created MillerCoors, bringing Miller Lite and Coors Light under one roof. MillerCoors CEO Leo Kiely, who oversaw Coors before the merger, "will tell you that the No. 1 reason he did that deal at that time was because he wanted to make sure that Coors had more attention through the NFL season than Miller did in Miller/Coors distributors," Mr. England said. Now, he said, "the No. 1 reason that deal was done has actually gone away because we are now MillerCoors."
Mr. England said the value in sports league sponsorships is all about retail activation, such as in-season displays that leverage popular NFL imagery. MillerCoors bowed out because the brewer could no longer get a return on investment with the price tag the league was looking for, Mr. England said. That may be so, but at least one distributor indicated to Ad Age that he was at least a little bit concerned, noting that being able to use the NFL shield on brand-sponsored NFL team schedules posted at bars was a valuable tool.
Mr. England emphasized that MillerCoors still has individual sponsorship deals with 21 of the 32 NFL teams, a point subtly hammered home to distributors with Dallas Cowboys owner Jerry Jones' appearance at the brewer's spring distributor convention in San Antonio last week. MillerCoors "will still be all over NFL broadcasts," Mr. England said. "We have deep relationships with CBS, NBC, Fox, ESPN, all of that."
The brewer is shifting some of the freed-up sponsorship dollars to Mexican soccer teams and leagues and the National Hockey League, with which it recently inked a seven-year exclusive sponsorship deal estimated to be worth $400 million. MillerCoors hopes to take advantage of hockey's cold imagery to push Coors Light, while making the NHL a core part of the branding for Molson Canadian.