SBD/Issue 46/Sponsorships, Advertising & Marketing

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  • Anheuser-Busch Sues MLB For Reneging On Sponsorship Deal

    A-B Has Been The Official Beer
    Of MLB For More Than 30 Years

    Anheuser-Busch has sued MLB, "claiming that baseball's licensing arm reneged on a multiyear renewal of the company's beer-sponsorship rights and demanded 'exponentially higher' fees," according to Bray & Kesmodel of the WALL STREET JOURNAL. A-B in a suit filed Friday in federal court in Manhattan claims that MLB Properties "agreed to renew its rights to be the league's official beer sponsor in April but then demanded to renegotiate the pact" after the brewer announced a deal in May with the NFL. The brewer, which has sponsored MLB for more than 30 years and is the official beer sponsor for 26 teams, is "seeking a court order stating that the April agreement is valid and that any negotiations with another beer maker would interfere with its exclusive sponsorship rights." A-B contends that it "reached a letter agreement in April to renew its sponsorship deal with MLB," and that "all that was left was the ministerial step of drafting a long-form contract." But the lawsuit argues that "after the NFL deal was announced, MLB Properties began to complain that the economic terms of the renewal were no longer satisfactory and that the market had changed." It also alleges that MLB Properties demanded on May 27 that A-B "agree to pay much higher fees to remain the official sponsor." MLB Properties last month reportedly notified A-B that it "planned to offer the sponsorship rights to the company's competitors." In a similar case, Bray & Kesmodel noted when FIFA in '06 "awarded an eight-year sponsorship deal" to Visa for the World Cup, MasterCard sued soccer's governing body, claiming that it "had the right of first refusal after a 16-year World Cup relationship." FIFA "settled the dispute" for $90M in '07 (WALL STREET JOURNAL, 11/13). MLB issued a statement stating, "Major League Baseball Properties hasn’t been served with the complaint and our lawyers have yet to review it. We don’t normally discuss active litigation however we have a different view of what has been reported" (THE DAILY).

    BUYER'S REMORSE? In N.Y., Richard Sandomir noted the lawsuit claims soon after A-B reached a deal for its Bud Light brand to sponsor the NFL, MLB Exec VP/Business Tim Brosnan "began to complain that the economic terms of the April renewal agreement were no longer satisfactory and that the market had changed." The suit claims Brosnan then demanded A-B pay "several times" more than had been negotiated. On Oct. 1, Brosnan informed A-B President Dave Peacock that MLB was "going to disavow" the April deal. A week later, the brewer "sent letters to some of its domestic competitors informing them that it would defend its rights should any of them negotiate a deal" with MLB. A-B is asking the court to "declare the April agreement valid and enforceable, and to prohibit baseball from negotiating with another brewer." The lawsuit does not involve Budweiser's 26 team sponsorships (N.Y. TIMES, 11/13). A-B InBev VP/Marketing Keith Levy in a statement said, "A timely resolution is important" (ST. LOUIS POST-DISPATCH, 11/13). FANHOUSE.com's Josh Alper wrote no matter the "legal ins and outs of the case, it's safe to say that the two sides will find some way" to come to terms on a new agreement. There is a "lot of money to be made by selling beer at baseball games and companies with a long history of doing business tend not to let much get in the way of that." Alper added, "Should this truly be doomsday, however, it's probably a good bet that MillerCoors will take the money they no longer have to spend on football and make themselves the sponsor of 'Thirst Innings' all over this proud country" (FANHOUSE.com, 11/12).

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  • Puerto Rico Tourism To Sponsor PGA Tour Event On Island

     

    The Puerto Rico Tourism Co. has agreed to sponsor the PGA Tour event in the U.S. territory for the next two seasons. The Puerto Rico Open presented by SeePuertoRico.com will be the new name of the tournament, which previously was sponsored by Banco Popular. The financial services company with a strong presence in Latin America and the Caribbean will remain a significant tournament sponsor, the tour said. The Puerto Rico Open will be played in March the next two years as an opposite-field event. It is held the same week as the WGC event at the TPC Blue Monster course at Doral. Title sponsorships for opposite-field events typically sell for $2-4M a year. Puerto Rico Tourism Exec Dir Mario Gonzalez Lafuente said the sponsorship will provide global exposure and advertising. The event is televised by Golf Channel. “This is an important and extremely cost-effective investment for the island,” said Lafuente, who added that the tournament generates revenue from 6,000 hotel room nights.

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  • Schutt Protests Against NFL Players Wearing Riddell Chinstraps

    Riddell Only Name That Can Be
    Displayed On Players' Chinstraps

    Legal representatives of helmet manufacturer Schutt sent a letter to the NFL last week telling Commissioner Roger Goodell "to immediately end deceptive practices on the branding of helmet chin straps," according to Darren Rovell of CNBC. Riddell "has owned the exclusive rights to brand NFL helmets with its logo since the mid 1980s," and though no helmets are "allowed to display the words 'Schutt' on it, players are permitted to wear any company's helmet on the field." As a result, Schutt officials are "concerned about the practice of branding its helmet with Riddell chinstraps." The officials said that they "know Riddell has a deal with the league, but believe players wearing Schutt helmets while wearing Riddell branded chinstraps is 'misleading' and 'deceptive.'" Schutt Marketing Communications Manager Glenn Beckmann indicated that "more than 30 percent of NFL players are wearing Schutt," including Giants QB Eli Manning, Colts WR Austin Collie, Eagles WR DeSean Jackson and Titans RB Chris Johnson. Rovell noted tensions are "high between the two companies since Riddell sued Schutt, claiming that two of Schutt's helmets were patent infringements on its concussion-reducing technology." A federal court in Wisconsin in August "returned a $29 million verdict in favor of Riddell." Meanwhile, Beckmann said that "on-the-field branding isn't the most valuable part of Riddell's longstanding deal with the league." Beckmann: "Riddell pays off its payment to the NFL each year thanks to sales of mini helmets to collectors. We aren't allowed to make those" (CNBC.com, 11/12).

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  • Chevrolet Returning To IndyCar Series Beginning With '12 Season

    Chevrolet Will Offer A Twin-Turbocharged
    Direct-Injected V6 Engine For IndyCar Series 

    Chevrolet is "returning to the Izod IndyCar Series, with participation beginning in 2012 when the series' new equipment formula debuts," according to Curt Cavin of the INDIANAPOLIS STAR. Chevrolet, which last competed in IndyCar in '05, "will offer a twin-turbocharged direct-injected V6 engine." The manufacturer will have Penske Racing "as its top team," though IndyCar Project Manager Tony Cotman "vowed to make sure manufacturers don't play favorites." Chevrolet was "motivated at least in part by a recent 40 percent jump in TV ratings among males ages 18-34." Team owner Roger Penske "expects an invigoration of Indy-car racing as a result" of Chevrolet's return. Cavin noted Chevrolet comes with a "marketing arm that will give Honda a partner with which to spar, on and off the racetrack." Meanwhile, Fiat is "among the companies that have shown interest" in joining Honda and Chevy, "perhaps with its Ferrari or Dodge brands." But "at a minimum, additional sponsors figure to join the 14 that IndyCar has signed" since Randy Bernard became CEO in February. The turnout at Friday's announcement was "easily more star-studded than the controversial new-car unveiling in July at the Indianapolis Museum of Art" (INDIANAPOLIS STAR, 11/13). GM VP/Performance Vehicles & Motorsports Jim Campbell: "Where we're headed in 2012 with this engine is directly in line with where we need to be in the marketplace" (DETROIT FREE PRESS, 11/13).

    MAN WITH A PLAN: SI.com's Bruce Martin wrote Friday's announcement was the "latest validation that Bernard is a man fully prepared and capable of leading the Izod IndyCar Series back to prominence." Bernard said Friday, "This is a fantastic day for us because it's an American engine manufacturer with a great heritage like Chevrolet. But we still have a lot of seats to sell, ratings to increase. We need a great marketing plan and need to help Honda and Chevy capitalize on selling cars" (SI.com, 11/12).

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  • Marketplace Roundup

    ESPN.com's Adam Schefter reported Randy Moss' moves from the Patriots to the Vikings and now the Titans have "been a boon" for the WR and for Reebok, "and a bust for local sporting good stores in New England and Minnesota." A source indicated that sporting goods retailers are "expected to lose hundreds of thousands of dollars on unsold Patriot and Viking Moss jerseys while Reebok already has been paid for the jerseys and Moss is assured of collecting about $500,000 worth of royalties." Reebok now will "make and ship new Moss No. 84 Titans jerseys for which the company and the wide receiver will make even more" (ESPN.com, 11/14).

    NBA Files For Trademark Rights To
    The "Fear The Deer" Catchphrase

    DEER HUNTER: In Milwaukee, Don Walker reported the NBA late last season, "at the request of the Bucks, filed for trademark rights" to the "Fear the Deer" catchphrase with the U.S. Patent Office. NBA Senior VP/Marketing Communications Mike Bass said that the application is pending (JSONLINE.com, 11/12). YAHOO SPORTS' Eric Freeman noted the NBA "is a corporation, and corporations like to make money, so this shouldn't come as much of a surprise." But he added, "There seems something perverse about turning a fan rallying cry into a corporate slogan. Bucks home games are special because they actually seem to belong to the fans rather than the advertising sponsors" (SPORTS.YAHOO.com, 11/12).

    NOT THE TICKET: In Boston, Jay Fitzgerald reported Boston-based Danvers Bank "yanked a Boston Bruins tickets promotion off its Facebook page" on Friday after the Boston Herald "made inquiries about whether it violated" Facebook and NHL rules. Danvers, which has been "running a number of giveaways on its Facebook page in recent months," was urging followers to "qualify to win two Bruins tickets if they clicked that they 'like' the bank." But Facebook "requires prior permission to run many types of prize games or sweepstakes," and the Bruins "also limit such ticket promotions." Danvers CFO Mark Panella said, "My guess (the tickets promotion) will be down permanently" (BOSTON HERALD, 11/13).

    ROUNDUP: YAHOO SPORTS' Greg Wyshynski noted Blackhawks RW Patrick Kane and LW Jonathan Toews are "in a new commercial for the Dell Streak, a smart-phone 'tablet' that's clearly being pitched to the young, the single and the horny." The online spot is "presented almost like a nature special: Two players are on the prowl, while a narrator describes the action" (SPORTS.YAHOO.com, 11/14)....Antivirus and Internet security company Kaspersky Lab has signed a "two-year deal to sponsor" the Scuderia Ferrari F1 racing team, "with its logo adorning the cars next year" (THENATIONAL.ae, 11/14).

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