SBD/June 6, 2011/Marketing and Sponsorship

Judge Rules NHL-MillerCoors Deal Violated Previous Deal With Labatt's

Canadian judge rules in Labatt's favor in dispute over NHL's lucrative beer deal
The NHL's seven-year, $375M deal with MillerCoors in the U.S. and Molson Coors in Canada, the "most lucrative sponsorship deal in NHL history," has been "put in doubt after an Ontario judge ruled in favour of Labatt's claim that the League reneged on its deal with the beer company," according to Darren Calabrese of the CP. The Ontario Superior Court ruled Friday "in favour of Labatt's accusation that it already had an agreement in place with the NHL" before the league reached its deals with Coors. Anheuser-Busch is Labatt's parent company, and Labatt VP/Corporate Affairs Charlie Angelakos said, "Budweiser and hockey are a natural fit. We look forward to a very productive relationship with the league through the 2013-14 season, and are actively looking for opportunities on a team and grass-roots level to reinforce that connection." The CP noted A-B already is "the sponsor for 22 of the 24 teams" based in the U.S. (CP, 6/3). In Toronto, Josh Rubin noted Ontario Superior Court Justice Frank Newbould "shot down Molson-Coors' suggestions that it was blameless." Newbould said that Molson Coors "suspected that the league had already reached a deal with Labatt when it decided to negotiate its own agreement." Molson Coors said that it was "considering its options" in the wake of the decision. Molson Coors Canada Chief Public Affairs Officer Ferg Devins: "We've received the decision and counsel is reviewing it to determine whether or not we'll appeal" (TORONTO STAR, 6/4). ESPN.com's Pierre LeBrun reported the NHL "was very confident in its case," and it "will appeal the court's decision" (ESPN.com, 6/4).

NOT A REPUTATION YOU WANT: NHL Deputy Commissioner Bill Daly Saturday said, "We obviously do not agree with the reasoning or holding of the Court, and we plan to pursue an appeal expeditiously." In Toronto, Damien Cox wrote NHL Commissioner Gary Bettman "had to have been stunned to learn of" the ruling. An allegation of "double-dealing from a court" is "not the kind of business profile a league wants." The ruling "quoted an internal Miller-Coors email saying the company entered into talks with the NHL 'with great suspicion' over a possible existing deal with Labatt, and sought indemnities from the league in the event of legal action by Labatt." The rejected Miller-Coors deal "not only robs the NHL of revenue but also draws into question the league's management." An industry analyst said, "It's very embarrassing. Basically, they were trying to sell the same property twice and got caught." Cox wrote, "All in all, not good for the NHL. Even if there is a successful appeal, Friday's judgment creates a bad smell at a time when the Bettman administration clearly believes it has really hit its business stride, just six years after the last lockout threatened to damage the league's business" (TORONTO STAR, 6/5).
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