SBD/July 13, 2011/Marketing and Sponsorship

NHL, Molson Coors Win Appeal Over Sponsorship; Labatt Indicates It Will Refile

Molson Coors will raise marketing efforts beyond rink boards and ad placements

Molson Coors and the NHL “won a major court ruling Tuesday but the fate” of their $375M North American sponsorship agreement “is still up in the air after archrival Labatt vowed to press on with its legal case,” according to Josh Rubin of the TORONTO STAR. The Court of Appeal for Ontario “rejected a lower court ruling that had tossed out the Molson Coors deal, but allowed Labatt to start its case again from scratch.” Labatt VP/Corporate Affairs Charlie Angelakos said, “Based on the merits of the case we will aggressively pursue all legal remedies available to us.” Marketing consultant and former Labatt VP/Marketing David Kincaid said that “uncertainty caused by Labatt’s decision to refile will hurt broadcasters and other NHL partners.” The Molson Coors sponsorship deal “includes $100 million in guaranteed advertising buys.” Ontario Superior Court Judge Frank Neubold in June “rejected the Molson Coors deal for North American rights, ruling that the league had already sold Canadian rights to Labatt.” The Court of Appeal yesterday “tossed out Neubold’s ruling because it was based on an argument that wasn’t even used -- that Labatt had a legally binding sponsorship agreement.” Labatt had “suggested to Neubold only that they’d agreed to ‘terms of renewal,’ in essence the broad outline of a deal.” The NHL-Molson Coors agreement reportedly included “roughly $100 million in rights fees, $100 million in guaranteed advertising buys, and $100 million in ‘activation’ money for promotions.” By comparison, the Labatt deal was for $36M over three years. Morningstar beverage analyst Philip Gorham said that one reason for the “vast discrepancy is that Molson Coors was on the verge of getting all but shut out of the NHL.” Anheuser-Busch InBev already “holds sponsorship rights to 24 of 30 NHL teams” (TORONTO STAR, 7/13).

MOVING FORWARD: The GLOBE & MAIL's Houpt & Shoalts note Molson Coors “intends to use the sponsorship rights to cement its brand with drinkers on social media and through special NHL events like the Winter Classic and the Stanley Cup playoffs.” Molson Coors Canada Dir of External Communications Adam Moffat said, “We’ll move beyond rink boards and ad placements, curating experiences for beer drinkers and hockey fans.” Labatt indicated that yesterday’s loss in court “was not as bad as it might seem, announcing that it had signed sponsorship deals" with three individual Canadian teams: the Canucks, Flames and Jets. Labatt spokesperson Bob Stellick: “People cheer for leagues a lot less than they cheer for teams” (GLOBE & MAIL, 7/13).

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