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SBD Global/November 27, 2012/Marketing and Sponsorship

Heineken's John Smith's Beer Pulls Out Of Grand National Sponsorship

Jockey Daryl Jacob celebrates after winning the Grand National on April 14.
British horse racing's Grand National has "joined a growing sporting scramble for corporate cash" after Heineken's John Smith's beer brand said that it would end its title sponsorship of the world famous steeplechase next year, according to Keith Weir of REUTERS. Competition for sponsors' money "is tough in Britain where the economy is stagnating," and major events like the London Olympics and Glasgow 2014 Commonwealth Games have "sucked up some of the money that is available." John Smith's is believed to have spent almost £20M ($32M) on the title sponsorship and related marketing since '05. It now plans to focus its marketing activities on consumers in pubs, clubs and supermarkets to help "counter a declining market for ales" (REUTERS, 11/26).

MOVING ON: The YORKSHIRE POST reported Heineken's "surprise decision" has nothing to do with animal welfare issues and adverse publicity surrounding the steeplechase. Heineken said it wanted to "move on." It will continue to sponsor other races, such as the John Smith's Cup at York, England. John Smith's Brand Manager Karen Crowley said, "The Grand National has been one of the jewels in our U.K. sponsorship crown, and the decision to end the title sponsorship was difficult to make" (YORKSHIRE POST, 11/26). John Smith's spokesperson David Jones said, "We will be exploring ways in which John Smith's can continue to be involved in the three-day meeting, and talks with Aintree [Racecourse] will take place in the coming months" (SCOTSMAN, 11/25).

BAD PUBLICITY? In London, JA McGrath reported that the decision to pull its sponsorship after the '13 event is "not in itself catastrophic, but the timing could not be worse for Aintree." Heineken "clearly feels uncomfortable" about being associated with a sporting event that "has become a target for critical media attention." The mantra of marketing execs once was "any publicity is good publicity," but not if it "concerns the Grand National." Aintree Chair Peter Daresbury insisted on Sunday that John Smith’s "had taken a commercial decision in pulling out, quoting evidence from sources in the brewing trade that the company was making cutbacks." He acknowledged, however, that the "bad publicity" the race had attracted with another two equine deaths this year, and the fact that a change of broadcaster "will almost certainly mean a smaller TV audience," were also probably "factors in the decision" (TELEGRAPH, 11/25).

STAYING ATTRACTIVE: In London, Marcus Townend wrote that Aintree CEO John Baker insists the Grand National is still a "hugely attractive sponsorship opportunity." Baker said: "The Grand National is the one race that transcends the sport. Interest is phenomenal worldwide with 500 million watching it, including 11 million in this country. As a commercial opportunity, it still stands tall" (DAILY MAIL, 11/25).

A MINOR SETBACK: Also in London, Greg Wood opined on the GUARDIAN's The Sport Blog Heineken's decision "appears no more than a minor setback." The track "will find a new sponsor," as it did when cognac manufacturer Martell pulled out nearly a decade ago, and the world's most famous steeplechase "will move on." Whether that new sponsor will invest as much money as John Smith's, however, "is another question." Sponsors "are not charities," though many in racing still seem to treat them as if they are "putting in their cash for purely altruistic reasons." Every pound that a corporate sponsor puts into any sporting event "will be expected to return several times as much in terms of positive publicity and brand awareness as well as increased sales." Each time it is mentioned in a newspaper column and every "fleeting glimpse of their logo on the TV coverage will be assigned a monetary value." If the total return "does not match the sponsor's expectation --  and even four times the initial investment would be considered on the low side -- then the sponsor will find one that does" (GUARDIAN, 11/25).
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