SBJ/20090316/This Week's News

Will slump drive NFL to drink?

A proposal to alter NFL regulations to allow liquor and lottery sponsorships is expected to be on the agenda for the NFL owners meeting that starts Sunday in Dana Point, Calif.

The plan to permit liquor and lottery marketing was approved by the NFL business ventures committee in an early March meeting. It has been in committee before, said an NFL team source. That the proposal made it out of committee and will be in front of all of ownership should indicate that it has some momentum.

A recession that has made new sponsorship revenue scarce for the NFL and its clubs and the relaxation of similar rules by other large U.S. sports properties are among the factors leading the NFL to consider legitimizing marketing around the gambling and hard liquor categories.

The NBA was the most recent league to allow its clubs to mix team marks with spirits brands (see SportsBusiness Journal, March 9-15, 2009) at retail, in ads and on camera-visible signage. If the NFL allows co-branded spirits marketing, it is expected to take the same course as other leagues and not allow direct designations, like the “official Scotch whisky of the Green Bay Packers,” along with requiring a heavy social responsibility message.

“There’s definitely opportunity,” said Kevin Rochlitz, vice president of national sales and partnerships for the Baltimore Ravens, who already have Jack Daniel’s, Stolichnaya and Bacardi-branded taverns at their home M&T Bank Stadium. “Using [team] marks at retail to drive sales would be a whole different piece of real estate for us, if we can get it.”

Not lost on observers is the fact that Mark Waller, the NFL senior vice president of sales and marketing, was a Diageo marketer for 17 years. Waller was executive vice president of marketing when the spirits company broke NASCAR’s ban on liquor advertising with Crown Royal and other spirits brands in 2005.

The other major U.S. sports leagues
all permit league and team marks
on lottery tickets.

“The NFL is the beast in American sports, so of course there’s a huge opportunity for spirits to attach themselves to their popularity,” said Zak Brown, founder and CEO of Just Marketing International, which helped bring Diageo into NASCAR.

If spirits are an opportunity, NFL-branded lotteries would be an outright windfall for the league at a time when it and other sports properties are struggling to generate new revenue.

The other four big U.S. sports now all permit lotteries in which tickets and marketing employ league and team marks. The NBA has allowed them since 2001, the NHL since 2003 and NASCAR since 2004. MLB has allowed licensed lotteries since 2006 and most of the league’s teams will have their logos on lottery tickets during the coming season.

One source said MLB and its teams have realized more than $12 million in the first three years of their deal with MDI/Scientific Games, the Atlanta-based company that had done lotteries using NASCAR driver images on tickets since 1997, and signed deals with the NBA, NHL  and NASCAR, along with some golfers. Two years ago, a Scientific Games executive said an NFL license could double his company’s sales. Since lotteries are among the biggest advertising spenders inside their state lines, adding an NFL club lottery or even a nationwide Super Bowl lottery administered by the league could generate millions in incremental revenue for the NFL and its rights holders.

Politically, the league is stepping into a  minefield, said one marketer involved in the process. On the liquor side, the NFL and its clubs risk offending breweries, which are traditionally among their biggest sponsors. Beer marketers have long argued that opening sports to liquor marketers could lead to an outright ban of beer and liquor associations with sports leagues by Congress. And would the same league that won’t allow Las Vegas to advertise on the Super Bowl and successfully lobbied for a bill that banned online gambling appear hypocritical if it allowed its marks to be used in state lotteries? NFL ownership must sort through those issues and decide starting this week.

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