SBJ/July 31-August 6, 2017/Colleges

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  • Colleges chug beer dollars

    The wall that used to exist between beer marketers and college sports has crumbled under the weight of the schools’ need for more revenue and an enhanced game experience.

    Colleges are pouring beer at their games, they’re advertising beer on their in-stadium signage and media, they’re licensing their marks to beer companies, and they’re cashing checks from Anheuser-Busch InBev, MillerCoors and even imports like Dos Equis and Corona, making big-time college football a fresh, fertile battleground for big-spending beer companies.

    College events used to be off-limits for beer marketers because of the underage audience on campus. Schools didn’t want to look like they were condoning alcohol consumption, so they worked with beer sponsors to create messaging around “drinking responsibly.” That approach has helped the beer companies, especially the two giants in the category, find a comfort level with the schools they sponsor. ABI now owns the marketing rights at close to 60 colleges, where its Bud Light brand is typically promoted. At the 40 schools where MillerCoors has bought marketing rights in the last five years, the company mostly hawks the Coors Light brand.

    Anheuser-Busch InBev’s Bud Light has partnered with Texas A&M.
    Elsewhere, Dos Equis, which had been relatively sports shy as a sponsor, two years ago became an official partner of the College Football Playoff, where annual sponsorships can climb into the high seven to low eight figure range. And Corona just bought a sponsorship deal at the University of Texas for the low seven figures annually.

    In all, the number of school marks and intellectual property used in beer marketing are at an all-time high, industry experts say, as is the media spend by beer brands on college football.

    “The level of comfort is getting a little bit more, school by school, every year,” said Nick Kelly, senior director of experiential marketing at ABI. “I don’t think we are ever going to see one fell swoop where every school opts in, but more and more are.”

    It’s not just the marketing that’s changing. SportsBusiness Journal research counts 36 colleges that will sell beer in their on-campus stadiums, and another 14 more that pour at off-campus venues.

    First Look podcast, with beer discussion beginning at the 8:40 mark:





    Another indication that beer is seeping deeper into the culture of college events: The NCAA will start making beer available at more of its championships. The normally conservative governing body of college sports already sells beer at its baseball, softball, football and lacrosse championships. Wrestling, volleyball and ice hockey are likely next by 2018, and it’s just a matter of time before beer is being sold at every round of the men’s and women’s basketball tournaments.

    “Ultimately, and I mean sooner than later, the vast majority of schools will sell beer in their concessions,” said veteran collegiate marketer Rick Jones of Charleston, S.C.-based FishBait Marketing, whose clients include Capital One and the Atlantic Coast Conference. “TV money and a lot of the other collegiate revenues are flat. Schools are looking for new revenue and [beer at concession stands] will be a significant new giant income stream.”

    ° ° ° ° °
    The revenue from beer sales is one obvious attraction for schools to pour. Texas, which began selling beer in its stadium in 2015, reported $3.1 million in revenue and $1.3 million in profit from the 2016 season.

    The University of Texas has split the category with Corona and MillerCoors.
    “It’s the inevitability of the profitability, which is extraordinary,” said Bryce McTavish, executive vice president of customer solutions at Madden Communications and a former MillerCoors executive. “You buy a keg for $75 and sell it for $1,400.”

    But it’s not just a financial issue. It’s also a matter of getting fans to the game and keeping them there at a time when college football attendance is sagging. The average FBS crowd of 43,106 during the 2016 season marked the sixth straight year on the decline.

    Selling beer in-venue is considered by many administrators as a way of providing a better fan experience, or at least an experience that will keep them inside the stadium longer.

    “Beer is naturally part of the game-day experience, whether you’re on premise or at home,” said Adam Dettman, MillerCoors’ director of sports and entertainment marketing. “Schools have never been under more pressure, both from the revenue side and the fan experience. How do you motivate fans to come to the games? How can we help educate them on that?”

    Just look at Texas and Texas A&M, a pair of schools that each have more than 100,000 seats to fill on game day.

    It’s no wonder the Longhorns earlier this month split their beer category so their rights holder, IMG College, could sell a domestic deal to MillerCoors and an import deal to Corona in a combination of agreements worth close to $5 million annually. Corona’s rights at Texas include on-site activation, customized beer tap handles and glass pints combining the logos of the Longhorns and the beer.

    “This wasn’t as much about college sports as it was having a platform for a region where we are growing by double digits,” said John Alvarado, Constellation Brands’ vice president of brand marketing for Corona.

    But it was another sign that college football is attracting the attention of domestics and imports.

    “What was a second-tier category for us is now a top-10 category,” Andrew Judelson, IMG College’s executive vice president of sales and marketing, said of beer.

    For Texas, the school liked the affiliation with the Mexican brand, which is the best-selling import in the U.S. Latinos represent 39 percent of the population in Texas, which has the second-most Hispanics of any state, behind only California.

    “Think about where we live,” said Chris Plonsky, the Longhorns’ athletic director for women’s sports and chief marketer for athletics. “It seems like a natural progression. The brand fits nicely, and it will have a presence across all of our sports where we can market to the Hispanic community. I think we can also learn a lot about the way this brand markets.”

    Down the road in College Station, Texas A&M’s rights holder, Learfield, renewed with ABI last year for significantly more rights and more money. Their previous arrangement was good for media only, but the renewal is much more integrated, including naming rights for the Bud Light brand to premium spaces inside the football and baseball stadiums.

    Dos Equis became the CFP’s official beer in 2015.
    In fact, the press release announcing A&M’s renewal specifically noted that the new package of rights was designed to mirror ABI’s sponsorships with pro teams.

    So far, there doesn’t appear to be much appetite from ABI and MillerCoors to put college marks on primary packaging — cans and bottles — even though some of their contracts now include the rights. Bud Light was stung in 2009 when the brand used school colors from 27 colleges, without logos, on Bud Light cans. It prompted immediate objections from the schools and the “Fan Cans” were pulled off the shelves before the end of the first season.

    “The revenue [imperatives] are clear, but the game experience is also important here,” said Dan Donnelly, the former director of national broadcast for Anheuser-Busch, who’s now executive vice president and managing director of Publicis Sports, which helped negotiate Dos Equis’ CFP sponsorship with ESPN, the CFP rights holder. “If you are used to going to a professional sporting event, and having beer responsibly is part of that, then the college environment is at a disadvantage.”

    The quest for new revenue is not limited to college campuses. Broadcast rights holders, such as ESPN, which committed $7.3 billion over 12 years to the CFP and its New Year’s Six bowl games, need to monetize those deals as well. Thus, the catalyst for sponsorships like the Dos Equis deal.

    “You’ve got schools doing this now and the more that do, the more comfortable it seems with the general public,” said ESPN’s Nick Dawson, vice president of programming and acquisitions.

    ° ° ° ° °
    Purdue is one of the three new schools, along with Wyoming and Marshall, that will start selling beer inside its football stadium this season. Interestingly enough, Purdue also is one of the remaining schools, like North Carolina, North Carolina State, Stanford, Wisconsin and Penn State, that does not accept beer sponsorship or advertising.

    So, Purdue will sell beer, but it won’t permit its rights holder, Learfield, to sell beer sponsorships, an arrangement that several in the industry found curious.

    “We need to give people more of a reason to come to the games in addition, of course, to winning,” said Tom Schott, Purdue’s longtime communications chief. The Boilermakers haven’t been to a bowl since the 2012 season and it was 2000 when Purdue last won the Big Ten. “We’re not even sure what the revenue will be, but [beer] is an amenity we can provide.”

    The marketing affiliation between beer and college athletics isn’t just an issue at the highest levels of the power five conferences. It’s a conversation at schools of every size.

    If they don’t sell beer at their own concessions, that’s now under discussion. If they don’t permit breweries to use college logos and names to market beer, that too is increasingly under consideration.

    “I’ve seen more activity in the category in the last two years than in the previous 10,” said Roy Seinfeld, Learfield’s executive vice president of national sales. “We still run into some resistance every year, but dominoes are falling and things are loosening up.”

    Bob Dittrich, vice president at Genesco Sports Enterprises, works with MillerCoors on its college program. He’s seen the tide turn over the last five years since MillerCoors entered the college space.

    “Schools that five years ago were saying they’re not interested are now saying, ‘We’re interested, what can we get?’ It’s been a gradual thaw,” Dittrich said.

    At least four schools — Colorado State, LSU, Louisiana-Lafayette and Tulane — license their marks to local brewers, who use a school logo on its labels, packaging and marketing (see related story). Tulane is the most recent. It sold its “Angry Wave” athletics logo to NOLA Brewing Co. for use on a new product: Green Wave Beer.

    The private school in New Orleans, which is represented by IMG College, already had a sponsorship deal with Crescent Crown distributors. That arrangement provided Tulane marketing rights to Yuengling, Dos Equis and NOLA, through the distributor, so NOLA was already invested as a sponsor.

    But just below the surface with every beer sponsorship, even with the requisite “drink responsibly” and “21 means 21” messaging, is the controversial topic of underage drinking and whether beer marketing at a college football game is appropriate, given the on-campus issues with binge drinking and alcohol abuse. The “drink responsibly” tags carry a much higher profile in the brewers’ collegiate marketing deals than their pro sports sponsorships.

    “There are definitely more schools open to discussing the beer category, but the messaging has to be more overtly about drinking responsibly than with other properties,” said Dan Parise, vice president and managing director at Scout Sports & Entertainment, which counts Corona among its clients.

    Louisiana Rep. Cedric Glover publicly objected earlier this year to the association between some of the state’s colleges and beer sponsors.

    “This is wrong,” Glover told Louisiana media. “Why would we have wanted to officially license and brand an alcoholic beverage to a school?”

    Officials at the University of Connecticut experienced pushback in 2014 when an outdoor billboard promoting Coors Light appeared with a Huskies logo and the phrase “Huskies love the cold.” UConn President Susan Herbst answered the backlash from fans by having the billboard removed, saying in a statement: “UConn cannot appear to endorse drinking among our students.”

    That same year, the University of Illinois had similar billboards removed, saying that it was OK for the Coors Light brand to be used with Fighting Illini marks at retail, but not on billboards.

    “It’s the money, period,” said Todd Turner, a former athletic director at UConn in the late 1980s and other schools before becoming a college consultant. “It doesn’t matter if it’s the right thing or the wrong thing anymore. It’s all about the revenue.

    “Schools avoided it historically because it didn’t fit the culture on campus, especially with all of the drinking issues, but money has flipped all that. College administrators are drawn into competing for the marketing dollars. It shouldn’t be that way, but it’s the world we live in today.”

    ° ° ° ° °
    College policies regarding beer marketing vary as widely as one campus differs from another. ABI’s deal with Florida State gets it access to the Seminole Radio Network logo. Just 150 miles away at the University of Florida in Gainesville, the school’s Gators logo is available, but not for retail use.

    “We’ve got 60 colleges and they all offer something different,” ABI’s Kelly said.

    Texas’ beer deals are worth close to $5 million annually.
    With the rise in beer marketing has come a level of inconsistency and, sometimes, hypocrisy as schools and conferences try to figure out how much to regulate it. Where there’s a restriction on beer sales or marketing at a college facility, there’s often a contradiction nearby.

    The SEC has been adamant about not selling any alcoholic beverages at its athletic venues, but the conference does allow it in club seats and suites, at least one of which is sponsored by a spirits brand — Woodford Reserve Club at Kentucky’s Kroger Field. Other schools, such as LSU and Missouri, have experimented with selling beer within beer gardens just outside the stadium, which enables them to rake in the revenue while staying within the bounds of the conference rules.

    Many schools see beer sales they can control as a better alternative to the binge drinking in the parking lot before the game or at halftime. There are still many schools that permit “pass-outs,” which allow fans to exit the stadium and then return after presumably going to the car to reload on drinks. Allowing sales inside the venue is believed to be a more effective way of managing alcohol consumption and curbing binge drinking, an outcome that West Virginia touted when it started selling beer inside its football stadium six years ago.

    Mike Aresco, commissioner of the American Athletic, said his conference sells beer at its football championship.

    “More schools are saying ‘yes’ to beer sales, and revenue is clearly an issue,” Aresco said. “But there’s also a feeling that you can manage it better if you sell beer at your stadium with various safeguards, rather than have people drink outside, come back in, and then run out at halftime.”

    On the marketing side, beer sponsors typically operate under a set of guidelines that dictate how the school’s brand is presented.

    At California, beer brands must refer to their relationship with the school as sponsor, not partner. Cal’s marks can be used at bars, grocery stores and restaurants, but not on billboards. The Golden Bears’ marks must be spaced out from the beer’s logo by certain distances. And the school always has veto power.

    Other schools are not as persnickety. Oregon State, for example, has a fermentation science major that feeds a number of its graduates into the rich craft beer industry in the Pacific Northwest. The Beavers not only have a deal with MillerCoors, they also have an agreement with Columbia Distributing, which distributes several of the area’s craft brews. Inside the football stadium, Oregon State has established beer and wine festival areas in each end zone, providing a place where fans can watch the game while having an alcoholic beverage. It’s part of the school’s effort to appeal to younger adult fans.

    “We’re resetting the norm in this category,” said Zack Lassiter, Oregon State’s deputy AD for external operations. “Whether it’s beer sales in the stadium or beer sponsorships or tailgating, I think we’re at a transitional time right now. As we move forward to the next stage of this, there will be new norms in this category.”

    Looking down the road, most industry experts think it’s inevitable that colleges will continue to embrace beer sales and marketing. After all, the urgency to generate revenue isn’t going to dissipate as rising coaching salaries and expensive facility projects top the AD’s to-do list.

    But with those expectations of sponsorship revenue come expectations from the buyer’s side as well. Pretty soon, there may not be much of a wall left between college sports and beer marketing.

    “We’re very cognizant of the price increases for some of these college deals,” said ABI’s Kelly, citing the Texas/Corona sponsorship. “But we’ll have to see. If they want NFL money, they’re going to have to start getting more comfortable with selling NFL-type assets.”


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  • Cajun country brings burst to licensed brews

    In Louisiana, where gastronomy is high art, the marketing of beer with colleges is the nation’s frothiest. At least three Louisiana institutions of higher learning license their intellectual property to local brewers.

    New Orleans’ NOLA Brewing is producing a wheat beer for Tulane University. Starting next month, Green Wave beer will be sold on tap at the school’s home football games and through local retailers in cans bearing the school’s “Angry Wave” logo.

    IMG College — its multimedia rights and licensing divisions — brokered the deal, which includes an official beer designation.

    The University of Louisiana at Lafayette has sold beer at home football games since 2009, making the school one of the first to offer alcohol in its venue. In 2015, Bayou Teche Brewing of Arnaudville, La., launched a new brew at a ULL home game — Ragin’ Cajuns Genuine Louisiana Ale.

    Louisiana-Lafayette has Ragin’ Cajuns.
    Tulane has NOLA Brewing’s Green Wave beer.
    The 17,500-student ULL claims the brew, poured at home games and sold at retailers in Louisiana and Texas, was the first beer licensed by a college. The school, using its athletic nickname, Ragin’ Cajuns, created an alternative mark to use on the beer’s labeling.

    “It’s not exactly the university logo or our athletics logo because we didn’t want people to think you had to be one of our fans or alums to drink the beer,” said Aaron Martin, the school’s chief communications officer.

    The school collects a 12 percent royalty off sales, just like it would hats and T-shirts, resulting in net revenue in the mid-five figures from beer sales, the school said. The brewer came out with a lager beer last year that carries the same Ragin’ Cajun beer marks.

    “It hasn’t been a problem,” Martin said. “In fact, we’ve heard from dozens of other schools that are looking into this and asking questions. It’s become one of our top revenue producers [in licensing].”

    ULL also has licensed its IP on seasonings, coffee and a hamburger at local Sonic restaurants.

    Not to be outdone, LSU licensed Tin Roof Brewing in its hometown of Baton Rouge to produce Bayou Bengal Lager last year.

    All of this sudsy activity fermented some local political unrest.

    Louisiana Rep. Cedric Glover of Shreveport proposed a bill earlier this year that would have banned state schools (Tulane is private) from licensing alcoholic beverages. However, the bill never got out of committee and was withdrawn in May.

    “[Beer] can be a very lucrative category,” said Nathan Hubbell, IMG’s general manager on the Tulane property. “You have to do the legwork, communicate across campus and know your culture so that every party is comfortable.”

    Outside of the state, Colorado State has been a trendsetter by using its Ram logo on cans and bottles of Old Aggie Superior Lager, a brew produced by New Belgium Brewing Co., which like the school is based in Fort Collins. Colorado State’s share of the proceeds from Old Aggie sales will go to the school’s Fermentation Science and Technology Program, an alcohol awareness program, and the athletic department.


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  • College football beer spending doubled in ’16

    Beer spending on college football broadcasts remains a fragment — 2.6 percent — of the overall spend, but it’s increasing at a rapid pace.

    The $35.8 million spent by beermakers against college football last year represented a growth rate of more than 100 percent, according to SportsBusiness Journal research of iSpot.tv data. Overall spending against college football grew at half that rate (see data below).

    Not surprisingly, Coors Light’s spending on college football was first, just ahead of Bud Light. Notably, Heineken USA brands Dos Equis, Heineken, Heineken Light and Tecate all ranked among the top-10 beer spenders.

    “College is the next evolution,” said Mike Sundet, who spent nearly 20 years as an Anheuser-Busch marketer, last serving as vice president of sports and entertainment marketing and advertising services, before joining Momentum Worldwide in 2015 as senior vice president of sports and entertainment. “For some of the brands, the college space has been kind of a black box. Now, they’re starting to figure it out, so beer competition is just going to get more heated there.”

    Category pressures in the $37 billion domestic beer market also are fueling the industry’s collegiate push. A decade ago there were 1,500 brewers in the U.S.; now there are more than 5,000.

    “The beer category is at a real crossroads,” said Andrew Judelson, IMG College’s executive vice president of sales and marketing. “All you have to do is look at all the tap handles out there. It’s a dynamic time.”

    As the beer market has become more fragmented, national and regional craft brews have increased their marketing spend. Subsequently, Anheuser-Busch InBev and MillerCoors have ratcheted up their advertising and marketing budgets, and acquired some of the smaller regional brands.

    With that backdrop, and colleges and conferences acting more like pro sports properties, some even with their own networks, “there’s been more activity than ever,” said Peter Stern, whose New York agency, Strategic, has been handling Labatt’s sports marketing for more than a decade and is the brand’s sports agency of record.

    “In the beer category, big platforms get locked up quickly and for a long time,” Stern said. “That’s why you see brands like Dos Equis and Corona jumping on these deals.”

    While campus venues pour and beer marketers push for school intellectual property rights, regulations will keep it from ever rivaling autos and wireless as a college sports advertiser. Most national TV agreements limit beer or wine ads to 60 seconds per hour.

    Anheuser-Busch InBev and MillerCoors, for example, are significant spenders during the NCAA’s March Madness on Turner and CBS, but their advertising time is limited to a certain number of spots during the tournament.



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