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Marketing and Sponsorship

A-B’s sponsor shocker

Top U.S. sports spender rewrites sponsorship rules with new incentive-based contracts

Anheuser-Busch InBev is changing the sponsorship game, or at least its part of it.

 

Sports properties for years have referred to their sponsors as “partners.” ABI, America’s biggest sports sponsor, is bringing that notion closer to reality, instituting incentive clauses within its deals as they come to term and offering properties as much as a 30 percent bonus if specific on-field performance and marketing criteria are met or surpassed.

Such incentives have existed sporadically in the past, but ABI is believed to be the first major sponsor to make it a standard part of its sponsorship contracts.

“The traditional sponsorship model, based on fees and media commitments, does not deliver the best value for us at a time when most leagues and teams are facing challenges with live attendance and TV ratings,” said Joao Chueiri, ABI’s vice president of consumer connections and the former Nike marketer who has been reshaping the company’s sponsorship model during his first year on the job. “We want to evolve the model and encourage fan engagement … with an awareness that each deal is unique.”

The Cardinals are one of 22 MLB teams with Anheuser-Busch InBev as a partner.getty images

So far, a handful of sports properties have signed incentive-based deals. The Minnesota Timberwolves were first, followed by the Los Angeles Dodgers, New Orleans Saints and NASCAR. The stock car circuit opted for earned media, fan engagement/social media measures, while the Dodgers, after a season in which they won the National League pennant, chose on-field performance indicators, including wins and losses.

All of ABI’s 90 or so U.S. team and league sports sponsorships are up by or in 2021 and the brewer hopes to have completely overhauled its sponsorship model by then. So far, no property that has been asked to accept an incentive-laden model has said no. The good news for properties is that there’s no downside: They won’t get paid less if they fail to meet those targets. ABI also is instituting this new model across its portfolio of arts and entertainment sponsorships.

King of Sports


Anheuser-Busch InBev’s marketing prowess touches all the major sports. Its sponsorships include:


Property (partner since)

 

NFL (2011), 28 teams

NBA (1998), 18 teams

MLB (1980), 22 teams

FIFA (1986)

PGA Tour (1994)

NASCAR (2018), Stewart-Haas Racing

19 NHL teams

12 MLS teams

Approximately 30 NCAA Division I college athletic programs

WNBA (1996), 2 teams

Chueiri said that the key performance indicators for incentives available under ABI’s new sponsorship model include attendance, wins/losses and other on-field performance measures, social media and other fan engagement metrics, and brand awareness and consideration among those aware of the sponsorship. The idea is to motivate the property to ensure every fan knows that Budweiser is the official beer. It also might make a team or league choose ABI, knowing there’s an upside.

ABI’s marketers have been meeting with other large U.S. sports sponsors to share their vision, and it will be interesting to see if a marketer long considered the sugar daddy of American pro sports will be able to affect change across the industry. On the media side, ratings guarantees and “make-goods” are old news. On the sponsorship side, performance-based deals have been discussed for decades, but in a transaction-obsessed business they are still more the exception than the rule.

“Maybe 10 percent of all deals have incentives, and it’s much more typical in NASCAR, where the difference in exposure between winning and losing cars is so huge,” said Mike Reisman, president of sports and entertainment at MKTG, with a client roster that includes heavy sports spenders such as FedEx, Toyota and Wells Fargo. “These kinds of things are increasing, and when a sponsor with the weight of ABI gets behind it, you’d think a lot of other people will.”

Todd Kline, Miami Dolphins senior vice president and chief commercial officer, said his team has stadium sales-based incentives for several food and beverage sponsors. Others are tied to impressions, or if specific jewel events are booked at Hard Rock Stadium.

“Now that tracking and measuring has improved, we’re not averse to these kinds of deals,” Kline said. “Often they’ll be a minimum guarantee structure to which you can then add incentives. The key to making these work is defining success on the front end. You need to decide on not only what you are going to measure, but who’s going to measure it and how.”

“There’s been a lot of talk about sponsorship and partnership in this industry forever,” said Tim McGhee, senior vice president at CSE, with clients including AT&T, Aflac and Coke. “Each has a specific definition, but to get to the point where they really merge, it’s going to take a big, big player like A-B InBev to do it. Then it’s a question of how much risk tolerance either side has.”

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