MillerCoors sues Patriots football team over sponsorship deal
When is a deal a deal? Oh, that depends. On 26 September 2011 MillerCoors filed a lawsuit against the New England Patriots claiming the team reneged on an exclusive deal and chose to award that deal to its competitor, AB-InBev, instead.
MillerCoors (a joint venture of SABMiller and Molson Coors), which has been a sponsor of the Patriots for nearly ten years, said it negotiated an exclusive beer deal with the team that would begin at the end of this season 2011/12 and run through to 2019.
But after the deal was signed and even commemorated with a dinner organised by the marketing agent working on behalf of MillerCoors and the Patriots sales team, the company says the Patriots decided it was not a valid contract and chose to do the deal, for the same category and time frame of seven years, with AB-InBev.
The suit, which was filed in Massachusetts Superior Court, asks for the exclusive agreement to be deemed valid and enforceable and that the brewer be awarded additional damages to compensate them for costs and good will.
Interestingly, The Patriots’ litigation counsel Dan Goldberg of Bingham McCutchen told media that “since the team never had an agreement with MillerCoors, their decision to file this complaint is, at best, perplexing.”
Football sponsorship deals in the U.S. have been hotly contested between AB-InBev and MillerCoors. From the 2002/03 season to the 2010/11 season, Miller Coors’ Coors Light brand was the official beer of the National Football League (NFL).
However, in 2010 AB-InBev paid a reported USD 1.2 billion (double what its predecessor supposedly paid for the deal) for the rights to get that designation for its Bud Light brand for the next six seasons, starting in 2011/12.
When AB-InBev struck the deal with the NFL, sports insiders already questioned if it was worth it, as the deal comes with too little exclusivity. Bud Light will have the rights to the NFL shield and its marks, including the Super Bowl, but it doesn’t have exclusive rights to team logos – team deals are done separately. Not only that, team alcohol deals are also not exclusive. So the same team can have both Coors and Bud Light as sponsors.
The Patriots, for example, currently have beer deals, for this season, with MillerCoors, AB-InBev and Boston Beer, parent company of Sam Adams.
The AB-InBev-NFL agreement also doesn’t include the rights to use any players. Active players cannot endorse alcohol brands.
People in the U.S. beer business will probably say that signing up with the NFL still makes sense to AB-InBev because it gets all the behind-the-scenes people excited, from sales staff to retailers.
The problem is of course that Bud Light doesn’t exactly have a distribution problem to begin with.
And that gets us back to the teams. Beer drinkers, like any consumer, need to be addressed in a meaningful way. No one roots for the league. No one roots for the Super Bowl. They root for teams and AB-InBev didn’t buy team rights here.
Therefore, many observers thought that buying the NFL is an old age deal. It’s so “inside the box”.
As with all sports sponsorship deals, there is a lot of wishful thinking involved. Not least on the part of the sponsor. Perhaps AB-InBev could have used all that money more wisely, yet there is no denying that they have to tend to their major U.S. seller, the Bud Light brand, which they feel threatened by Coors Light.
While Bud Light has annual sales of USD 5.2 billion, according to Symphony/IRI, a market tracking firm, and Coors Light of only USD 1.9 billion, the smaller brand has grown at more than twice the rate that Bud Light has over the past year to September 2011.
