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Anheuser Swings At Baseball In Sponsorship Lawsuit

Reuters, November 13, 2010

By Jonathan Stempel

NEW YORK – Anheuser-Busch Inc, the largest U.S. brewer, sued Major League Baseball, accusing the league of reneging on an agreement to renew a lucrative and exclusive sponsorship pact it has held for more than 30 years.

The beer battle surfaced as baseball struggles with effects of a weakened economy, including lower television ratings and sponsor defections.

In its complaint filed in U.S. District Court in Manhattan on Friday, Anheuser said it entered a fully signed renewal agreement with baseball in April, and even swapped congratulatory messages with the league about the accord.

But Anheuser said Tim Brosnan, a league executive vice president, demanded a rights fee "several times" higher after the maker of Budweiser and Bud Light in May replaced Coors as official beer sponsor of the National Football League, starting in 2011.

By the fall, Major League Baseball decided it was not bound by the April accord, and could shop Anheuser's rights to rivals, the complaint said.

Anheuser is part of Anheuser-Busch InBev NV. It sponsors 26 of the 30 major league teams, and has naming rights for the St. Louis Cardinals' ballpark in its hometown.

Matt Bourne, a spokesman for Major League Baseball, said the league had not yet been served with the complaint, and its lawyers have not reviewed it.

Julian Green, a spokesman for MillerCoors -- the combined U.S. operations of SABMiller Plc and Molson Coors Brewing Co, and the No. 2 U.S. brewer -- also did not immediately return a call.

"Baseball is trying to make room to negotiate a deal with MillerCoors," said A.J. Maestas, president of Navigate Marketing Inc, a sports research and valuation firm in Chicago.

"Losing the NFL deal increases the motivation for MillerCoors to find another sports sponsorship," Maestas continued. "Baseball is a national platform they can use in the summer, their key selling season."

Anheuser is seeking a court order to enforce the April accord, which it called "clear, unambiguous, binding, and more than fair," and to bar baseball from signing up any malt beverage rival.

Jim Andrews, senior vice president at IEG LLC, a unit of advertising company WPP Plc that tracks sponsorship spending, estimated a $10 million annual value for Anheuser's baseball sponsorship rights.

This excludes the "tens of millions of dollars" that Anheuser said it spends annually on Major League Baseball advertising and promotions.

The case is Anheuser-Busch Inc v. Major League Baseball Properties Inc, U.S. District Court, Southern District of New York, No. 10-08513.