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MillerCoors sacks NFL sponsorship

Crain Communications, Inc., May 04, 2010

By  David Sterrett

(Crain’s) — Coors Light’s nine-year run as the official beer of the NFL is about to end.

Chicago-based MillerCoors LLC sent a memo to distributors saying the company has decided not to renew its sponsorship after its current deal expires following the 2010-11 season.

The memo says MillerCoors and the NFL couldn’t “reach an agreement about the value of the league sponsorship” after extensive talks.

Although the company never disclosed what it spends on the sponsorship, an industry watcher values the deal at about $500 million.

MillerCoors says it will continue to be active in the NFL with team alliances and media buys. Not being the official sponsor will “free up dollars to activate more powerfully on a number of sports and entertainment platforms,” the brewer says.

Marc Ganis, a Chicago-based sports marketing consultant, believes Anheuser-Busch and the NFL have reached a deal to name the brewer the new official sponsor.

Mr. Ganis says the NFL was looking for the new sponsor to pay at least twice as Coors Light. Anheuser-Busch has sponsored the NFL in the past.

“Coors Light is going to have to come up with a different marketing theme,” says Mr. Ganis, who estimates that the brand spent about $135 million a year on national and local sponsorships and advertising relating to the NFL.

Jim Andrews, editorial director of Chicago-based sports marketing consultancy IEG, LLC, says the Coors Light deal included about $30 million a year to pay for the rights and a commitment to spend at least $70 million annually in advertising.

“Obviously, that is a lot of money to reallocate,” he says. “There is such a strong connection between football and beer that I would think they would reinvest some of that money back into football deals at the team or local levels.”

Coors Light had been the fastest-growing light beer in recent years, but sales have slowed in the past year. It was aggressively marketed through its NFL sponsorships with campaigns such as spoofs on coaches’ post-game news conferences.

Despite that sales slip, MillerCoors reported Tuesday that its first-quarter profit rose slightly on cost-cutting and higher prices.

MillerCoors, which also makes Miller Genuine Draft and Blue Moon, earned $208.6 million for the period ended March 31. That’s up 1% from $206 million a year ago. Excluding charges of $8.6 million related to severance and relocation costs, profit was $217.2 million.

Revenue dipped 1% to $1.7 billion as sales of Coors Light and mainstay Miller Lite fell.

MillerCoors is a joint venture of the U.S. businesses of Molson Coors Brewing Co. and SABMiller PLC.

(The Associated Press contributed to this report.)