MillerCoors takes over NHL beer sponsorship

Discussion in 'Fugu's Business of Hockey Forum' started by Mwd711, Feb 22, 2011.

  1. Mwd711

    Mwd711 Registered User

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    Last edited: Feb 22, 2011
  2. jessebelanger

    jessebelanger Registered User

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    400 mill!!!!

    Wow.

    2nd article mentions this is "more then twice" what the old deal was worth.

    edit: my numbers were of course way off.
     
    Last edited: Feb 22, 2011
  3. TaketheCannoli

    TaketheCannoli RIP

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    Ooh, my wife will not be happy. The only beer she will drink is Labatt.
     
  4. DopeyFish

    DopeyFish Mitchy McDangles

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    Looks like the NHL was very unhappy about having the jets logo as the most prominent logo in the bud ads during the heritage classic - so much so that they've taken a deal that's worse than before :sarcasm:
     
  5. AllByDesign

    AllByDesign Who's this ABD guy??

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    Ummm... some quick math makes this deal $57 mill a year... quite a reduction from the prior $75 mill a year. :shakehead
     
  6. Dave is a killer

    Dave is a killer Dave's a Mess

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    that is some crap beer ... come on NHL
     
  7. Kebekoi

    Kebekoi Registered User

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    I tought that the beer was to the choice ($) of the arena management company.

    So Labatt (A-B) cannot outbid Molson (Coors) to the beer market in the new Québec Colisée? :shakehead
     
  8. AllByDesign

    AllByDesign Who's this ABD guy??

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    This is an official sponsorship deal, and is not binding on what is served in the facilities.
     
  9. Mwd711

    Mwd711 Registered User

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    You're right. It was $75 million per contract not per year. That was my error. The $75 million was over three years. It included the Labatt deal. http://www.bizjournals.com/stlouis/stories/2008/06/02/daily29.html
     
    Last edited: Feb 22, 2011
  10. DopeyFish

    DopeyFish Mitchy McDangles

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    If my math is correct(and it never is), this would attribute to a rough rise of $600,000 in salary cap alone
     
  11. DungeonK

    DungeonK Love Thy Neighbor

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    Good, Miller Coors and Molson are all better beers than Bud/Labatt
     
  12. Fugu

    Fugu Guest

    Can anyone translate:

    And hockey fans drink the most beer amongst sports fans? :facepalm:

    I am a bit surprised by that, given their tech/savvy, higher income demographic.
     
  13. yotesreign

    yotesreign Registered User

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    I sniffed around online since the numbers didn't make sense to me either ($375-400 million/7 years is less than $75 million a year). One source said A-B has been sponsor of the league since 1994 - another said Bud Light sponsored the league since 1998.

    The one article makes it sound like the $375 million is $300 million league wide and the balance is agreements with 23 of the NHL teams - I'd speculate that's for in-arena advertising and sponsorship & sales.

    If this is worth twice the old deal, I'll guess the old deal was worth around $190 to $200 million over 7 years? ;)
     
  14. Dave is a killer

    Dave is a killer Dave's a Mess

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    2,380,952.38 per team 400,000,000/7/24
     
  15. jessebelanger

    jessebelanger Registered User

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    Hmm..

    activation expenditures would be the expenses related to producing spots to use the rights - creating commercials, posters, hiring actors...

    media rights buys I assume would be purchase of TV and radio spots during NHL Games (from NBC tsn etc)



    Sounds like the NHL is only receiving about 100 million (the "rights fees")of this 400 million dollar deal. The deal is "worth" 400 million, the NHL's haul is 1/4th of that. (quoting again for reference):

     
  16. Mwd711

    Mwd711 Registered User

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    The rights fees are for use of the NHL logo and being the official beer. The media buys are guarantees for the NHL's broadcast partners. They will run $100 mil of ads on the NHL's media partners. The "activation expenditures" are marketing activities outside of television. I would assume that means contests, promotions, etc.
     
  17. DopeyFish

    DopeyFish Mitchy McDangles

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    It's for both countries - revenue is counted for the league as a whole

    Would be (((400,000,000 / 7) / 30) * .57) / 2 (assuming it's exactly double) = cap added
     
    Last edited: Feb 22, 2011
  18. yotesreign

    yotesreign Registered User

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    At the last Nascar Sprint Cup race I was at in November, almost every one around me had at least 10 beers. I noticed because I don't drink anymore and it's more noticeable when others do around me and I'm passing cups and cash down the row all race. At Cardinals games, there's maybe 2 guys who do that sitting by me - most every one else who has beer drinks 3 or 4. Same holds for Coyotes games.

    Maybe it's different in other markets...
     
  19. Fugu

    Fugu Guest

    Pays to read the fine print. My translation? They have the right to spend more to "get in your face"... And more of those infernal ads on the glass behind the net during games. I hope it's just behind the net......


    It's not as bad as it sounds. The NHL can leverage this with their broadcast partner (assuming this means the new NBC/VS deals), at least that would be the hope.
     
  20. Sideline

    Sideline Registered User Sponsor

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    Dopey is correct.

    59.4 - 8 = 51.4 current cap mid point
    51.4 x 30 = 1542 current player share of HRR
    1542/0.57 = ~2705.26 current total HRR
    2705.26 + 28.5 = 2733.76 annual HRR after net increase in sponsorship (assuming old deal was 25 per and new deal is 375/7)
    2733.76*0.57 = 1558.245 new players share of HRR
    1558.245/30 = 51.9415 new cap mid-point
    51.9415 + 8 = 59.9415 new cap ceiling

    59.9415-59.4 = 0.5415 or ~$541,500 increase in the salary cap.

    Edit: some people above me point on the NHL doesn't necessarily get all 375 million. Adjust the math accordingly.
     
  21. Dave is a killer

    Dave is a killer Dave's a Mess

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    good to know beer deals are now paying for 4th line guys
     
  22. Fugu

    Fugu Guest


    Look more closely. The teams don't get all of that money directly. $100m over seven years is a direct payment, so divide by seven to get the annual amount.

    Here's the text again:

    With the deal, MillerCoors replaces Anheuser-Busch, which had held U.S. NHL league sponsorship rights since ‘94, and A-B-owned Labatt, the NHL’s Canadian beer sponsor since ‘98. MillerCoors has committed to spending $375M over the next seven years through an estimated $100M in rights fees, $100M in activation expenditures, another $100M in media buys with league rights holders and various club spending obligations. The sponsorship, announced Tuesday, is effective July 1.


    At best you can count the $100m sponsor fee, and then assume $100m is spent on the sponsor activation, but not sure if that's with specific teams who then get the money or the league is selling rights to individual team venues+promos????
     
  23. Mwd711

    Mwd711 Registered User

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    I noticed the same thing when trying to figure the prior beer deals. As I have in my edited post, the last renewal was for three years.

    I think one of the confusions that those sources had was that while it was A-B holding the rights, it was two different beer brands. Bud Ice was the official sponsor in 1994. Who can forget those penguin commericals? A-B renewed it's deal but Bud Light took over in 1998 and the penguins went away as did most of the marketing that was specifically marketed towards the NHL.

    The Bud Ice ads were great marketing and MillerCoors would be wise to build a marketing campaign similar to that. It seems to me that A-B never really used their branding rights to full effect except for those Bud Ice ads. Since then, they just seem to slap on the NHL logo, do a voiceover and call it a day. Those "activation expenditures" should change that. The point of the sponsorship activation is how you grow the brand beyond being the rights holder. That's something that A-B failed at during the last several years of their sponsorship.
     
  24. leoleo3535

    leoleo3535 Registered User

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    Good deal but abit odd.

    Basically being sponsored 50% by the Montreal Canadians.
     
  25. Fugu

    Fugu Guest


    You noticed that too?

    It seems that several owners have teams and then leverage that into additional business with the NHL. It's smart business for them.

    Jacobs-- concessions business, and 20% ownership of NESN
    Molson-- as indicated above
    Snider -- Comcast ---> VS, NBC
    Anschutz -- arena management
     

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