[Ontario] Judge rejects NHL deal with Molson-Coors; UPD: overturned, deal upheld

[Melrose Munch]

The NHL is a clown show. But guys still go to the ESPN boards to brag how its
"on the rise"

 

[Killion]

If that 375 million is per year, than I would project every team to make a profit next year.

Its a 7yr deal.

The NHL is a clown show. But guys still go to the ESPN boards to brag how its "on the rise"

How d'you come to that conclusion MM?. From a sponsorship perspective & overall growth of league wide revenues the NHL's record over the past decade is second to none. Admittedly they had a lot of catching up to do with the NBA/MLB & the NFL & their not there yet, but for sure the leagues on the rise. Some well respected litigation lawyers were quite adamant the NHL & Molsons' didnt stand a chance on appeal, yet here we are. I wouldnt call that clowning around.

"To me, Clowns arent funny, their scary. Ive wondered where this comes from, and I guess it goes back to the time when I was a kid & I went to the Circus, and a Clown killed my Dad".
Jack Handey

 

[Mwd711]

If that 375 million is per year, than I would project every team to make a profit next year.

It's over 7 years. In court papers, it was found that the previous deal was worth $36 mil over three years.

So the NHL & Molsons won on Appeal?. Thats pretty amazing. Litigation experts by the dozen claimed they didnt stand a chance. So the $375M sponsorship deal is upheld & Labatts' is now going to do what?.

Like you, I'm amazed that the NHL won this case. From everything that I read, they sure seemed screwed. I would've loved to have been in the courtroom to figure out how they pulled this off. Maybe some more details will leak out.

Labatt has already made some moves by taking over many team sponsor deals. I don't know if they can appeal this or find another legal avenue to challenge this or not. I'm not sure it's even worth it at this point.

 

[Shawa666]

It's over 7 years. In court papers, it was found that the previous deal was worth $36 mil over three years.



Like you, I'm amazed that the NHL won this case. From everything that I read, they sure seemed screwed. I would've loved to have been in the courtroom to figure out how they pulled this off. Maybe some more details will leak out.

Labatt has already made some moves by taking over many team sponsor deals. I don't know if they can appeal this or find another legal avenue to challenge this or not. I'm not sure it's even worth it at this point.

They always could go to the supreme court.

 

[Roughneck]

The NHL is a clown show. But guys still go to the ESPN boards to brag how its
"on the rise"

How does the NHL winning an appeal few thought they could to increase their sponsorship dollars make them a clown show?

Seems as though this clown show went from making $12M a year for three years in beer sponsorship to ~$50M per year for seven years. Looks to be on the rise to me.

 

[Grudy0]

1) The teams if not controlling concessions hold a great deal of sway & influence with the manager in terms of "requesting" that "so & so" be assigned exclusive & or premium pouring rights/positioning/branding as per their sponsorship agreements with ABC Brewery. In my experience the Concessionaire will almost always accommodate such requests.

That's generally how it works. Most of the teams have some kind of control over the operating rights of the arena, and they work with their arena manager to make sure the preferred sponsors receive in-kind consideration for the sponsorship.

2) Why would that be a breach of anti-trust law provided the competitors are given shelf space in the coolers, maybe the odd tap here n' there?. How about the NHL does a deal with Orville Redenbacher whereby league wide the only popcorn you can buy at a game is Orvilles & the Concessionaires get it for less than what they currently pay from a wholesaler. Thats anti-trust?.

The NHL has no control over the marketing and arena rights that the teams currently have.

The NHL has the right to make Orville Reddenbacher the official popcorn of the NHL. That would give Orville Reddenbacher the right to use the NHL-trademarked properties, such as "Official Popcorn of the NHL" and "Stanley Cup Popcorn".

However, the NHL has no right to make its member teams sell Orville Reddenbacher at their arenas.

That is why InBev has the rights to 22 of 24 US NHL arenas; the individual teams have the right to negotiate to be the "Official Beer of the New York Rangers".

And that is where it gets absolutely hilarious. Budweiser for years was the NFL sponsor, until they lost out to Molson-Coors. However, Budweiser still maintains the official status for most of the teams in the NFL.

 

[Melrose Munch]

How does the NHL winning an appeal few thought they could to increase their sponsorship dollars make them a clown show?

Seems as though this clown show went from making $12M a year for three years in beer sponsorship to ~$50M per year for seven years. Looks to be on the rise to me.

Did see the update.

 

[Killion]

How does the NHL winning an appeal few thought they could to increase their sponsorship dollars make them a clown show?

Obviously it doesnt. Now, Jay Feaster, theres a Clown Show. Im guessing he's gone deaf from the Sirens wailing pretty much from the first through third periods in almost every rink the Flames play in thats not called the SaddleDome.

 

[Roughneck]

Obviously it doesnt. Now, Jay Feaster, theres a Clown Show. Im guessing he's gone deaf from the Sirens wailing pretty much from the first through third periods in almost every rink the Flames play in thats not called the SaddleDome.

There's probably a better chance he's gone deaf in one ear from having to sit next to Conroy for every game down the stretch. And if I could blame Feaster for switching from the heroin beer sponsorship to Labatt I would. Those beers had better be just as potent next season as they have been in the past if they expect us Flames fans to make it through another year like last.

And to slowly bring this to topic, nobody seems to know what the Flames and Canucks' new sponsorship deal with Labatt is worth, but the Leafs make ~$10M/year from Molson for theirs. If they have the Habs and Leafs locked up it makes you wonder why Molson even cared about shelling out such big bucks the league-wide sponsorship. I would have thought the individual rights would have been more important for them. I don't drink Molson outside of the Saddledome, and had somebody asked me who sponsored the league I probably would have said Molson-Coors simply because it was the only beer I drink at NHL games.

 

[jessebelanger]

There's probably a better chance he's gone deaf in one ear from having to sit next to Conroy for every game down the stretch. And if I could blame Feaster for switching from the heroin beer sponsorship to Labatt I would. Those beers had better be just as potent next season as they have been in the past if they expect us Flames fans to make it through another year like last.

And to slowly bring this to topic, nobody seems to know what the Flames and Canucks' new sponsorship deal with Labatt is worth, but the Leafs make ~$10M/year from Molson for theirs. If they have the Habs and Leafs locked up it makes you wonder why Molson even cared about shelling out such big bucks the league-wide sponsorship. I would have thought the individual rights would have been more important for them. I don't drink Molson outside of the Saddledome, and had somebody asked me who sponsored the league I probably would have said Molson-Coors simply because it was the only beer I drink at NHL games.

Really? Honestly that surprises me. I find every hockey game I watch I'm sitting through 100 bud light commercials, not to mention the bud t-shirts, beer bottles, bud camp, etc etc..that are all plastered with NHL gear.

Sadly I can say that having a beer bottle with a panthers logo on it does often influence my purchasing.

 

[Killion]

And to slowly bring this to topic, nobody seems to know what the Flames and Canucks' new sponsorship deal with Labatt is worth, but the Leafs make ~$10M/year from Molson for theirs. If they have the Habs and Leafs locked up it makes you wonder why Molson even cared about shelling out such big bucks the league-wide sponsorship. I would have thought the individual rights would have been more important for them. I don't drink Molson outside of the Saddledome, and had somebody asked me who sponsored the league I probably would have said Molson-Coors simply because it was the only beer I drink at NHL games.

Ya, its kind of hard to wrap your head around. Why would Molsons-Coors pay so much for league sponsorship yet at the team levels, in arena, Labatts' has a lock on a bunch of teams. Without having seen the marketing prospectus between the NHL & Molsons', Im guessing their using this over the next 7yrs to mount an aggressive campaign targeting retail & licensed establishments in both Canada & the US, and, it likely includes an extensive amount of media in terms of TV, Web & new-media advertising, along with possible title sponsorship positioning to various NHL produced events. The fee of $375M is impressive, but I really have to wonder just how much of that after paying expenses is left over. Molson-Coors will have to shell out a whole lot more for commercial production, packaging, premiums etc etc etc... $375M is just the start....

 

[Mwd711]

Ya, its kind of hard to wrap your head around. Why would Molsons-Coors pay so much for league sponsorship yet at the team levels, in arena, Labatts' has a lock on a bunch of teams. Without having seen the marketing prospectus between the NHL & Molsons', Im guessing their using this over the next 7yrs to mount an aggressive campaign targeting retail & licensed establishments in both Canada & the US, and, it likely includes an extensive amount of media in terms of TV, Web & new-media advertising, along with possible title sponsorship positioning to various NHL produced events. The fee of $375M is impressive, but I really have to wonder just how much of that after paying expenses is left over. Molson-Coors will have to shell out a whole lot more for commercial production, packaging, premiums etc etc etc... $375M is just the start....

Included in that $375 million are sponsorship activation which is much of what you are talking about. That's not to say that they can't go over that but they have a committed minimum dollar number as part of the deal. The biggest gains that Molson will see will be branding at league events, cross-promotions and the ability to use the leagues, logo, Stanley Cup, etc.

I don't see anything that stops Labatt/Bud from continuing to advertise during games on TV. In the US, Bud Light has been the official beer sponsor for years, but Miller Lite still runs plenty of ads during games. In the case of Labatt, that's probably only going to grow since they have added to their team partnership stable.

I don't see any reason for Labatt to continue to fight this. Yeah, they lost a little bit marketing wise, but it's not like they are being banned from being involved with NHL teams. As long as they can do that, I wouldn't be so concerned. Perhaps it's more of an ego thing at this point between corporate rivals.

 

[Killion]

I don't see any reason for Labatt to continue to fight this. Yeah, they lost a little bit marketing wise, but it's not like they are being banned from being involved with NHL teams. As long as they can do that, I wouldn't be so concerned. Perhaps it's more of an ego thing at this point between corporate rivals.

It could be. What would also be interesting to find out is what the arrangement is between the teams & the NHL with respect to rink board advertising. Does the NHL have 'X' number of spots available, and if so, what happens to the exclusivity clauses by category if say Labatts' has signage and suddenly the NHL demands space for Molsons-Coors?.

 

[Mwd711]

It could be. What would also be interesting to find out is what the arrangement is between the teams & the NHL with respect to rink board advertising. Does the NHL have 'X' number of spots available, and if so, what happens to the exclusivity clauses by category if say Labatts' has signage and suddenly the NHL demands space for Molsons-Coors?.

I'm not 100% sure but I believe that the only time that the NHL controls anything when it comes to dashers is for NBC broadcasted games. Outside of that, each team handles it and the league isn't involved besides the required Reebok/NHL.com ads. During NBC telecasts, the league gets a few of the dashers and puts official partners or telecast sponsors up and the teams have to change the ads around.

It's pretty common to see rivals of official league partners have ads up on dashers, in arenas and shown during telecasts.

 

[Killion]

During NBC telecasts, the league gets a few of the dashers and puts official partners or telecast sponsors up and the teams have to change the ads around.

Exactly. So with the new NBC contract pending, last February Molsons-Coors signs on for a cool $375M "Official" sponsorship package. This week, the NHL rolls all 14 staff members from its in-house National Advertising Sales Div. over, into & under the control of NBC/Versus Sales & Sponsorships Div. You'd just have to figure the Molsons-Coors sponsorship package includes rink board advertising to regular season & playoff games aired now in volume south of the border. Labatts has deals in place which in some cases includes dasher board ad's, likely with "exclusivity" clauses. It should be interesting to see how the league comports itself with the franchises who have made their beds with Labatts'. If history is anything to go on, with a lot of money & eyeballs in play, NBC & Molsons-Coors will have it anyway they please with a very compliant partner in the NHL. Combined, were talking in excess of a half a billion dollars flowing into & through the leagues coffers, and thats just for starters.

 

[Breakaway3527]

Why do people respond to "Melrose Munch". His constant criticism of anything hockey is childish and non-relevant.

 

[Gnashville]

Does this in any way effect the type of beer anyone drinks??? Not me.

 

[Killion]

Well Gnashville, I rarely drink beer, but when I do....... dos Equis.

I once diverted a meteorite, with a stare.
I once had the IRS pay my taxes.
I chase the Bulls at Pamplona.
I can read French in Chinese.
I can Waterski on my head.
I Fathered myself.

 

[Canadiens1958]

Reasoning

Ya, its kind of hard to wrap your head around. Why would Molsons-Coors pay so much for league sponsorship yet at the team levels, in arena, Labatts' has a lock on a bunch of teams. Without having seen the marketing prospectus between the NHL & Molsons', Im guessing their using this over the next 7yrs to mount an aggressive campaign targeting retail & licensed establishments in both Canada & the US, and, it likely includes an extensive amount of media in terms of TV, Web & new-media advertising, along with possible title sponsorship positioning to various NHL produced events. The fee of $375M is impressive, but I really have to wonder just how much of that after paying expenses is left over. Molson-Coors will have to shell out a whole lot more for commercial production, packaging, premiums etc etc etc... $375M is just the start....

More people drink beer outside arenas than inside the NHL arenas. Bar owners and consumers are not aware of the distinction between "Official NHL Beer", "Stanley Cup Beer" or whatever the titles may be nor are they familiar with or care about the distinction that being the "Official NHL Beer" does not include pouring rights.

All that matters to bar owners is who shows-up with the appropriate promotional NHL posters, banners, etc to attract drinkers and viewers to their bar. Multiply this all the way down the line for all the different places where beer is solid - convenience stores, grocery stores, liquor stores etc and the benefits are there.

 

[DonCherrysSuit]

Does this count towards the league revenue that affects the cap? Will this have a large influence on the cap?

 

[Mwd711]

More people drink beer outside arenas than inside the NHL arenas. Bar owners and consumers are not aware of the distinction between "Official NHL Beer", "Stanley Cup Beer" or whatever the titles may be nor are they familiar with or care about the distinction that being the "Official NHL Beer" does not include pouring rights.

All that matters to bar owners is who shows-up with the appropriate promotional NHL posters, banners, etc to attract drinkers and viewers to their bar. Multiply this all the way down the line for all the different places where beer is solid - convenience stores, grocery stores, liquor stores etc and the benefits are there.

Good marketing and cross-promoting can make a difference, there's no doubt about that. The last official beer sponsor that used the NHL successfully was Bud Ice. Since then, there's been very little effort put in by Bud Light, at least in the states. When Bud Ice was the sponsor, you saw plenty of promotional things in bars, stores and on cartons, but those days are long gone. You see very little of that "activation" anymore. Here's hoping this deal changes that in the US.

 

[Fugu]

Does this count towards the league revenue that affects the cap? Will this have a large influence on the cap?

Yes. All hockey-related revenue is totaled up in determining the cap. Expansion and relocation fees, and anything to do with the sales of a franchise are not.

Well Gnashville, I rarely drink beer, but when I do....... dos Equis.

I once diverted a meteorite, with a stare.
I once had the IRS pay my taxes.
I chase the Bulls at Pamplona.
I can read French in Chinese.
I can Waterski on my head.
I Fathered myself.

I drink alone, yeah
With nobody else
I drink alone, yeah
With nobody else
You know when I drink alone
I prefer to be by myself...

Stay thirsty, my friend.

 

[Killion]

Stay thirsty, my friend.

You too......

 

[Roughneck]

Does this count towards the league revenue that affects the cap? Will this have a large influence on the cap?

It does count towards league revenue, and if the AB deal is true at $12M a year, then the cap would go up by ~$1.3M a year with the new deal. (I think I have that right).

 

[kdb209]

It does count towards league revenue, and if the AB deal is true at $12M a year, then the cap would go up by ~$1.3M a year with the new deal. (I think I have that right).

I think you forgot about the 57% Players Share.

Old: $36M/3 yr = $12M/yr
New: $375M/7 yr = ~$53.6M/yr
delta(midpoint) = (New - Old) * Players Share / # teams = $41.6M * 0.57 / 30 = ~ $790K.

Of course, this all assumes the Cap formula (and Players Share) doesn't change in the next CBA.