Professional sports are continues to be a powerhouse when it comes to market growth. Year over year, there seems to be no end in sight. Since this has always been the case, many companies have shelled out major dollars to snag sponsorship deals to drive customers to buy their goods or services. In particular, the alcoholic beverage industry has invested heavily to drive their own market growth. However, some risky decisions have made many question if being an official sponsor is all its cracked up to be in the quickly changing landscape that is sports.
Last year, there two biggest sporting leagues were the NFL and MLB in terms of viewership and revenue. The NFL brought in a whopping $13 billion and is considered the most popular sport in the United States. Following in a close second is the MLB, with a revenue of $9.5 billion dollars. The main driving factor behind market growth is bringing new people on as consumers of a product. Over the past 20 years, both leagues have increased viewership to new heights. With names and logos being shown to tens of millions of people, the alcohol industry decided it was time to get their name and product in front of as many eyes as possible.
Currently, Anheuser-Busch accounts for 81 percent of all active properties sponsored in the MLB. To put that in perspective, they are tapping into the $695 million dollar market to help drive their bottom line. The company has a competitive edge over others because of its long history with the league.
The relationship between Anheuser-Busch and the MLB dates back to 1980 while most of the other sponsors only set up shop between 19997 or early 2004. Getting in with the league early on has almost made the MLB and Anheuser-Busch name synonymous.
However, the company has made questionable moves in the NFL. In 2011, Anheuser-Busch paid $1.2 billion to make Bud Light the official sponsor of the league, replacing Coors Light. The reasons are numerous: players can’t endorse them, they have no exclusive television rights, etc.
Which is making other alcohol companies wonder if all of the sponsorship buzz is worth it. After all, digital and social media has the ability to send a companies youtube clip into the stratosphere. The biggest example of this is when Pabst Blue Ribbon was revived with a grassroots marketing campaign. After stagnant sales of years, simply sponsoring local bands led to some of the biggest year of year sales percentage increases the alcoholic beverage industry had seen in decades.
The only way to truly find out whether or not these multi-billion dollar sponsorship deals will pay of is waiting. One way or another, it is a risky move with the highest stakes imaginable.