Molson’s announcement that it will be the official beer of the NHL next year may have surprised many, but it really was a bolt out of the blue for Labatt which believed it already had an agreement for that title.
The NHL and Molson announced the new league-wide sponsorship agreement today. Soon after that announcement, long-time NHL in Canada sponsor Labatt issued a press release saying it already had an agreement with the league to renew its sponsorship and was now “pursuing all legal remedies available to us to enforce this agreement.” It’s believed Labatt learned of the NHL’s decision to sign with Molson last week.
Aside from league sponsorship, Labatt’s parent Anheuser-Busch and the Bud Light brand sponsor 22 of the 24 U.S.-based NHL teams.
“Labatt has been the official beer sponsor of the NHL in Canada for more than a decade and we began sponsorship renewal negotiations with the league several months ago to secure sponsorship rights,” said Labatt vice-president, corporate affairs, Charlie Angelakos, in a release. “These negotiations with the NHL proceeded positively and in good faith to the point where the parties had agreed upon the terms of renewal of a sponsorship agreement until 2014. Nothing has happened to change that situation.”
Terms of Molson’s seven-year deal weren’t disclosed, but a source with knowledge of negotiations said it came in at slightly more than US$375 million, believed to be the largest in league history.
“It’s a monster deal,” NHL chief operating officer John Collins said in an interview. “They’re going to have major position across all of our events–both our existing events as well as a lot of new ones that we hope to create.”
As for the Labatt challenge, the NHL issued a statement from deputy commissioner Bill Daly, Tuesday afternoon: “Labatt has been and continues to be a terrific partner, but we strongly disagree with their assertion that an agreement was in place for the 2011-2012 NHL season. We have no further comment at this time.”
The North American agreement with Molson Coors in Canada and MillerCoors in the U.S. will see the sister companies heavily represented across the NHL calendar starting next season. It also includes money for television advertising and smaller deals with individual teams.
“What this will allow us to do is to take the brand to a whole new level,” said Dave Perkins, president and CEO of Molson Coors Canada. “It enables us to really take hockey to our beer drinkers and to fans, and to provide hockey experiences behind the brand.
“As you’d know, Molson Canadian is really synonymous with hockey–it has been for decades–so this is a really nice fit with what the brand is all about.” (The Labatt release noted: “Bud and hockey belong together and we will pursue our case aggressively.”)
The NHL hopes the Molson agreement is another sign of positive momentum as it continues to negotiate new American TV contracts. The current agreements with Versus and NBC expire at the end of the season.
Ratings increased for both the Jan. 1 Winter Classic outdoor game at Pittsburgh’s Heinz Field and the recent all-star game in Carolina–events that sponsors also gravitated to because of the opportunities they present to both entertain clients and reach hockey fans.
“I love what the NHL is doing,” said Perkins. “They’re really taking hockey to the public. Hockey is obviously extremely well-developed in Canada, so you’re dealing with a premier sports league that really knows how to get the fans involved.”
Collins joined the NHL in August 2008 after holding a number of positions within the NFL. He’s helped develop the league’s current strategy and believes it is starting to pay off.
“It’s created a really easy path for corporate partners and advertisers to spend money against hockey,” said Collins. “In this environment, that’s critical–to be able to attract the blue-chip top advertisers and get them to spend their marketing and advertising dollars on your sport.
“It’s the fuel that drives the entire business.”
