A-B InBev Adds Incentives to Sports Sponsorship Contracts; Environmental Performance Should Be In Mix

A-B InBev, the parent company of Anheuser-Busch and America’s biggest sports sponsor, is making a big change to the way it deals with its sports property partners. Incentives for positive on- and/or off-field performance are now being included in their contracts with leagues, teams, events and venues. Will environmental incentives be in the mix?

 

Terry Lefton, arguably the dean of sports-business journalists, broke an important story in the April 2 issue of Sports Business Journal (SBJ)

In “A-B’s Sponsor Shocker,” Lefton wrote that A-B InBev (ABI), America’s biggest sports sponsor, is “instituting incentive clauses within its [sponsorship] deals…offering properties as much as a 30 percent bonus if specific on-field performance and marketing criteria are met or surpassed…ABI is believed to be the first major sponsor to make it a standard part of its sponsorship contracts.”

A challenging and changing landscape for sports, both at stadia and arenas as well as on TV, is providing new leverage for sponsors and is helping to drive this new way of dealing with properties.

Lefton quoted Joao Chueiri, ABI’s vice president for consumer connections and a prime mover behind this new approach, as saying, “The traditional sponsorship model, based on fees and media commitments, does not deliver the best value for us at a time when most leagues and teams are facing challenges with live attendance and TV ratings. We want to evolve the model and encourage fan engagement … with an awareness that each deal is unique.”

 

Joao SBJ

Joao Chueiri, ABI’s vice president for consumer connections (Photo credit: Terry Lefton/Sports Business Journal)

 

Lefton reported that the early partners in new, incentive-laden ABI deals are the Minnesota Timberwolves of the NBA, MLB’s Los Angeles Dodgers, the New Orleans Saints  of the NFL and NASCAR: “The stock car circuit opted for earned media, fan engagement/social media measures, while the Dodgers, after a season in which they won the National League pennant, chose on-field performance indicators, including wins and losses.”

 

Budweiser TWolves

Budweiser signage adorns the scoreboard at Target Center in Minneapolis, home of the NBA’s Minnesota Timberwolves (Photo credit: NBA.com)

 

Will properties suffer a penalty if they don’t meet the minimum thresholds for incentives?

In a word, no.

Per Lefton, “they won’t get paid less if they fail to meet those targets.” Not surprisingly, every property that has been asked to accept an incentive-laden model has done so.

Chueiri told SBJ that key performance indicators for incentives available under ABI’s new sponsorship model include “attendance, wins/losses and other on-field performance measures, social media and other fan engagement metrics, and brand awareness and consideration among those aware of the sponsorship. The idea is to motivate the property to ensure every fan knows that Budweiser is the official beer.” ABI hopes the incentive program might be the differentiator to make a team, league or event choose it over a competitor.

Environmental performance was not a part of the list of metrics mentioned by Chueiri.

This is not surprising at this early stage. Metrics like wins and losses and social media traffic should be at the top of a list of incentives for a potential ABI sports property partner to hit. These are all “mothers’ milk” for teams and sponsors alike.

But, it says here that, sooner rather than later, environmental performance metrics need to be added to ABI’s list:

  • ABI has made clear that environmental performance, especially on water-related issues, is a core part of its DNA
  • Flagship ABI brands like Budweiser and Stella Artois advertise their commitment to access to clean water on mega sports broadcasts like Super Bowl LII
  • Lefton reported that all of ABI’s 90 or so U.S. team and league sports sponsorships are up by the end of 2021 and that “the brewer hopes to have completely overhauled its sponsorship model by then.”

 

Matt Damon stars in Stella Artois’ 30 second, water conservation-themed, Super Bowl ad

 

With that being the case, metrics like water use efficiency and waste diversion rates need to become part of ABI’s sports partnership incentive program soon.

THAT will be a very big deal.

Watch this space.

 


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If the Most Important Green Aspects of Super Bowl LII are Two Beer TV Ads, Is That a Good Thing?

Super Bowl LII will be played in Minnesota, one of the most environmentally-conscious states in the country. Host city Minneapolis is mass-transit friendly and filled with LEED certified stadia and arenas. The Philadelphia Eagles and New England Patriots will do battle in LEED Gold US Bank Stadium. The game will be zero-waste and 100 percent of the energy used to power the contest will be offset. Yet, it says here that the most important green aspect of the 2018 Super Bowl may well be two beer ads — unless the NFL steps up to tell the Big Game’s green story to the audience 100+ million people.

 

Question: What does this triumvirate — Clydesdale horses, the Bud Bowl, and recent catastrophic extreme weather events — have in common?

Answer: They are each themes of Budweiser Super Bowl ads, past and immediate future. If there was a Super Bowl Advertising Hall of Fame, the brand’s ads featuring the iconic, white maned horses and the fun, computer-generated football games played by teams of beer bottles (Bud vs. Bud Light!) would both certainly be first ballot inductees.

But corporate parent AB InBev’s stablemates Budweiser and Stella Artois are going in a different direction for Sunday’s broadcast on NBC.

In “Budweiser’s Super Bowl Beer Ad Isn’t about Beer,” which ran in the January 26 issue of Environmental Leader, Jennifer Hermes reported that the brand’s 60 second Super Bowl spot is actually about…water: “[US corporate parent] Anheuser-Busch currently produces canned drinking water at its Cartersville, GA, brewery, and ships them to communities in need. This year, the company shipped nearly three million cans of emergency drinking water to areas hit by Hurricanes Harvey, Irma, and Maria, and by the California wildfires. In total, the company says it has provided over 79 million cans of drinking water to communities in need. The Super Bowl ad tells the story of its employees in the Cartersville plant who produce the emergency drinking water. [It] features the general manager of the brewery, along with more than 20 of his local colleagues.”

 

Budweiser’s “Stand By You” water-themed Super Bowl ad (60 seconds)

 

Stella Artois’ 30 second ad, produced in partnership with water.org, features actor Patriots fan Matt Damon, who calls on beer lovers to step up to help solve the water crisis by buying a Stella beer chalice. Damon asserts that if just one percent of Super Bowl viewers purchase the glass, Stella will provide “clean water to one million people. For five years.”

 

Matt Damon stars in Stella Artois’ 30 second, water conservation-themed, Super Bowl ad

 

Why did Budweiser and Stella take this turn?

 

IT COMES DOWN TO WATER — AND EYEBALLS

Quality water is, of course, crucial to the beer brewing process. AB InBev and its U.S. subsidiary Anheuser-Busch has implemented a robust water stewardship and environmental protection program across its sprawling brewery roster.

The initiative has engaged employees, farmers, suppliers and strategic partners to devise and implement a wide range of water conservation and management measures. Anheuser-Busch says this approach helped it reduce water use across all of its U.S. breweries by nearly 50 percent over the last 10 years.

That is a BIG achievement which warrants the BIG ad spend — NBC Sports is charging $5 million dollars for a 30 second spot — on the BIG game to reach the BIGGEST television audience of the year — 111 million people watched the 2017 Super Bowl.

Reaching such a vast audience with environmentally-themed messaging is why I believe Bud and Stella Artois have co-authored the most important green story surrounding Super Bowl LII.

Oh, you might say, “I think the fact that the the NFL, the Minnesota Super Bowl Host Committee, and US Bank Stadium are teaming up to offset 100 percent of the game’s carbon footprint via the purchase of renewable energy credits is more consequential than a couple of ads.” Or, you might opine that “Rush2Recycle, the program sponsored by PepsiCo, and promoted by ex-NFL great Hines Ward, that will help Sunday’s game be the first zero-waste^ Super Bowl, has to be considered the most important green story.”

 

us bank stadium

Exterior of US Bank Stadium, site of Super Bowl LII (Photo credit: SI.com)

 

While those efforts are, of course, laudable, I still go with Bud and Stella.

Because the  audience of 100 million+ people who might see the Bud and/or Stella Artois water-themed ads on NBC will likely be between 50 to 100 times greater than the number of people who learn about the zero-waste and/or the offset aspects of Super Bowl LII. That audience includes the 66,000+ fans inside US Bank Stadium, along with readers of national media outlets like Fast Company magazine, which are giving the zero-waste Super Bowl story welcome coverage.

Now, the NFL can easily wrest the “most important green story of Super Bowl LII” title away from Bud and Stella. All it needs to do is to create a public service announcement touting the green aspects of Super Bowl LII — hey, as of this writing, there are three days left; plenty of time for great content to be produced — and air it on NBC during the game.

What a BIG deal that would be! But will the NFL step up?

The stakes, said Dr. Allen Hershkowitz, founder and former president of the Green Sports Alliance and a founding director of Sport and Sustainability International (SandSI), are much higher than even the Super Bowl itself.

“As one of the most visible sporting events in the world, the Super Bowl has a unique opportunity to promote environmental literacy and reduce cultural polarization related to climate change,” said Dr. Allen Hershkowitz. “US Bank Stadium’s commitment to 100 percent renewable energy credits, ambitious zero-waste goals, and the [Minneapolis] region’s intelligent mass transit infrastructure, positions this event to be among the most carbon intelligent Super Bowls ever. The question before us is this: Will the NFL meaningfully promote this aspect of the Super Bowl story? Given the bewildering retreat from essential, science-based climate policy being enacted by the worst environmental administration in our nation’s history, a counter message by the NFL promoting progress on climate could not be more important. It has a responsibility to the world to do so.”

 

ENVIRONMENTAL MESSAGING: A WINNER FOR THE NFL

NFL Commissioner Roger Goodell, Commissioner of the NFL, talks a good environmental game: “The NFL is a responsible steward of the environment in all areas of our business. Through [these zero-waste and offset projects], the League and its partners hope to set a new standard of environmental sustainability at the Super Bowl.”

But Goodell’s green talk mainly takes place in dry, easily ignorable press releases, not on Super Bowl broadcasts.

The Commish and league should go beyond press releases and talk the green talk to the widest possible audience — i.e. during the Super Bowl. Because doing so would likely be good for business.

Say what?

Hasn’t has been a tough season for the NFL: from anthem protests to “Fire the Sons of B**ches!;” from CTE to declining TV ratings#? Won’t many older fans get ticked off? Isn’t it better for a league whose ownership and fan base is seen as right-of-center to keep quiet about the environment and climate?

No, it is not.

And, again, I say this from a business building, not from the “it’s the right thing to do” point-of-view.

It is a 2016 conversation with an NFL marketing executive who preferred to remain anonymous that sticks with me. He said the one thing that kept him and his colleagues up at night the most was how to attract Millennial and Generation Z fans and keep them.

One thing that resonates with younger cohorts is the environment and climate: across the political spectrum, the 35-and-under set accepts the reality and seriousness of climate change at rates far greater than their older counterparts.

Will embracing climate and the environment be the main catalyst to turning the tide the NFL’s young fan problems? Of course not. This is a complex, multi-factorial problem and going BIG on the environment is, admittedly, not close to the most important potential solution.

But, it says here that an intelligent, clever environmentally-themed PSA will be well-received among Millennials and Gen Zers. Which would help.

Budweiser and Stella Artois, hardly fringe, left wing brands, believe leading with the environment is the right way to go. Will the NFL join them by airing a green PSA on Sunday? I wouldn’t bet* on it.

In the meantime, buy a Stella chalice and (responsibly) enjoy a Stella or a Bud in it on Super Sunday.

 

 

^ A sports event can claim “Zero-Waste” status by diverting 90 percent or more of its game day waste from landfill, most often by a combination of recycling and composting.
* I also am not betting on the game itself. My prediction? Patriots 24, Eagles 17. I hope I am wrong.
# NFL TV ratings have declined over the past three years but it still generates, by far, the biggest television audience — and not only in terms of sports programming.

 


 

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