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MLB, Anheuser-Busch Extend Bud Pact

MarketWatch, August 22, 2012

By Sam Mamudi

NEW YORK – Budweiser and baseball have agreed to extend their decades-long partnership, beginning with Major League Baseball’s latest innovation, the wild-card game.

The so-called king of beers from Anheuser-Busch InBev NV, the official brew of Major League Baseball, will be the presenting sponsor of wild-card games through 2018 as part of a new agreement between MLB and the beverage giant. The deal also has Budweiser taking on two other new presenting sponsor slots: that of MLB’s opening week, as well as a concert series held at the league’s Fan Cave.

The new MLB deal is the Budweiser brand’s biggest sponsorship and extends their 33-year partnership. Though it includes this year’s wild-card games, the six-year pact will formally start in 2013; the last agreement was a two-year deal signed in late 2010.

Analysts at sponsorship-research firm IEG estimate the existing deal costs Anheuser-Busch about $20 million annually, along with another $20 million in promotional commitments. Neither executives at MLB or Anheuser-Busch would comment on the value of the new arrangement, but it’s clear that the company is expanding its investment in baseball. What’s more, it also sponsors 23 of the 30 professional teams.

“We asked the people at MLB what else can we do to promote the sport and connect ourselves with the fans,” said Blaise D’Sylva, vice president of media, sports and entertainment marketing at Anheuser-Busch. “This is our No. 1 platform — baseball is the sport that Budweiser is most heavily invested in.”

The wild-card matchups are sure to garner a high level of interest. The last time there was such a game — when the Detroit Tigers played the Minnesota Twins in a 163rd game in October 2009 — 6.5 million viewers tuned in, according to TV by the Numbers.

This year’s games, the first time baseball’s postseason has been extended to 10 teams, will see the two best runners-up in each league play on Oct. 5 to progress to the division round of the playoffs. Adding to the one-off format’s attraction is that with about 40 games remaining in both the American League and National League, five teams are within five games of making the wild card.

Merch gone wild

The expanded Budweiser deal highlights how baseball in recent years has provided more commercial opportunities for existing and potential sponsors. “There’s a need and an urgency to break through all the clutter … and we think we’ve created an opportunity to allow Budweiser to make that breakthrough,” said Tim Brosnan, executive vice president for business at MLB.

The broadening of commercial partnerships is possible, he added, thanks to the league’s booming business — now more than $7 billion a year.

Merchandising sales are at record levels and park attendance is on course to reach 76 million, the third-highest in league history. The Los Angeles Dodgers club recently sold for more than $2 billion, a record for a franchise in any sport, while new national-television deals are expected to be worth much more than the existing deals with ESPN, TBS and Fox. Read about MLB’s record merchandise sales.

“That success creates the ability to do more [deals],” Brosnan said.

Among the recent expansions in baseball’s slate of partnerships were 2009’s deal with Bridgestone Corp., which became the MLB’s first official tire partner, and Scotts Miracle-Gro Co. signing as MLB’s first official lawn-care company in 2010.

The MLB Fan Cave, an entertainment space in New York City dedicated to all things baseball that opened in 2011, has become a magnet for commercial tie-ups, with close to 50 sponsors and product tie-ins from companies such as Anheuser-Busch and PepsiCo Inc., among others. Read in detail about the MLB Fan Cave.