Coors Light Not A Lame Duck Sponsor, Ready to Reallocate says MillerCoors CEO
As news broke yesterday that MillerCoors had officially bowed out of negotations to renew its NFL sponsorship, the company's top brass were on its first quarter earnings call. Given the fact that execs had trumpeted the value and competitive advantage of the NFL deal with analysts in past quarters, Deutsche Bank's Marc Greenberg was understandably curious about the move and due to the timing, had the chance to get instant feedback on the breaking news. The party line: the company will activate fully through the upcoming season and focus will shift to the company's 22 existing team deals. Most importantly for other properties, the decision frees up marketing funds and allows the company to "a significant amount of money to re-allocate." Here's MolsonCoors CEO Leo Kiely on the call:
Marc Greenberg - Deutsche Bank AG: During the call, some press reporting that MillerCoors has bowed out of the NFL sponsorship. Particularly curious here, as over the years you have talked about how important that's been to Coors Light and its growth..."
Leo Kiely: Yes, Marc. It is no secret that the trademark negotiations for the NFL marks was up for renegotiation starting with the 2011, 2012 season. So that's -- that's a year away. Until midnight last night, we had a -- what we felt was a full value offer on the table that expired at midnight. That story broke on us this morning. This was a long-term decision based on our sense that the NFL marks were fully valued. And we look at each of those situations one up and one at a time. The two important points to remember. First -- first of all, we have a full season ahead of us, where we're fully committed to in 2010 and 2011, activating behind those marks on Coors Light before there's any change. Secondly, as you probably know, we have several -- in fact, Tom may even have the number, of very successful programs and activations with teams in our key markets, and those -- those have in some cases multiple years left on those activations. So we're comfortable with this. I don't think it's going to cost us anything. I think the question is how do we get smarter about how we spend those dollars and activate them behind the portfolio.
Marc Greenberg - Deutsche Bank AG: I guess when I was talking about cost, I was really alluding to what kind of dollars may come back into the marketing portfolio as a consequence of not spending behind the NFL.
Leo Kiely:..we don't know, by the way, where the NFL's finally going to come out on this. So, I mean, I have to be very careful and respectful about that, but it gives us a significant amount of money to reallocate. And our judgment is we can reallocate it long-term more effectively, activating our innovation and a full mix of properties. In fact, I think it's an opportunity that's different for us as a new company than it was as Coors. NFL's a great property. We're not running away from the NFL. We have tremendous advertising commitments there and we'll continue to. This is really how you activate trademarks and brands and these are decisions you have to make. I feel really confident about it.