Source: WSJ, Tripp Mickle
October 14, 2014
Heineken USA has signed a four-year sponsorship agreement to become the official beer of Major League Soccer starting next year, taking a spot Budweiser has had for nearly two decades as one of the league’s top sponsors.
The four-year deal is valued at more than $40 million, including with media and marketing commitments, according to people familiar with the agreement. It gives Heineken its first national sports marketing platform in the U.S. and deepens its ties to soccer, a sport it has used to promote its brand overseas.
Heineken, a unit of Heineken Holding NV, hopes affiliating with Major League Soccer, or MLS, can reinvigorate its flagship brand’s U.S. sales, which have declined 3.8% from 2008 to 2013, according to Euromonitor International.
Heineken has sponsored the European Champions League, which features top teams like Real Madrid and Chelsea Football Club, since 2005.
“We’ve been looking for a national engagement platform for the U.S. consumer linked to our heritage,” said Nuno Teles, Heineken USA’s chief marketing officer. “[MLS is] the perfect match of what the brand stands for as a European import.”
The deal represents a major revenue increase in the beer sponsorship category for MLS.
Heineken will pay more than $3 million annually for rights to MLS, according to people familiar with the matter, more than three times the estimated value of those rights previously.
Budweiser paid approximately $3.5 million annually for rights to MLS, U.S. and Mexican national soccer teams, according to people familiar with that agreement.
Heineken and MLS declined to discuss financial terms of the deal.
The sponsorship increase comes after a summer dominated by soccer. The U.S. national team, which featured several MLS players, captivated the country during the FIFA World Cup in Brazil and led to massive viewing parties filled with fans decked out in red, white and blue.
MLS next year will add new franchises in New York City and Orlando, Fla. It has also begun three new broadcast agreements with ESPN, Fox Sports and Univision.
“It is an inflection point in our growth,” said Gary Stevenson, MLS president and managing director of business ventures.
“The fact that a brand like Heineken recognized the confluence of those things is rewarding for us.”
Mr. Teles said Heineken research shows there are 70 million soccer fans in the U.S., and soccer fans are 50% more likely to drink imports than other sports fans.
“Being Heineken, the leader of the European import segment, from a commercial standpoint there’s a strong link,” Mr. Teles said.
MLS is in talks about the sponsorship rights to the U.S. and Mexican national teams with MillerCoors LLC and Budweiser’s parent company, Anheuser-Busch InBev, according to people familiar with negotiations.
It is expected to close a deal for those sponsorships before the end of the year.
Mr. Teles said Heineken wasn’t interested in those rights.