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Budweiser and ESPN: ‘Buds’ Through the Years

Sep 6, 2004  •  Post A Comment

On Sept. 7, 1979, Budweiser sponsored the first televised sporting event on ESPN, a slow-pitch softball game between the Milwaukee Schlitzes and the Kentucky Bourbons.

This summer, Bud Light distributed more than 300 million 16- and 24-ounce beer cans commemorating ESPN’s 25th anniversary.

The relationship between ESPN and Anheuser-Busch, which owns Budweiser, has morphed over the years, but the network’s first advertiser remains one of its largest today. A-B is one of ESPN’s top five advertisers and a top three advertiser on ESPN and ABC Sports together, said Ed Erhardt, president of ESPN/ABC Sports customer marketing and sales. In the years when ABC carries the Super Bowl, Anheuser-Busch is the largest advertiser, he said.

Anheuser-Busch was the exclusive beer sponsor for the first 15 years of the sports network’s life and was instrumental in getting ESPN off the ground, said Dan Donnelly, senior VP and group director at MediaVest, and for eight years previously an Anheuser-Busch executive. “They had really taken a chance with ESPN when it was not known to anyone,” he said.

Anheuser-Busch’s early position in the sports network lent credibility to ESPN on Madison Avenue, he said.

Win-Win Situation

The relationship served the beer company well, too. Back in 1979, when A-B invested $1 million a year to run two 30-second spots every hour, year-round, on the new network, it had a 25 percent share of the beer market in the United States, said Tony Ponturo, VP of global media and sports marketing at Anheuser-Busch. Now it commands half the market share, he said. “The feeling was we needed to be a major marketer and needed to be where the beer consumer is, and clearly that’s sports,” he said.

As ESPN grew in prominence, it became cost-prohibitive for Anheuser-Busch to remain the sole beer sponsor, Mr. Ponturo said.

While the two brands are no longer dating exclusively, Mr. Erhardt said ESPN often will bring a new idea to Anheuser-Busch before others. For instance, Mr. Erhardt brought the concept of the “Hot Seat” to Anheuser-Busch. That segment has since become the “Bud Hot Seat,” in which “SportsCenter” anchors pepper an athlete with questions. “They immediately recognized it was a good idea and wanted to do it,” he said.

In addition, as ESPN is about to take a programming position in a new sport, it will often gauge how Anheuser-Busch feels about the sport. This was done to great effect with both hockey and basketball.

“When we entered into negotiations for the NBA, an important part of the negotiations was what kind of support Anheuser-Busch would put behind the NBA,” Mr. Erhardt said. The beer company is now one of the official sponsors of the NBA.

ESPN has fashioned multiyear, multiplatform deals with Anheuser-Busch in excess of $70 million per year that include “Monday Night Football,” hockey, ESPN The Magazine, college basketball and ESPN’s quarter-bouncers bar game championships.

Mr. Ponturo declined to reveal the current ESPN ad budget, but said it is in eight figures. The ad spending with ESPN remains stable and has probably grown 5 percent to 10 percent over the past five years, he said.

While the relationship has lasted, it’s not always perfect. As ESPN has ramped up its own on-air promotions in recent years, Anheuser-Busch has had to ensure that its ads don’t run alongside promos where another beer company is mentioned, Mr. Ponturo said.

“We probably still have the mentality that we want to be perceived as their beer. We are still sort of like the oldest son that wants to be perceived as the favorite. Whenever we start to feel that’s not the case, we have a nice conversation,” he said.