Out of its league...
This season will be the last FA Carling Premier League after the drinks giant pulled the plug on its sponsorship. Ben McFarland looks at the reasons behind the decision.
Last week, Carling withdrew from sponsorship talks with the FA Premier League and opened the way for Budweiser to sponsor top-flight English football for three years, starting from next season.
It was reported that the parent company Bass decided to pull the plug on negotiations after becoming impatient with the "current protracted negotiation process". Mark Hunter, Bass Brewers' marketing director, said: "We first presented a bid back in September and understood that it would finally be tabled at a meeting on January 18 so that club chairmen could make a decision. This didn't happen, so we can't let this indecision affect other plans for Carling. This is why we are moving forward with other initiatives."
Closer examination, however, would suggest that there was more to the announcement than meets the eye. It would be hard to believe that a bunch of procrastinating league officials and chairmen would be enough to end an eight-year association that has helped Carling become synonymous with a game at the height of its renaissance.
A number of factors would suggest that Carling either jumped before it was pushed or decided the financial risks were too much considering the current uncertainty surrounding Bass Brewers.
Since 1992, Carling has become the first and only lager to reach one billion pints in a year, and currently sells 2.8 million pints a day. It has enjoyed a lucrative hotline to its core target audience and has been able to directly target the 3.4 million pub-goers (predominantly males aged between 18-35) that watch football in pubs every week while only metres from the bar!
The brand has, until now, been extremely committed in its football-related promotional activity in the on-trade as well as elsewhere and has forged a strong working relationship with the game's top flight.
LoyaltyIt was widely reported that the 20 FA Premier League chairmen were keen to reward Carling for its loyalty over the last eight years rather than opt for the highest bidder.
Why then, when you consider the not inconsiderable benefits of the relationship, did Carling stomp off and take its ball back?
An immediate and logical answer would be that Carling simply wasn't prepared or able to pay the huge sums being demanded by the FA Premier League chiefs this time around. The entire bidding process has been conducted under a shroud of secrecy.
Neither the 20 Premier League chairman nor Carling were informed of the identity of rival bidders during the meeting last week, and the speculation surrounding the potential winners is just that.
Budweiser refuses to confirm or deny its involvement either way while a spokesperson for Coca-Cola said the soft drink giant was merely "monitoring the situation".
However, if unsubstantiated newspaper reports were to be believed, the rival challengers for the three-year deal were substantially outbidding Carling. A leading Sunday newspaper claimed that Budweiser had submitted a bid of £60million, Pepsi Cola and Coca-Cola had offered £50million each, while Carling had only offered £40million, but was reported to be upping that bid to £75million. Other figures bandied around suggested the largest bid was likely to be nearer the £45million mark.
Even in its most modest form, these figures represent a huge commitment for a brand with an entire annual marketing spend of £33million and signalled a massive increase on the £36million it paid for the deal four years ago.
The longer negotiations went on, the more it seemed Carling was punching above its weight, and it was clear that it was relying on the benevolence and loyalty as opposed to the avarice of the 20 Premier League chairmen.
However, with the FA Premier League television rights being sold all over the world, league chiefs were apparently anxious to get a brand on board capable of strengthening the league's profile overseas.
Budweiser, Pepsi and Coca-Cola are all able to translate global exposure into increased sales abroad, while Carling can only get a return on its considerable investment within these shores. The stakes had been raised even further following changes to the broadcasting agreements next season that meant the next title sponsor would also receive greater visibility as part of the new deal.
Sky TV announced that it would increase the number of televised matches from 60 to 66 after it paid a staggering £1.1billion for exclusive broadcasting rights until the end of the 2003/2004 season, while ITV is currently trying to renegotiate its £183million three-year deal with the Premier League in a bid to show football highlights as early as 6pm on Saturdays next season.
OpportunitiesThere will also be greater cross-promotional opportunities and several of the league's leading clubs are planning broadband joint ventures with media partners to show games.
Despite claims from both the FA Premier League and Carling to the contrary, the fall-out from the decision by trade and industry secretary Stephen Byers to block Interbrew's takeover of Bass Brewers may well have precipitated Carling's decision to drop out. Although few have been able to break the Interbrew silence since the government's decision, it's clear that the uncertainty surrounding the future of Carling, and Bass brands in general, was bound to have hindered rather than helped its attempt to renew the sponsorship.
The majority of companies reported to be in the running to buy Bass Brewers would almost certainly undergo a grilling from the competition authorities, making it difficult for them to commit to long-term arrangements. The decision to pull out of negotiations also comes at a time when the brand is in the midst of a repositioning programme.
Just before Christmas, Carling unveiled a state-of-the-art font, slick new packaging and launched a new advertising campaign as part of a subtle, yet significant change of direction.
According to Stuart Cain, head of sponsorship and brands PR, "the new advertising campaign positions Carling as more aspirational and special, broadening the brand's appeal beyond our core drinkers".
Although football claims the ability to transcend race, religion and social rank since its rebirth in the 1990s, it's clear that Carling would have found any move away from its traditional "lad" image in favour of a more sophisticated audience harder if it had been tied to the Premiership. In short, with the sponsorship deal up for renewal, Carling chiefs may have decided the time was right to jump ship.
By freeing themselves from the Premiership, Carling will have released a huge amount of money to invest more heavily in "other initiatives" such as the English music scene. Carling already sponsors the festivals at Reading and Leeds as well as the NME Awards and tour.
However, Carling has not burned all its bridges with the game, stating "we are looking forward to continuing to build on activities that will maintain our successful relationship with English football and also move us into new and exciting areas".
It would be foolhardy of Carling to completely ignore the lucrative benefits associated with the game and few would be surprised to see Carling join the likes of Strongbow, Carlsberg, Greene King and Holsten in sponsoring an individual team.
It remains to be seen who will succeed Carling for the title sponsorship.
However, whether it's the hot favourite Budweiser, Coca-Cola or Pepsi, the winner will have to provide huge promotional support and cultivate an intimate relationship with the FA Premier League if it is going to emulate its predecessor.
Furthermore, it will have to muffle the pr
