Carlsberg Canada and Toronto F.C. end partnership

NOTE: This story was updated on Nov. 2, 2012 Toronto F.C. and Carlsberg Canada have terminated a sponsorship agreement that dates back to the club’s inaugural Major League Soccer season in 2007. Carlsberg issued a news release earlier this week stating that it was not renewing its sponsorship agreement with the team after six years […]

NOTE: This story was updated on Nov. 2, 2012

Toronto F.C. and Carlsberg Canada have terminated a sponsorship agreement that dates back to the club’s inaugural Major League Soccer season in 2007.

Carlsberg issued a news release earlier this week stating that it was not renewing its sponsorship agreement with the team after six years as the club’s official beer. “It’s been a very positive relationship, but ultimately we’ve decided to move to sponsor other programs and events,” said Nick Relph, Toronto-based marketing director, North America, with Carlsberg.

In an email statement to Marketing, David Hopkinson, senior vice-president, business partnerships for Toronto F.C. parent Maple Leaf Sports and Entertainment said the two parties “mutually agreed” not to renew the sponsorship at the conclusion of their six-year agreement.

The statement touted Carlsberg as a “wonderful” partner, but said there was a collective recognition that “it was the best time to seek a new beer company sponsor with an extended reach” in markets where Toronto F.C. plays.

Unconfirmed rumours are circulated that that company is Budweiser, although no formal announcement is forthcoming. Labatt, which brews and markets the Budweiser brand in Canada, did not respond to a request for comment.

Carlsberg’s sponsorship agreement with Toronto F.C. included signage and pouring rights inside the club’s home stadium, BMO Field. It also used Toronto F.C. marks for in-store promotion with the LCBO and The Beer Store, as well as on-premise marketing.

Relph told Marketing that the association was “very positive” for the beer brand, which increased its year-over-year sales volume at BMO. Research also found that 30% of consumers in the Toronto market identified Carlsberg as the brand associated with Toronto F.C.

“That’s fairly significant because soccer doesn’t necessarily reach every consumer in the Toronto market,” said Relph. “To see that reflected in our analysis is very positive for us.”

If it was Carlsberg’s decision to leave Toronto F.C., it does seem at odds with a global sponsorship strategy that continues to emphasize soccer. The brand currently sponsors both Arsenal and Liverpool of the English Premier League, while Relph said that another sponsorship announcement, this one associated with European soccer but featuring Canadian aspects, is also forthcoming.

Bob Stellick, president of Toronto-based sports marketing firm Stellick Marketing Communications, speculated that Carlsberg would be reluctant to walk away from highly lucrative pouring rights at BMO Field.

“It’s one thing to be a sponsor and [not] want your brand associated with something you don’t feel elevates your brand, but they’re making a lot of money selling beer,” he said. “Pouring rights are what everybody wants in sports because they know that no matter how bad Toronto F.C. is, people are still buying $13 beers. Maybe more.”

At the same time, he said, Carlsberg may have become tired of paying to associate itself with a lacklustre property like Toronto F.C., which finished last in all of Major League Soccer this past season with a 5-21-8 record.

“When teams do well, people overpay for the right to be associated with that euphoric brand, and when things go badly it can turn the other way,” said Stellick.

Relph, however, said that neither Toronto F.C.’s on-field performance nor the recent sale of MLSE to a consortium owned by Rogers and Bell factored into the beer brand’s decision. “We just came to the natural end of our contract and felt we were at a crossroads and it was time for us to start looking at other opportunities,” he said.

Carlsberg recently announced a three-year sponsorship agreement with Boulder, Colorado-based Spyder Active Sports, a manufacturer of premium technical ski and active mountain lifestyle apparel. “It’s going to be something we can really build a platform on,” said Relph.

Carlsberg was probably not benefiting significantly from its association with Toronto F.C. outside of BMO Field, said Stellick. “I don’t think they believe that the Toronto F.C. association sells them a lot of beer outside of the stadium right now,” said Stellick. “A Toronto F.C. in-market promotion right now wouldn’t move the needle a lot.”

The parting was likely motivated by dollars, he said. Beer sponsorships tend to command top dollar, he said, because beer companies can recoup so much of their marketing investment in stadium sales.

Stellick pegged the value of the Carlsberg sponsorship at $500,000-plus. “They would have been part of the deal when things were really strong there, and there’s no question they’re selling hundreds of thousands of beers [at BMO Field] in a year.” It also enables customers to sample the beer, albeit at a premium price, said Stellick.

If rumours that Budweiser is a new Toronto F.C. sponsor are true, Stellick said it’s unlikely the brand will be looking to significantly leverage its sponsorship beyond pouring rights in the near-term. “I don’t think anybody’s going to be looking for their Toronto F.C. glass in a case of Budweiser right now,” said Stellick.

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