The $50,000,000 port in a storm?
By Ted Wright May 14, 2010
So I was watching the movie 2012 the other day. The plot of this movie is that, except for Africa, the habitable parts of the world are destroyed by the chaos of a natural disaster. The heroes of the movie and a bunch of rich and powerful people ride on an ark to Africa and live happily ever after. I’ve also been rereading Bob Garfield’s Chaos Scenario so all of this recent media input was swirling in my brain when it was announced that Anheuser-Busch was buying the rights to the NFL for $50,000,000.
AB is not stupid.
So there was a time in the recent past when, if asked, I would have categorized AB’s marketing as out of date, stuck in it’s own inertia or maybe even sucktastic. The days of “better creative” and “more TV” as the answer to selling more beer were gone and AB had not kept up with the times. No more. Those that followed the old path are gone. AB is back and making what I consider very good decisions. From the most senior levels on down, AB not only “gets it” but is acting on that knowledge.
So why did AB buy the NFL rights?
Globally, land in Africa is really cheap now because there are lots of other places for people to live that are more politically stable, less war ravaged, more developed, just better for a variety of reasons. Not always the case but, in many places, very true. Thinking back to the movie 2012, it stands to reason that with the rest of the world underwater or destroyed, African land just got a whole lot more valuable. I was wondering if the same thing is true for TV.
The television landscape in North America has been destroyed compared to what is was just 20 years ago. Pick your data point – NBC being sold off because of drastically reduced profit margins, CBS seeking to pay ESPN half a billion dollars to take the March Madness, the dramatic drop in average viewer or whatever else you like but TV is dying quickly. Just like Africa in the movie 2012, football and American Idol are the only two places in the North American TV landscape that are still viable and sustainable options. Americans can still be counted on to show up consistently and in large numbers for the NFL and Idol. That is not true for anything else on TV. The point I am making is that in a television world gone mad, football is probably the safest and more reliable harbor. Is it worth $50,000,000 to be safe? Just ask everyone else who is drowning out at sea and perhaps that is your answer.
What about the data?
Those of you that read my pieces or work with Fizz know that we are very data driven. I don’t know what AB’s net margin per case is and neither do you (unless you are reading this and work at AB, then I say “Hi”). I have an idea what the net margin might be because we do a lot of work in the beer business, but I don’t know. What I do know is that AB does have that data and they crunched the numbers and it worked for them. We know that it worked because they bought the rights AND they are now a very numbers driven culture over there. Whether their assumptions about additional sales generated, increase brand value or other metrics are right, we’ll have to wait and see when their profit announcements come out. What we do know is that they bought the exclusive rights to the last viable piece of TV real estate in the North American market. Now we’ll find out what they will do with that advantage. It will be interesting to watch.