Watching a baseball game on television means you don’t hear the familiar refrain, “Get your Ice-Cold Beer here!” from concession workers coming from the crowds. And you don’t see professional ballplayers featured in the many beer commercials that air during the game, because in most sports, such shilling is frowned upon. (The National Football League outright prohibits it.) But that’s all changing now, as Anheuser-Busch InBev (NYSE: BUD) completed a marketing agreement with the players union of Major League Baseball to start allowing current players to appear in its ads. It reached a similar deal with the National Basketball Association’s players union, and it’s likely that others will follow soon.
It’s the first time in 60 years that sports stars will be free to appear in a commercial for an alcoholic beverage, though you won’t see players holding or drinking beer. That’s still going a bit too far.
Allowing players to appear in beer ads was a change that was bound to happen. For Anheuser-Busch, it was absolutely imperative, as it needs something to make its beer more relevant to consumers. Although global revenues rose nearly 5% last quarter, like much of the rest of the beer industry, U.S. shipments and volumes continued their years-long decline. Year to date, U.S. sales-to-wholesalers were down 4.8%, and sales to retailers were off 3.2%. It says something when A-B loses 35 basis points of domestic market share in the quarter and CEO Carlos Brito says that was the company’s “best quarterly market share performance in almost four years.”
The other sports leagues need this, too. Although viewership of basketball games rocketed to a four-year high for the 2017-2018 season, baseball game viewership was down 6% last year, and football TV ratings tumbled 10% in 2017, following an 8% decline the year before. Attendance is also suffering, with baseball having its lowest average in 15 years.
The leagues have softened their stance on alcohol advertising in recent years, giving players new ways to get into the public eye. Where baseball and hockey have allowed distillers to advertise spirits within the broadcast camera’s view during the games for years, the NBA only allowed it beginning in 2009, following the Great Recession. It wasn’t until last year that the NFL allowed spirits to be advertised on TV during its games.