Budgets for sports sponsorships will be down this year as many companies struggle with declining demand, and even two major brewers — whose industry has held up better than most — do not plan to pick up the slack.
“We all know that we’re facing a tough 2009,” Keld Strudahl, international marketing director for Danish brewer Carlsberg Breweries, said on Wednesday.
Strudahl and a MillerCoors marketing executive told Reuters the beer sector has been more resilient than others, but they are not looking to add to their portfolios of sports deals.
“We’re not going to go out and spend on new activities,” Strudahl said at a conference hosted by IEG, a unit of ad giant WPP Plc (WPP.L) that tracks sponsorship spending.
Carlsberg, with several soccer sponsorships in Europe, spent a record amount on marketing last year, and that figure will drop this year due to fewer planned activities, Strudahl said. Sponsorship of the European soccer championship last year alone cost the company more than $20 million, according to reports.
“It’s very tempting,” he said of the opportunity to sign new, low-cost deals. “There should be opportunities, but it’s also important we clean our own house.”
Carlsberg, whose other brands include Tuborg and Baltika in Russia, has been hurt by weakness in the Russian beer market, where the brewer derives around half its profits, and the weak Russian ruble.
The beer sector’s support is critical to the global sports industry, which also counts Anheuser-Busch InBev (INTB.BR) a major financial backer, because growth is slowing or declining in most other sectors.
In January, IEG said the U.S. recession would lead North American companies to slam the brakes on sponsorship spending in 2009, especially for sports, leading to the smallest growth rate since the research firm began studying such data.
North American companies are expected to increase spending on sports, arts, cause and entertainment marketing by just 2.2 percent to almost $17 billion, IEG said. Last year, spending rose 11.4 percent.