Did Anheuser Busch & Pepsi Capitalize on Super Bowl 50?
Another year and another Super Bowl has come and gone. Super Bowl 50 was quite underwhelming primarily because of poor quarterback performances due to dominating defensive performances. Many people were elated to see Peyton Manning win his 2nd Super Bowl – 200th game of his career – creating a storybook ending for one of the best NFL quarterbacks (it is expected that Manning will be retiring).
Not everyone was excited to see the Denver Broncos win. Carolina Panthers’ quarterback Cam Newton is being criticized for being a sore-loser and not finishing his post-game press conference. It appears that many people in the media and public find it unacceptable that a player who just lost the biggest game of his career is emotional and wants no business doing a press conference not long after his offensive line couldn’t provide him time to do any quarterbacking.
Even Peyton’s bother, and Patriot slayer, Eli was upset that the Broncos won the game. He no longer can hold over his brother that he has more Super Bowl victories at the Manning family Thanksgiving dinner. If you don’t believe me, here is Eli Manning’s reaction when the Broncos scored a touchdown in the 4th quarter to put the game away:
That is the look of a younger brother who just accepted that his brief time of being his parents’ favorite is officially over.
That’s enough football coverage; let’s discuss business. Two of the NFL’s largest and most recognizable sponsors, Anheuser Busch InBev (BUD) and Pepsico Inc. (PEP), both had their products and brands prominently displayed throughout the entire sporting event.
Anheuser Busch had two memorable commercials (not necessarily in a good way), one being the Amy Schumer & Seth Rogan “Bud Light Party,” and the other being an ironic Budweiser commercial with Dame Helen Mirren guilting people for driving drunk.
Pepsi was the sponsor for the Super Bowl 50 Halftime Show, starring Beyonce, Bruno Mars, and featuring Coldplay. Actually, the Halftime Show was promoted as featuring Coldplay, with special guest appearances by Bruno Mars and Beyonce. However, Beyonce, and to a slightly lesser degree Bruno Mars, thought otherwise and stole the show.
Pepsi also had an awesome commercial starring musician Janelle Monae, where she time traveled and danced her way through different musical eras. If you do not know who Janelle Monae is, I would strongly advise you to Google her.
Anheuser Busch and Pepsi’s Relationship with the NFL
Both beverage companies signed deals with the NFL to be the league’s official drinks. Anheuser Busch first signed a deal in 2011 (to last through the 2017 Super Bowl) to have Bud Light be the official beer of the NFL, replacing Coors Light, which was valued at $1.2 billion. In November 2015, Anheuser Bush renewed its contract for another six years through the 2022 season, which is valued at $250 million a year, or $1.5 billion in total.
Pepsico also renewed its partnership with the National Football League in 2011, signing a ten-year contract that started in 2012. According to a report from The Wall Street Journal, this sponsorship deal was valued at $2.3 billion over the course of the contract.
With both companies spending billions of dollars over the term of their respective contracts, the question becomes this: does being official NFL sponsors translate to increased revenues?
In terms of measuring an immediate impact of yesterday’s game, shares of BUD are currently down on the day over 3%, and share of PEP are down as well, but only 0.39%. To determine if there have been any long term effects on growth, let’s take a look at some graphs.
Here is a graph of Anheuser Busch’s quarterly revenue and growth rate since its 2006 Q4:
And here is a graph of Pepsico’s quarterly revenue and growth rate since its 2006 Q4:
Both Anheuser Busch and Pepsico saw an increased growth rate before their newly negotiated deals, and have relatively flat-lined since. An interesting correlation to note with Pepsico’s quarterly revenue figures is that the company’s best performing quarters since 2011 have been their fourth quarters, which run during the same months as the NFL season. Anheuser Busch, on the contrary, does not have the same noticeable spikes in quarterly revenue.
Another interesting fact about these statistics is that the Super Bowl itself does not have a drastic impact on revenues. The February date of the Super Bowl aligns with both companies’ first quarter, which, since 2011, has been the lowest revenue generating quarter. This, of course, should not be too much of a surprise since one sporting event cannot have that much of an impact on a company’s revenue.
Final Thoughts
It may appear at first glance that both companies can save billions of dollars over the course of the next six to seven years by not having to pay the NFL to be an official sponsor. With that being said, revenues have not declined since becoming official NFL sponsors and renewing their contracts, and instead have both grown and stabilized.
Having constant exposure in all different formats during America’s most popular season of sport is something that both Anheuser Busch and Pepsico deem indispensable, and are willing to pay for without hesitation.
Spending $1.5 billion and $2.3 billion over six years for companies that generate tens of billions of dollars in annual revenues is essentially chump change. The only thing to expect moving forward with Anheuser Busch, Pepsico, and the NFL is that as the league continues to be the most popular sport in the nation, these official sponsorship deals will only continue to become more and more expensive.
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ANHEUSER-BU ADR (BUD): Free Stock Analysis Report
PEPSICO INC (PEP): Free Stock Analysis Report
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