Diageo not prepared to get drawn into Premier League bidding war

Diageo is prepared to submit a bid to make Guinness the title sponsor of the Premier League but will not enter a bidding war with rivals, The Drum understands.

The drinks maker is understood to have put its Guinness brand in the frame to land the lucrative rights alongside several companies. Mastercard and Ford are among a hatful of companies standing in Diageo’s way, according to Sky News, while a global snacks company is also said to have made early inquiries.

Diageo sees the potential in the Premier League to accelerate Guinness' expansion worldwide, particularly in Africa where the drink is popular. The business is some way through a global refresh of the stout, targeting younger drinkers since 2013 through its “Made of More” strategy.

Chief executive Ivan Menzes hinted a wider football push for Guinness was on the cards as early as 2013 when he revealed plans to upweight marketing around football and rugby.

A Diageo spokeswoman said: “With global brands such as Guinness, Smirnoff and Johnnie Walker, sponsorship plays an important role in our marketing activities. We look at opportunities all the time so as a rule we do not comment on speculation.”

Any potential deal could signal the end of Carlsberg’s ties to the league, which were only formed in 2013. Industry observers believe that given the “big fee” Diageo would have to cough up to secure the title sponsorship then it would be higlhly unlikely that a rival would remain on the same roster.

Andy Clilverd, commercial director at sponsorship media agency Sports Revolution, said: “I would imagine that a Guinness deal would supersede Carlsberg’s and mean that it would exit. If a title sponsor comes in and there’s a conflicting brand at a lower level then what usually happens is the smaller deal is terminated. That’s a balance the Premier League have got to sort out. They need to asses what would they lose from Carlsberg. Are Diageo going to be paying more than a snack brand that might be out there that wouldn’t conflict with anything?”

Further complications could arise due to ongoing concerns around alcohol brands sponsoring sports events. Health experts and consumer action groups have repeatedly urged the Government to ban the involvement of alcohol in sport.

The flurry of brands linked to the Premier League stokes long-running rumours that Barclays could walk away from the event next May after 15 years. It penned a three-year extension in 2012, reportedly worth £120m, 50 per cent higher than its previous deal. Barclays has not yet announced its plan for the league, which forms part of a wider sponsorship review that has seen it axe a number of deals

Premier League chief executive Richard Scudamore has successfully turned it into one of the world’s premium sports brands during his 15-year tenure. The last auction for broadcast rights in 2012 generated more than £3bn in UK TV fees alone, a 70 per cent increase on the previous deal. BSkyB paid £760m a year to broadcast 11 live matches, while new entrant BT spent £346m a year for 38 games. It is likely Scudamore will look for similar gains from the next title sponsor, whoever it ends up being.

Clilverd said: “When the Premier League bosses sit down and see clubs like Liverpool and Manchester United are getting £20m or £40m a season from shirt deals it puts a big expectation on the league’s commercial team to get a lot more from whoever sponsors it next.”

The title sponsorship is expected to be announced later this year.

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