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‘Well, This Is Awkward…’: FIFA–Budweiser Deal Brings Commercial Sponsor Rights in Sports to Light | Chicago Popular

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On November 18, days before the start of the 2022 Qatar FIFA World Cup, Anheuser-Busch InBev (the owner of Budweiser, a sponsor of the World Cup since 1985) received an unexpected yellow card: FIFA issued a statement that seemed renege on certain terms of their $75m (£63m) commercial sponsorship deal.

Budweiser and FIFA had agreed to a commercial sponsorship deal which, in addition to the ubiquitous logos and banner ads we expect to see at sports tournaments, included an exclusivity deal for Budweiser to sell alcoholic beer in the eight stadiums participating in the World Cup in Qatar this year. However, just two days before the start of the global tournament, following discussions with the Qatari government, FIFA announced that no alcohol would be available in any of the stadiums, except in the corporate suites.

There will be inevitable financial consequences for Budweiser, the severity of which will depend on a number of commercial, logistical and contractual factors, including whether the contract involved a change in policy of this nature. Some of the considerations include

  • how revenue was structured under the trade agreement;
  • what, if anything, can Budweiser do with the surplus stock already in Qatar (is the announcement that Budweiser will give away the beer to the winning team to be believed?);
  • how quickly Budweiser can ramp up the local stock of non-alcoholic beer;
  • if Budweiser raises a breach of contract dispute; And
  • which compensation could be negotiated with FIFA.

While not a completely arid country, Qatari alcohol sales and consumption were already strictly regulated. For many observers, both local and from neighboring Gulf and Asian countries, alcohol consumption at this year’s World Cup at the levels seen at previous World Cups may have come as a shock.

As global sporting events, including the World Cup and Formula 1 racing, become ever more geo-diverse, cultural and geopolitical issues of this nature could become more prevalent. Potential sponsors will need to mitigate the risk of last minute changes in local policy by establishing clear contractual remedies in their sponsorship agreements. Most standard force majeure provisions or legislative changes are unlikely to be drafted to explicitly anticipate sudden and dramatic changes of this nature.

Global sporting events bring an array of new and existing sponsors, sports governing bodies, and local and national governments that potential sponsors will need to navigate. This is something sponsors of the 2026 US-Canada-Mexico World Cup and the 2028 Los Angeles Olympics will need to be ready for.

Legal commentators will be watching this space closely to see if Budweiser takes legal action against FIFA. However, in the short term, it’s clear there is still value in the endorsement deal for Budweiser. In addition to showcasing its branding throughout the tournament, which helps drive sales in other countries, Budweiser will continue to sell both alcoholic and non-alcoholic beers in FIFA Fan Festival areas and other licensed venues.

Additionally, Budweiser’s response on social media has garnered tremendous publicity outside of the tournament. The brand’s continued wit on social media has generated a legion of fans, proving that you really can make the best of a (potentially) bad deal.

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Written by Natalia Chi

Chicago Popular; Chicago breaking news, weather and live video. Covering local politics, health, traffic and sports for Chicago, the suburbs and northwest Indiana.

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