December 20, 2010 4:05 PM

The Beer's Gone Bad: Anheuser-Busch, MLB Sponsorship Dispute Gets Nasty

Posted by Tom Huddleston Jr.

Cold beer and baseball are usually a good pair. Recently, though, a dispute has been brewing (no pun intended) between beer maker Anheuser-Busch In-Bev and Major League Baseball Properties over a sponsorship deal.

Last month, the beer company, advised by Howrey, sued MLB, claiming that the organization breached a renewal agreement that would have extended Bud Lite's reign as baseball's official beer. Now, MLB is fighting back, according to this story from The Am Law Litigation Daily, a sibling publication.

With Proskauer Rose advising, MLB has filed a counterclaim in Manhattan federal district court, accusing Anheuser-Busch of fraudulent inducement and bad faith. The organization says it was upset to learn of a similar sponsorship deal between A-B and the National Football League, one that reportedly is worth more money than the MLB deal. (According to The Wall Street Journal, the NFL's sponsorship deal is worth $1.2 billion over six years.)

At issue is a document signed by both parties in April addressing Busch's official sponsorship of baseball. Busch alleges that the document is a binding contract, while MLB's lawyers claim it constitutes a nonbinding letter of intent.

MLB claims it was told by A-B that it would remain the suds-maker's "top, number one sports priority in the U.S.," only to see the NFL receive a better pour with its deal. MLB says it only agreed to the deal because of this assurance. Further complicating matters is MLB's claim that A-B has sent letters to rival beer companies, touting its exclusive contract with the professional league in order to discourage competing bids.

MLB's counterclaim, filed December 9, is seeking a declaratory judgment that the letter of intent is nonbinding.

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