- Shanthal Perera
- Feb 22, 2016
Toronto traded in its autumn colours for a sea of blue this fall as baseball captured the city’s imagination after a 25-year absence. The Toronto Blue Jays pulled off one miraculous comeback after another, until they met the Kansas City Royals in the American League Championship Series.
While the Blue Jays may have missed their fairytale end this season, their very existence is a fairytale of its own; built on a marketing exercise that had a big pay-off. At the centre of that fairytale is Don McDougall, MBA’61, who was the president of the Labatt Brewing Company between 1974 and 1979. He was retelling the story at Ivey’s HBA elective course “Sports & Entertainment Marketing,” taught by his son Colin McDougall, MBA’06.
Problems in Toronto
In the early ’70s, Labatt Breweries was one of three major breweries in Canada. When McDougall began his presidency in 1973, Labatt was considered the weak sister to Molson’s and Carling.
In the age before analytics, the brewing industry was on top of its numbers.
“We had sales, by store, in every store in Ontario available to us by noon on Monday for the previous week, down to the second decimal place,” according to McDougall. “So, Elliot Lake went from 33.67 to 34.29 last week. We had that kind of data.”
Labatt’s research indicated that their market share nationally was declining. With limits on price changing, promotion and advertising, the culture of the entire industry was market share. A closer look at the numbers helped Labatt pinpoint the problem to Toronto.
We didn’t start off looking for a baseball team
Their competitors had allied themselves with strong sporting brands:, Molson with hockey and Carling with Canadian football but there was a vacuum. While Toronto had a long legacy of baseball, the professional league had declined by the 1960s. Yet, just as McDougall was taking the helm at Labatt’s, talk of bringing baseball back to Toronto was starting to pick-up, led by Paul Godfrey, former Chairman of Metropolitan Toronto.
Sensing the unique opportunity, Labatt decided to associate themselves with those pursuing a baseball franchise for Toronto, however, their early successes didn’t culminate in a win. In early 1976, Toronto was hours away from securing the San Francisco Giants but the deal fell through and McDougall and the team were devastated.
Like any sporting fairy tale, the tide turned quickly. Inside three days, McDougall and Herb Solway go from a beach in Florida, to meeting owners of the National and American League in New York, to a press conference in Toronto, where Labatt announces that they are pursuing an American League Baseball team.
McDougall had to receive approval from Labatt board of directors who had not approved of the company owning a baseball team but only associating themselves with those pursuing the initiative. The board’s approval came with strong conditions, noting that Labatt couldn’t own more than 45 per cent, had to tie up advertising rights for 20 years and agree to sell their interest in five years.
There was a counter offer by packaging company allied with Carlings, but McDougall and the team had put together a compelling package to secure Toronto a baseball franchise. But did the Blue Jays solve Labatt’s market share problem? Four years after the situation analysis, Labatt became the top brewery in Ontario and Canada. In fact, a closer look at the numbers showed gradual progress from the time Labatt made their intentions known for pursuing a baseball team in 1974.
“We saw tangible evidence even before we won anything… we got credit for doing something good,” said McDougall who notes the entire exercise was an inexpensive marketing program with major payback.
McDougall’s key learnings from the entire experience:
- The importance of conducting a Situation Analysis
- Timing is important
- Don’t treat setbacks as failures but as opportunities for new creative thinking
- Don’t celebrate too soon
- Once you have a plan in place; focus, focus and focus
After winning the war for a baseball team, McDougall and Labatt had to battle the CBC to get the Blue Jays on national television, where there were reservations that showing the American League might water-down the product. That became a moot point after Labatt secured rights for the Championship Series and World Series.
Eventually Labatt began producing its own television show through TV Labatt, which became TSN and sold for millions. McDougall calls it one of the unintended consequences of the whole exercise.
“You don’t know when you start down these roads where they may lead when you’re open to opportunity and you pursue them aggressively. There’s unintended consequences both ways though, some wins and some losses,” said McDougall.
The Toronto Blue Jays story is covered in detail in the award winning documentary “What If? The Unlikely Story of Toronto’s Baseball Giants” by Fadoo Productions.