How Labatt’s marketing play gave birth to Jays

Special to Western News

At the centre of the Blue Jay’s birth was Don McDougall, MBA’61, then President of the Labatt Brewing Company, who gambled on bringing a Major League Baseball team to Toronto. McDougall recently addressed students in the Sports & Entertainment Marketing course at Ivey Business School

Toronto traded in its autumn colours for a sea of blue last 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 last 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 was Don McDougall, MBA’61, who was the President of the Labatt Brewing Company between 1974-79.

In the early 1970s, 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.

But in the age before baseball analytics, the brewing industry was on top of its numbers.

“We had sales figures, by store, in every store in Ontario available to us by noon on Monday for the previous week, down to the second decimal place,” McDougall said. “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.

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. McDougall and the team were devastated.

Like any sporting fairytale, the tide turned quickly. Inside three days, McDougall and Herb Solway go from a beach in Florida, to meeting owners in the National and American League in New York, to a press conference in Toronto, where Labatt announced they are pursuing an expansion American League baseball team.

McDougall had to receive approval from the Labatt Board of Directors. They had not approved of the company owning a baseball team – only associating themselves with those pursuing the initiative. The board’s approval came with strong conditions: 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 counteroffer by a packaging company allied with Carlings, but McDougall and the team had put together a compelling package to secure Toronto a baseball franchise.

On April 7, 1977, the Jays organization played its first game against the Chicago White Sox in front of 44,649 at Exhibition Stadium in Toronto. While opening with a 9-5 victory, the Jays finished seventh in the American League East with a 54-107 record, 45 ½ games behind the New York Yankees. The Jays would win its first World Series 15 years later.

But did they 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 noted the entire exercise was an inexpensive marketing program with major payback.

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 later 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,” McDougall said.

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.