At Lager-Heads

Harvey McElhannon sells Diamondback Beer, and was the first to file for that trademark. Now Jerry Colangelo and Major League Baseball want him eighty-sixed.

Harvey McElhannon is 65 years old, a tall man with good posture, an open face, a sincere smile and a firm handshake. He is patriotic to a fault, though he'd probably say that no such thing is possible. Hanging on the walls of his office are beautifully framed copies of the United States Constitution, the Declaration of Independence and the Bill of Rights. He often refers, without a whiff of self-righteousness, to his church and the activities that take place there. McElhannon seems to be, and is called by those who know him, a nice guy and a good man.

He just doesn't like lawyers much. He says he's spent too much of his life, not to mention his money, on them, and echoes the widely held sentiment that attorneys exist mainly to line their pockets with money by prolonging conflict, rather than resolving it.

That's too bad for him. Because however good a man he is, Harvey McElhannon is also a man with what may become a very big problem--one that could make the few legal scraps in his past look like nothing more than warm-up bouts.

McElhannon is known in the Valley for his 30-plus years as a successful restaurateur. For years he has owned, among other enterprises, the Pinnacle Peak Patio eatery in north Scottsdale and the T-Bone Steak House in Phoenix. More recently, he purchased the Waterfront, a restaurant that for years was called Charlie Brown's and sits next to a lake in Tempe.

He's put a lot of money into all of his businesses, several hundred thousand dollars into the Waterfront alone of late, and obviously hopes to make it back. Among other things, he is selling his own line of beers, made for him by brewers in Wisconsin and California.

So far, the line consists of just two beers; one is a smooth lager, quite tasty, and the other is a bock, a darker, stronger brew, but also good. Though he is currently involved in a complex legal dispute with two others who claim to be co-owners of Valley Brewing Company, the entity that actually markets his beers, McElhannon hopes eventually to turn Pinnacle Peak Patio, the Waterfront and the T-Bone Steak House into microbreweries, where he and his son will manufacture their own beers on-site.

The beers he sells now, and hopes to sell more of, are called "Diamondback Premium."

Which brings us to McElhannon's problem.
Anyone who follows the business of baseball--or the multiple megadeals that have shaped the rosy financial future of the Valley's new Major League Baseball franchise, the Arizona Diamondbacks--probably recalls what happened last October 9. That day, the new team and the Miller Brewing Company, the nation's second-biggest seller of suds, struck what may be the most comprehensive and lucrative marketing agreement in Major League Baseball.

The deal will span 15 years, an eternity in the sports-marketing business. The Diamondbacks' most visible owner, Jerry Colangelo, has likened it to "a marriage." Although financial terms have not been officially disclosed, people who are supposed to know about such things say the team stands to pocket at least $45 million as a result of the Miller pact. Billboards promoting the Arizona Diamondbacks and Miller Lite beer have already begun popping up all over the Valley--even though the D-backs' first pitch won't be hurled for two more years.

Billboards are just the beginning.
Through the year 2012, Miller will be the exclusive beer advertiser on the team's television and radio broadcasts. Miller ads will also run on video screens at Bank One Ballpark and appear in team publications. Giant signs promoting Miller Lite will be placed in television-friendly spots around the field. Miller will participate in a baseball museum to be built at the stadium.

Scott Brubaker, director of marketing for the Arizona Diamondbacks, says plans are also in the works to build, somewhere on the stadium site, a brew pub. Brew pubs at sporting venues are seen by many as a sports-marketing wave of the future; the Coors Brewing Company, in Colorado, owns and operates an extremely successful brew pub called "The Sandlot" inside Denver's Coors Field, home of the Colorado Rockies.

Brubaker says the Phoenix microbrewery may (and sources at Miller say in all likelihood will) be run by Miller. He also says everyone concerned would like the place to be called the Diamondback Brewery.

McElhannon, however, filed a trademark application for Diamondback Beer with the State of Arizona on March 10, 1995, just one day after the name of the new baseball team was announced. If the trademark is valid, McElhannon--not Miller, not the Arizona Diamondbacks--has the sole right to make and sell Diamondback Beer.

As one might expect, the team and Major League Baseball have since espoused the view that McElhannon is a quick-buck artist, a profiteer seeking whatever the Diamondbacks and MLB will pay to get rid of him. But McElhannon says the timing of his trademark application had nothing to do with Colangelo's baseball team.

Although the date of the trademark application does seem suspiciously convenient, McElhannon has documents--contracts for brewing, packaging and so forth--showing he intended to call his beer Diamondback months before the team announced its name. And all contact he had with the Arizona Diamondbacks--a few uncomfortable calls--took place before the Miller announcement.

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