Sponsorship Touchdowns
The National Football League, New York City, shook up its sponsor ranks in March with what are believed to be the largest deals in sports sponsorship history: Coors Brewing Co. will pay $300 million to become the league’s official beer sponsor, while PepsiCo agreed to spend more than $160 million to become the official soft drink. The five-year deals took effect April 1, the start of the league’s fiscal year.
Golden, CO-based Coors replaces rivals St. Louis-based Anheuser-Busch (an NFL sponsor for 12 years) and Milwaukee-based Miller Brewing (a league partner for 18 years). Purchase, NY-based Pepsi supplanted Coca-Cola Co., Atlanta (an NFL partner since 1983).
The unprecedented dollar figures (which include estimates for advertising and promotion commitments) shocked many industry experts. “The NFL was pretty aggressive about it, and you’ve got to give them credit,” says Jim Andrews, vp at IEG Sponsorship Report, Chicago. “They said [to Coke and the beer partners], ‘We’ll give you the first option, but we won’t hesitate to work with the No. 2 or No. 3 brands instead.”
Under the agreement, Coors gains rights to use all NFL logos (including those of all 32 teams). “We found out about this very suddenly and struck while the iron was hot,” says Coors spokesperson Hilary Martin.
The agreement with Pepsi, which obtains the same rights, extends to Tropicana orange juice and sister snack unit Frito-Lay. Gatorade, which Pepsi acquired last year, has been an NFL sponsor since 1983.
“We’re creating the world’s largest tailgate party,” says John Galloway, PepsiCo’s director of sports marketing, joking only in part. “We’re in the preliminary stages of determining our strategy, but we’ll be ready to go by opening kickoff.”
Coke, A-B, and Miller are all free to buy ad time during NFL broadcasts and cut deals with individual teams. “Our research indicates [that] consumers don’t connect with national sponsorships,” says Coke spokesperson Bill Marks. Coca-Cola has standing agreements with at least 20 teams. (Pepsi has 10 individual pacts.)
Industry observers agree. “I was surprised Pepsi paid so much,” says Bill Chipps, senior editor at IEG Sponsorship Report. “Fans have an affinity with individual teams, not the NFL. Considering how much Pepsi paid, I think Coke got the better deal.”
Coors’ move was a good one “for strategic reasons,” says Tom Pirko, head of beverage consulting agency BevMark, Santa Barbara, CA. “They have to stay in the game and everyone is getting further and further behind Anheuser-Busch. But they paid way too much for what’s starting to be recognized as not such a great sponsorship property. Sponsorships as a whole just don’t give good returns anymore.”
UNFRIENDLY SKIES
PepsiCo clipped Coca-Cola’s wings elsewhere by replacing it as the exclusive soda vendor for United Airlines, Elk Grove Village, IL. The $25 million agreement covers five years and a co-marketing deal.
