It was unclear what the value of the deals would be, but the Microsoft package was believed to be significantly pricier-similar to the $90 million deal announced last month between News Corp. and Tricon Global Restaurants (AA, June 4). The Coke deal was thought to be perhaps a third as large. Tricon operates the Taco Bell, KFC and Pizza Hut chains.
As with the Tricon arrangement, the deals were expected to focus on ad time across the gamut of News Corp. TV properties: the Fox broadcast network; cable channels such as FX, Fox News Channel and Fox Sports Networks; and the company's syndication unit, Twentieth Television.
The length of the deals and their relationship to the upfront buying period was unclear.
Calls to News Corp. executives were not returned. A Microsoft spokeswoman declined to comment, while a call to Coca-Cola was not immediately returned.
Sports may be a linchpin of the deals. Both Microsoft and Coca-Cola advertise heavily during sports broadcasts, and Fox has hours of premium sportscasts to fill, a task made tougher this year by the faltering economy. The network carries NFL games and Nascar races, and this fall will offer all the baseball playoffs, including the World Series.
Sports, a strong way to reach young men, offer a demographic long coveted by the giant soft-drink maker and an increasingly important one at Microsoft with the November launch of its Xbox video game console. Fox also offers a younger-skewing audience with shows such as "Ally McBeal" and "The Simpsons."
Besides TV ad time, the cross-media deals could include marketing opportunities with News Corp.'s 2oth Century Fox film studio such as product placement and, especially in Coke's case, promotional tie-in possibilities.
News Corp. also owns a run of local TV stations that could offer ad space in specific markets. Coca-Cola relies heavily on spot TV, while it is much less of a focus at Microsoft.
Like the Tricon deal, these two deals are being driven by News Corp. One, the cross-media sales group at the company. Such deals are now closely watched by Wall Street, especially in the wake of the $300 million Viacom/Procter & Gamble Co. deal earlier this spring (AA, May 7).
Contributing: Tobi Elkin, Hillary Chura and Richard Linnett.