Replaces Coke in $200 Million Deal

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NEW YORK ( -- PepsiCo has replaced Coca-Cola as the official soft drink sponsor of the National Football League, people close to the negotiations confirmed.

The deal is worth $200 million over five years and comes two days after Adolph Coors Co. replaced Anheuser-Busch and Miller Brewing Co. as the league's official beer sponsor.

Gatorade, Fritos and Tropicana
Purchase, N.Y.-based PepsiCo's offer was said to have doubled Coke's previous sponsorship deal, but a PepsiCo executive cautioned that this deal was spread over four companies. The new agreement also renews the NFL's arrangement with PepsiCo's Frito-Lay snacks and Gatorade energy drink, which celebrates its 20th anniversary this season as the official sports drink of the NFL, and brings Tropicana orange juice into the fold as the league's new official juice sponsor.

The agreement is similar to the five-year, $300 million deal Coors struck Tuesday. Like Coors, Pepsi now has exclusive rights to league trademarks such as the NFL shield, the Super Bowl, the Pro Bowl and other calendar opportunities such as the NFL draft. Pepsi also receives collective club trademark rights

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to use all 32 team logos. Both deals include media and promotional spending.

Coke, like Anheuser-Busch and Miller, can continue to buy ad time and be a sponsor on the team level. In fact, Coca-Cola has sponsorship agreements with 23 of the league's 32 teams. Pepsi has agreements with 10 teams; both beverage makers double up on one franchise.

Neither PepsiCo nor the NFL would comment on the negotiations, but issued a joint statement.

"We are pleased to add PepsiCo to the NFL family of sponsors," Commissioner Paul Tagliabue said. "We look forward to working closely with PepsiCo to develop NFL-themed programs and initiatives."

'Winning proposition'
Said PepsiCo Chairman-CEO Steve Reinemund: "Combining the power of the NFL and the strength of its fan base with our vast portfolio of brands makes this a winning proposition."

Bill Marks, a spokesman for Atlanta-based Coca-Cola, said his company's research showed that fans don't see a distinction between a national sponsor and a local sponsor, and that part of Coke's decision was financially based.

"As in the case with many major marketers, we are increasingly concerned with the trends of escalating costs of national sponsorships," he said.

The deal represents the second remarkable sponsorship departure for the NFL in a 48-hour span. By selecting Corrs, the No. 3 brewer in the U.S., the league displaced Miller, a sponsor for 18 years, and Anheuser-Busch, a sponsor for 12. Coke, the world's best-selling soft drink, had been the official soft drink of the NFL since 1983 but now must clear the decks for No. 2 Pepsi.

"They're going with the underdogs because the underdogs are a little hungrier," said Frank Vuono, partner in the Rutherford, N.J.-based sports marketing firm 16W Marketing. "Coors and Pepsi went and put up higher and preemptive bids. It's not unlike the situation several years ago when Fox won the [National Football Conference] TV rights from CBS with a big bid."

Coors is a distant third in the brewery race, but is hoping its deal with the NFL raises its profile even more. Pepsi, on the other hand, has long been a No. 2 to Coca-Cola -- but a noisy No. 2.

In what many regard as the bitterest rivalry in marketing, Pepsi has tweaked Coke several times over the past year: It swooped in to purchase Quaker Oats Co. after Coca-Cola had delayed a decision; it then took $350 million in business away from Coke superagency Interpublic Group of Cos. and moved it to Omnicom Group; and, last week, Pepsi beat out Coke to become the official cola of United Airlines.

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