PEPSICO AND the NFL renewed their longstanding partnership this week in a sponsorship deal which is one of the most lucrative in US sporting history.
Original speculation valued the renewal at $2.3bn over ten years, but analysis by the Wall Street Journal puts the sponsorship at between $900m and $1bn, with a further $1.3bn to be spent on marketing and activation throughout the duration of the contract.
For each of the five NFL brands under the PepsiCo umbrella – Pepsi MAX, Frito-Lay, Gatorade, Quaker Oats and Tropicana – the soft drink and snack company will pay between $15m and $20m per year for marketing partnerships.
Quaker Oats and Tropicana will be added to the 23-brand NFL sponsor roster when terms of the renewal take effect in 2012, while Gatorade will maintain its ever-present visibility as official cooler sponsor on the gridiron sidelines.
The renewal premium paid by PepsiCo sees them snapping at the heels of Anheuser-Busch as the League’s most valuable relationship. The brewing company signed a six-year deal in May 2010 to secure league-wide marketing rights, valued at $1.2bn.
The value of NFL sponsorships has continued to rise over the past few years – with PepsicCo experiencing the full financial force of the sport’s relentless growth. According to the Frontiers Deals Database, PepsiCo paid the NFL between $160-200m for a five-year deal in 2002, followed by $560m in 2004 for an eight-year renewal.
In light of the recent controversy surrounding the four-month NFL lockout, however, some players and fans may see the timing of the PepsiCo deal as a sign that the NFL covered its financial hand in order to leverage concessions from the players’ union.
League officials have also revealed that sponsorship revenue will rise 15 per cent this year, pushing projected league revenue to a record $9.5 billion, $100 million more than previously thought.