NFL and Pepsi Set to Announce Possibly Biggest Sponsorship Deal in US Sports History

September 6, 2011

The National Football league (NFL) and PepsiCo Inc. are set to announce a 10-year, extension of their sponsorship deal that ultimately could be valued at $2.3 billion through the 2022 playoffs, making it one of the largest sponsorship deals in history of U.S. sports.

The deal ensures that PepsiCo brands Pepsi, Gatorade, Frito-Lay, Tropicana and Quaker Oats will be official marketing partners of the league at a cost of nearly $100 million a year. It also maintains Gatorade’s constant cooler presence on NFL sidelines.

The sports drink is one of only two brands other than actual on-field equipment that are integrated into NFL games. (Motorola, which provides the headsets used by the league’s coaches, is the other).

A person close to the deal said in addition to the national rights fee, PepsiCo could spend an estimated $1.3 billion on marketing and other NFL-related spending during the agreement. A spokesman for PepsiCo said the company doesn’t disclose its marketing budgets.

The deal, combined with several other sponsorship agreements, as well as projections for ticket sales and television ratings, suggests the NFL’s business has regained its usual healthy forecast, after several NFL executives last year expressed concern that the labor strike could besmirch the league’s good name.

Jennifer Storms, senior vice president for global sports marketing for PepsiCo, said securing the NFL extension was an important goal, with the current deal set to expire at season’s end.

The current deal between the NFL and PepsiCo dates to a five-year agreement reached in 2002 and extended for five more years in 2004.

“We’ve had a long history together and our shared values are so important,” Ms. Storms said. She pointed to the mass audience for the Super Bowl and the widespread impact the company’s ads received from the publicity surrounding the championship game.

Brian Rolapp, chief operating officer for NFL Media, said the PepsiCo deal would have been tough to pull off had the lockout not ended.

“It’s certainly an enabling factor for a deal like the Pepsi one when you know you are going to have labor peace for such a long, long time,” he said.

The recent collective bargaining agreement between the league and its players runs through the 2020 season.