PepsiCo and NFL renew sponsorship deal

September 6, 2011 - 6:05 PM
PepsiCo NFL

In this Aug. 20, 2011 photo, Gatorade bottles are kept cool on the sidelines of a preseason NFL football game, in Denver. PepsiCo and the NFL said Tuesday, Sept. 6, 2011, they're renewing their long-term partnership with a new, multi-year deal that starts next year. (AP Photo/Chris Schneider)

PepsiCo Inc. and the NFL said Tuesday that they are renewing their marketing deal with a new 10-year deal that begins next year.

The financial terms of the contract weren't disclosed.

However, a person close to the matter who asked not to be named because the person wasn't permitted to speak publicly told the Associated Press that PepsiCo would pay roughly $90 million a year in rights fees.

That's nearly $1 billion over the length of the contract to make its Pepsi, Gatorade, Frito-Lay, Tropicana and Quaker Oats brands official marketing partners of the league.

PepsiCo would then spend more on marketing and promoting its ties to the NFL. The company, based in Purchase, N.Y., said it does not disclose its marketing spending. But the Wall Street Journal, citing an unnamed source, said that spending could run roughly $1.3 billion more during the length of the contract.

The deal also ensures that Gatorade would remain the featured drink on the sidelines at games. In addition, PepsiCo's Frito-Lay snack foods brand will promote big events like the Super Bowl.

David Carter, a sports business professor at the University of Southern California, said while the contract seems excessive at first glance, it might be worth it for Pepsi. The company gets 10 years of promotion for five brands, and it is unclear if that marketing figure includes the millions it would already spend on Super Bowl or other expensive advertising during the period.

"What it might suggest to other partners or potential partners ... is what the NFL is expecting in terms of contracts," Carter said.

The deal extends a 28-year relationship between Pepsi and the NFL.