SBJ/April 11-17, 2011/Marketing and Sponsorship

Pepsi keeps MLS deal, minus team rights

Pepsi has renewed its long-standing partnership with Major League Soccer for four years, but the soft drink manufacturer has surrendered exclusive local rights to MLS teams.

The deal, which was negotiated by Soccer United Marketing and Pepsi, includes a renewal with the U.S. national team. Industry sources peg the value of the league deal in the low eight figures, but say the cumulative earning potential at the team level is greater.

GETTY IMAGES
Pepsi’s league deal dates to 1996.
Pepsi’s partnership with MLS dates to 1996, the league’s inaugural season.

According to Jeff Dubiel, Pepsi’s vice president of sports marketing, Pepsi, Aquafina and Gatorade will retain league exclusivity in the soft drink, bottled water and sports drink categories.

Dubiel said the Pepsi brand will also activate three new soccer campaigns this season: The Pepsi Football Club will promote 11 individual MLS and U.S. national team players in local markets; Pepsi will sponsor the July 14-Aug. 6 World Football Challenge tournament, which includes MLS teams and international clubs; and it will launch a yet-to-be-named grassroots campaign aimed at Hispanic fans. Pepsi is working with Gilt Edge Soccer Marketing on the campaigns.

“We’d love to have league plus local rights to all of the teams, but I don’t think [losing local rights] will impede us,” Dubiel said. “All other major leagues are operating this way. We expected [MLS] would get there, too.”

The Pepsi deal comes two weeks after SUM announced its renewal with another founding partner, Anheuser-Busch, and that deal also saw the league withhold local rights after years of granting exclusivity at the team level.

Kathy Carter, president of SUM, said the retention of local rights brings the Pepsi and Anheuser-Busch deals in line with the league’s other major partnerships, such as those with Allstate, AT&T and Home Depot. Carter said the 2008 deal with Volkswagen marked the league’s first major partnership that left local rights open to teams.

“It’s an evolution, not a revolution. As the value of the league has increased, our clubs have become more relevant,” Carter said. “They have relationships with local marketers and distributors, and by tying their hands [with exclusive deals] we were not taking advantage of their value.”

Dubiel said Pepsi is pursuing local marketing rights with the New England Revolution, Chicago Fire, Columbus Crew, Real Salt Lake, D.C. United and Sporting Kansas City teams, which all have stadium deals with the beverage maker. The Portland Timbers recently signed a deal with Coca-Cola, as did the Seattle Sounders, which extended Coke’s stadium deal at Qwest Field. The Philadelphia Union and Colorado Rapids both had existing stadium deals with Coca-Cola, and both clubs are looking to expand the relationship into team deals. The San Jose Earthquakes brought on 7Up/Snapple for a multiyear team partnership in March.

David Kaval, president of the Earthquakes, said the soft drink deal grants the team a boost in local marketing. “We can piggyback with them at points of sale. [The deal] brings a deeper presence in the community,” Kaval said. “That was always missing. The coordination with [a league deal] was too difficult for local marketing.”

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