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Volume 22 No. 7
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USOC crafts deal for MilkPEP

Got Rings?

The U.S. Olympic Committee will soon name the Milk Processor Education Program as a new sponsor through the 2020 Olympics, a deal that comes very close to exclusive marketing rights held by the longest-tenured Olympic sponsor, the Coca-Cola Co.

The dairy marketing consortium will pay between $8 million and $10 million in rights fees, according to sources. MilkPEP is expected to officially unveil the partnership to its board Jan. 26.

Both the USOC and MilkPEP officials declined to comment.

The deal is notable for how it is structured to avoid interfering with Coke’s broad rights to the non-alcoholic beverage category. Coca-Cola is a part-owner of Fairlife, which owns Core Power, a brand of high-protein milk drinks planning an Olympic campaign with gymnast Simone Biles, Paralympian sprinter Blake Leeper and wrestler Kyle Dake.

But MilkPEP promotes the consumption of milk in general and doesn’t advocate for particular packaged, branded products. Also, its rights in this deal are believed to be limited to white milk, because its usual marketing of chocolate milk as an exercise recovery aide would conflict with Core Power/Coca-Cola’s rights. CorePower comes in several flavors.

Coca-Cola was consulted closely during the milk negotiations, and a source said the soft drink giant expressed displeasure at times. But ultimately Coke welcomes the added partner, according to a spokeswoman.

“Our sponsorship and support of the U.S. Olympic Team does not conflict with the Milk PEP deal,” Coca-Cola said in a statement. “As leaders in the value-added milk category with fairlife and Core Power we are happy to see milk take the Olympic stage and we believe this association benefits the entire milk category.”

No company has a closer relationship with the Olympics than Coca-Cola. The soft drink maker first sponsored the 1928 Games and has been a worldwide rights holder continuously since then. It’s currently working under a deal through 2020 with the International Olympic Committee and a subsidiary deal with the USOC that expires at the same time.

Marketing experts said MilkPEP will have a challenging activation environment given its narrowly tailored category.

Furthermore, sources said, Coca-Cola typically has negotiated advertising exclusivity as part of its media buys on NBC, which broadcasts the Olympics and owns the rights to many Olympic sports governing bodies’ secondary events. That advertising exclusivity is often broader than the USOC sponsorship rights and could limit milk’s ability to activate on television. NBC declined to comment.

“This is really threading the needle,” said veteran Olympic sponsorship sales agent Rob Prazmark, who sold worldwide deals on behalf of the IOC in the 1980s and ’90s, and represented the USOC as president of Olympic sales and marketing for IMG from 1997 to 2006.

MilkPEP signed a sponsorship deal with USA Swimming in 2015 and plans to sponsor five American swimmers as part of its 2016 campaign, but that deal does not include rights to the Olympic rings.

Other beverages have found ways into the Olympic world alongside Coke. For instance, USOC sponsor J.M. Smucker Co.’s Folgers brand has the U.S. Olympic marketing rights to ground or whole coffee beans but not ready-to-drink coffee.