PepsiCo recently cemented its status as a company that sponsors all major sports leagues in the United States, after acquiring sponsorship rights for the National Basketball Association.
Business Insider reported that for 28 years, Coca-Cola was the official sponsor of the NBA. However, the company has been struggling on a global scale for two years, missing its annual volume growth target. Coca-Cola introduced a cost-cutting plan worth $3 billion, which resulted to the removal of 2,000 jobs and various executive perks. Among the losses was its official NBA sponsorship deal.
Based on the same report by Business Insider, a Coca-Cola spokeswoman stated that the company will continue to have a strong presence in basketball through their relationship with great players. She added that Coca-Cola will stay visible through its current relationships with NBA teams and selected places. About half of the teams in the NBA, as well as a number of NBA stars will maintain their contracts with Coca-Cola.
CNN reported that now that PepsiCo has won the exclusive sponsorship rights for the NBA, the company now has deals with all the major sports leagues in America, including the MLB, NHL and NFL. For many years, Pepsi had a standing relationship with NBA because it owns Gatorade. With the newly forged partnership that will last several years, PepsiCo gets the advantage of promoting its other products at NBA games, such as Mountain Dew, Doritos, Ruffles, Aquafina and Lipton Brisk. Mountain Dew will become the leading soft drink in the partnership.
Other benefits that Pepsi will get include preferential treatment during advertisements and the increased likelihood of individual players and teams to create partnerships with Pepsi, because of the deal. PepsiCo will also become the official sponsor of the NBA All-Star Game.
Fortune reported that the terms of the deal between Pepsi and NBA have not been revealed. However, an insider reported that the deal cost a lot more compared to the former partnership between the NBA and Coca-Cola.
The new deal marks Pepsi's second victory against Coca-Cola. Pepsi recently became the No. 2 soft drink in the United States. Coca-Cola remained at the No. 1 spot, but Diet Coke was removed by its competitor from second place.
Based on a report by Yahoo!, Indra Nooyi, chief executive of PepsiCo, stated that the company will also work with Tingyi, its partner in China, to enhance its presence abroad.
Nooyi said, "We actually bring together more excitement for the product and for the sport."
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