PepsiCo Steals NBA Sponsorship Rights From Coca-Cola

PepsiCo Steals NBA Sponsorship Rights From Coca-Cola

When you think of rivalries, several different matchups come to mind.  Maybe you think of Boston Red Sox and New York Yankees, New York Jets-New England Patriots, etc.  In the business world, the equivalent of the bitter Red Sox-Yankees rivalry most certainly would be Coca-Cola and PepsiCo.  These two beverage giants continue to face off around the world, looking to take market share from each other, amid declining North American soft drink sales.  Lately, the two beverage giants have been facing off in a different arena: sports sponsorships.


Fortune reports that PepsiCo was awarded with Coke’s old NBA sponsorship rights

Coke has maintained a sponsorship relationship with the National Basketball Association since 1986, but the legacy comes to end as the NBA shakes up its sponsorship rights, which is set to begin next season with PepsiCo.  While no specific terms of the deal have been made public, Fortune reports that a source close the deal said that the new partnership with be “worth significantly more than previous partnership”, adding further to PepsiCo’s victory.  To make matters even better for PepsiCo, the NBA sponsorship deal also covers the WNBA, NBA Development League, and USA Basketball. PepsiCo now has a stronghold on major US sports sponsorships with existing deals already in place with the NFL, MLB, and NHL.  This further highlights PepsiCo’s strategy to continue marketing and advertising during sports games, as a way to generate exposure and, hopefully, higher earnings.  According to Bloomberg, however, Coke signed a four year deal with Major League Soccer (MLS) last night, a sponsorship that PepsiCo has control over until December.

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Second major victory for PepsiCo in 2015, after replace Diet Coke as second popular soft drink in US

Aside from landing massive sports deals, PepsiCo was handed another victory earlier this year, as 2014 sales saw regular Pepsi outsell Diet Coke to take the 2nd spot.  Regular Coke still maintains the top sales spot, as it has for many years.  Diet Coke’s sales fell by -6.6% in 2014, while sales of Diet Pepsi fell 5%, as consumers continue to shun alternative sweeteners such as aspartame. The Beverage Marketing Corporation released a report still showing that despite falling soft drink sales, the US refreshment market grew by 2.2% in 2014, one of the best years of growth in a long time.

Overall, the rivalry is still very much alive and well.  PepsiCo continues to focus on its sports marketing exposure, as a way of adding potential sales growth and “buzz” among consumers.  Coke slide in 2014, but still maintains the overall number 1 spot for top selling soft drink.  Both beverage giants will continue to compete in new aspartame-free, low calorie “diet” soda drinks, which could help ignite another battle for supremacy in US and globally.

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