Pepsi Settles Ad Flap, Averts Boycott

NEW YORK Urban music mogul Russel Simmons on Wednesday signed an agreement with Pepsi, stating the beverage company will donate at least $1 million annually for three years to as yet-to-be-determined nonprofit organizations that benefit the hip-hop community.

A six-member team, including a representative of Ludacris Foundation, will determine which charities will receive the money, according to a Pepsi spokesperson.

In return, Simmons, chairman of the Hip-Hop Action Network, has called off the “Campaign for Respect” boycott of Pepsi products scheduled to begin on Wednesday, following complaints that Pepsi displayed cultural insensitivity by pulling Ludacris ads but letting spots featuring Ozzy Osbourne remain on the air.

Originally, the HHAN called for Pepsi to give a public apology, $5 million to the Ludacris Foundation and reinstate the Ludacris ads. During a press conference on Wednesday, however, Simmons said he considered the contract to be an apology. He added that Pepsi offered to do a new series of Ludacris ads, but the foundation was not interested.

“Our goal been always been to help kids,” a Pepsi representative said. “With the newly created fund, we’ll be working together to provide more opportunities for young people.”

While a verbal agreement was reached between Pepsi and Simmons on Monday, the boycott was almost reinstated on Wednesday morning after it was reported on Fox News’ The O’Reilly Factor on Tuesday night that Pepsi would not be working with the Ludacris Foundation. “It was a shock to us,” Simmons said. The statement proved to be false, however, and the agreement was signed by Pepsi CEO Dawn Hudson and Simmons at about 1:30 p.m. on Wednesday, so the boycott was not reinstated.