By severing Coca-Cola's nearly 30-year relationship with the NBA, PepsiCo will achieve a clean marketing sweep of the four major professional sports leagues this fall.
Under the five-year deal, PepsiCo will become the official food and beverage company of the NBA, WNBA, NBA D-League and USA Basketball and will control beverage rights for the NFL, MLB, NHL and NBA. Coke will not be an NBA sponsor for the first time since 1986.
By adding the NBA, Pepsi definitely wins this round of the cola wars, said John Sicher, editor of Beverage Digest.
"In any marketing tool chest, there are lots of different tools—player deals, big deals," Sicher said. "Today, PepsiCo took over one important tool in the sports marketing tool chest."
Other factors drove the deal, which covers both the U.S. and China, according to Emilio Collins, the NBA's evp of global marketing partnerships.
During negotiations, PepsiCo offered the NBA a chance to work with salty snacks including Doritos and Ruffles, as well as beverages like Mountain Dew, Aquafina and Brisk.
"The level of enthusiasm across their broad portfolio of brands was really second to none," Collins said.
"One of the most compelling aspects of this relationship is their incredible commitment to activation," Collins added. "Across not only the brands, but also in aligning with youth, we are working on a number of youth initiatives."
Coke won't be out of the NBA picture completely. Teams and players—like Sprite endorser LeBron James—can still cut their own deals with either Coke or Pepsi. But teams tend to sign with league sponsors.
Omnicom Group's BBDO handles the Mountain Dew brand while OMD handles media planning and buying for a variety of brands. PepsiCo spokeswoman Jennifer Ryan said the deal will not affect current agencies.
The deal between PepsiCo and the NBA was first reported Monday by SportsBusiness Journal and Beverage Digest. In a statement, PepsiCo CEO Indra Nooyi said she wants to "redefine the meaning of sports marketing partnerships."