Closing Shot: Coke Pours It On
When soft drink giants Coca-Cola and Pepsi went head to head to have NCAA rights, a massive sponsorship bubbled up, powering more growth across college sports.
Former NCAA Executive Director Cedric Dempsey (left) and marketer Jim Host toast the new sponsorship with Coke in 2002.Jim Host & Associates
Coca-Cola’s longtime rivalry with PepsiCo reached a crescendo in the spring of 2002 when the two soft drink giants engaged in a high-priced bidding war for official NCAA marketing rights.
Pepsi had them; Coke wanted them back after first working with the NCAA in the late 1980s.
The intense negotiations between the NCAA’s hired marketer, Jim Host, veteran NCAA administrator Tom Jernstedt and CBS Sports with the two companies kept driving up the price for the rights. Both businesses were in competitive moods because Pepsi had just taken the NFL rights away from Coke.
Coca-Cola CEO Doug Daft, President and COO Don Keough, international marketing chief Scott McCune and Senior Vice President Chuck Fruit all kicked the tires on the deal before submitting an exponentially more lucrative proposal.
Coke’s final offer to the NCAA was a blockbuster — 11 years, $500 million. Once the NCAA had agreed, Jernstedt called Host and said, “Jim, the smoke is red,” in reference to Coke’s red cans.
That was all he needed to say. Host knew exactly what that meant.
That much money was unprecedented in college sports, but it would be a tremendous source of advertising dollars for CBS, which owned the media rights. And because Coke made a major commitment to growing Olympic sports championships, ESPN, the NCAA’s broadcast partner for all of the non-revenue sports, could expect a huge uptick in ad dollars.
“It literally changed the landscape of college sports marketing,” Host wrote in his book, “Changing the Game.”
The NCAA’s deal with Coca-Cola to be the official soft drink was announced on June 11, 2002, making this month the 20th anniversary of the epic corporate partnership.
Over the years, Coca-Cola has used a variety of its brands and products as part of its marketing and has extended its deal. One of the earliest activations came in New Orleans at the 2003 Final Four with the first Dasani Fest, a music festival on the Sunday between the semifinals and the championship game.
“The mantra back then was to own the off day,” said Vince Thompson, founder and CEO of Atlanta-based Melt. Thompson’s agency worked with Coca-Cola on its marketing and activation from the onset of the deal, and Dasani Fest became a precursor to what is now a three-day music festival over the course of the Final Four weekend.
The company later brought on CBS Sports’ Craig Silver to produce the first concert that was streamed live on Facebook in 2010 in Indianapolis with Daughtry and Darius Rucker entertaining a huge outdoor crowd.
Coke’s marketing spawned other innovative ideas for the Final Four, such as pass-through rights to business partners, including Domino’s, McDonald’s and Kroger, bringing new brands and new money into March Madness. The first Taste of the Tournament provided a culinary twist in 2017.
Now, starting its 21st year of the deal, Coca-Cola remains an NCAA corporate champion, along with AT&T and Capital One.