Pepsi and NIL: What $50M Could Do.
This theory makes too much sense.
Happy Friday and good day to you.
One quick thing before getting into today’s piece…
As some of you may know, the first annual Name, Image, Likeness (NIL) summit for college athletes was hosted in Atlanta this past week by INFLCR and SANIL.
They had an array of speakers, athlete awards, educational sessions, and INCFLR’s parent company Teamworks even announced a $50M Series D at the event.
But check this out…
Opendorse (who is INFLCR’s competitor) bought up all the billboards in the surrounding areas.
I have no affiliation with ANY company involved in NIL, which makes it that much more interesting to watch them battle it out.
Let’s dive into today’s piece 👇
Yesterday, Anheuser-Busch announced they will no longer be the exclusive sponsor of the NFL Super Bowl opening up the flood gates for other alcohol companies.
A few months ago, Pepsi announced they will no longer be the official sponsor of the Super Bowl Halftime show.
It’s anticipated that the next sponsor will pay between $40-50M for those rights.
That seems high.
Estimates suggest that Pepsi’s halftime broadcast earned only $9.4 million in media value last year.
It’s clear that both companies want to diversify their ad spending.
So it got me thinking…
What if Pepsi took that $50M and put it towards NIL in college sports?
$50M for NIL
I’m positive that Pepsi could generate more than $9.4M in media value through strictly NIL if they had a $50M budget.
Do ten $1M deals with NIL collectives at major universities.
Imagine if Pepsi signed a deal where they paid $1M to Kentucky’s collective and directed it towards just the basketball team.
All 16 players (including the 3 walk-ons) would get paid $62,500 for the year.
Last year’s Kentucky basketball squad had over 821,800 combined followers across the major social media channels (yes I went through and added it all up).
Pepsi could work into the agreement that every player has to promote Pepsi on social media 2 times a month.
Work this across 10 different high-level college basketball teams and you’re looking at 3,840 promoted posts on Twitter, Instagram, and Tik Tok in a year. (16 players x 2 posts x 12 months)
This in itself would get far more than 103M viewers — which is how many people watched last year’s Super Bowl.
And it gets even better…
Pepsi still has $40M left in its advertising budget.
There are a lot of different ways I would spread this out, but I’ll offer one more solution here.
It’s been reported that the median NIL deal across college sports is $50-$60 — only 1% of college athletes are making the big bucks.
So what about the other 499,000 college athletes looking for ways to make money?
Pay them $60 to promote Pepsi across their social media channels.
This would cost them $30M ($60 x 499,000 athletes).
Your looking at billions of impressions, tons of media coverage, happy college athletes, and plenty of sales.
On top that…
Utilizing these two strategies would cost Pepsi $40M leaving them with $10M left to play around with in NIL.
For reference, Pepsi spends roughly $3B in ads per year.
$50M isn’t even 2% of that.
Brands take time to adapt to new landscapes — I think they’re missing out on major opportunities throughout NIL and college sports as a whole.
The Super Bowl is a massive event. There’s no question about that.
But how many people are paying attention to the fact that Pepsi is the sponsor of the halftime show?
Most people are drinking, socializing with friends, and focused on the performance by Beyonce, Eminem, or whoever it is.
By doing NIL deals instead, you accomplish several objectives:
spread out the campaign
get college athletes paid
dominate social media for a whole year
get billions upon billions of impressions
Seems like a much better way to divert a portion of the advertising budget — especially if you’re a big brand, with massive pockets like Pepsi.
And don’t forget…
Pepsi owns Gatorade, Propel, and SoBe Lifewater.
Have a great weekend.
We’ll talk on Sunday during the weekly roundup. There were some cool developments this past week in the business of athletes, sports, and NIL that I look forward to covering then.