Gatorade-NFL deal on Fast Twitch launch could set precedent

In an unusual and possibly precedent-setting arrangement, the NFL and its longest-tenured sponsor will share revenue on the new Gatorade Fast Twitch drink, making its debut in NFL locker rooms and on sidelines this year, sources said.

This deal enabled Gatorade parent PepsiCo and the NFL to close an eight-year renewal in May despite the two sides remaining far apart on price under a traditional fee structure, sources said.

NFL execs told teams it will “creatively drive value through a new revenue stream tied to Fast Twitch,” according to a memo I’ve seen. The league and its clubs get cut into Fast Twitch sales when certain unknown sales/profit hurdles are reached.

Gatorade hardly has a perfect passer rating with new products, but this one seems to have everything going for it: An exclusive presence around NFL players for a full season, followed by a February launch with unmatched retail distribution. It won’t take over the sidelines, though — traditional Gatorade’s sideline visibility is protected, and this year will be more about putting the drink in the hands of players rather than media value of screen time.

Revenue share sponsorships are rare, but one industry source suggested there will be much more of this soon for several reasons. Properties always expect fees to increase in new sponsorship deals. But major sponsors are asking hard questions about their sports spend, and there’s not always a lot of competition, in the traditional categories at least. Revenue shares could be an answer. The products could always flop, but if the NFL affiliation is as valuable as the league claims, then they should be bullish.

The deal raises pointed questions about the status of the energy drink category, which is still closed under NFL policy (though energy drinks have been able to buy club media since 2019).

Fast Twitch sure looks like an energy drink — it’s got 80% more caffeine than Red Bull — and Gatorade isn’t discouraging that term. But the league says Fast Twitch is a “pre-workout sports performance product” and the “energy drink” category still cannot be sold by teams.

That will likely change by next offseason, one source suggested.

President of the Bears is a “ridiculous, ridiculous position” — in a good way — one NFL insider told me this week.

There’s no pro sports team around with a bigger delta between whatisand whatcould be, and Ted Phillips’ successor will be ideally set up to close that gap if he or she thrives. The Arlington Park development, an improved on-field product and a fresh jolt of energy to the business side could awake what another source called “a sleeping giant” — that is, the Chicago market.

But who will the new president’s boss be in five years, or even three? That appears to be a very good question with Bears owner Virginia McCaskey approaching her 100th birthday and succession plans being unclear. Any candidates will surely have some pointed questions about ownership.

Speaking of succession, don’t miss my cover story in this week’s SBJ, taking on that exact topic from a leaguewide perspective.

The league has changed several policies to help families like the McCaskeys avoid the troubles that have plagued teams like the Saints and the Broncos. But there can hardly be airtight guarantees — family businesses are complicated, sensitive matters no matter what you do.

And the day is coming for more turnover. The average age of NFL owners is 72, and the most prominent ones are older than that.

Combined with speculation about when 63-year-old Commissioner Roger Goodell himself might step down, all this adds up an inescapable fact: The people who have overseen a period of remarkable growth for the NFL will likely not be the ones who must build upon that foundation in the next decade.

The question is twofold: How can the league strategically develop future owners, whether new buyers of clubs or family members of current owners?

Also in the magazine this week for our NFL preview:

The Rams’ offseason plan to sell time on SoFi Stadium’s infinity screen video boards to Hollywood studios is off to a strong start. Tonight, you’ll see the plan come to life with Dwayne “The Rock” Johnson and the debut of a trailer for his DC Comics-based movie “Black Adam” from Warner Bros.

Selling time to studios to promote movies isn’t new, but Rams Chief Commercial Officer Jen Prince — who spent eight years as head of global partnerships at Twitter — hopes to build comprehensive events out of trailers. The Rock will be at the game in Inglewood, where he will hype of the crowd ahead of time and introduce the trailer. He’ll also make broadcast appearances.

Prince promised an “extraordinary moment and holistic program” that will include social content, broadcast elements on NBC, gameday appearances and activations. “We created this amazing moment that will energize the stadium and bring this entertainment moment into game one,” Prince said of working in tandem with Warner Bros., the filmmakers and Johnson’s team. The sales process is run by Michelle Gable, the Rams’ director of media and entertainment sales, who Prince hired away from Snapchat earlier this year.

Over the course of 10 home dates (counting the preseason), these one-off content deals could generate the same value as a top-tier sponsorship, without requiring much new spending by the team. They hope to drive bidding wars for days that would be in particularly high demand, like Christmas Day’s game with the Broncos.

Party Shack has two of its suites set up in the end zones of the Titans’ Nissan Stadium this season, the Jacksonville-based company’s first installations inside of an NFL venue, writes my colleague Bret McCormick. The event hospitality infrastructure company has sold or leased units to other NFL teams, including the Chiefs, Bengals and Commanders, but those setups have been used for tailgating outside of stadiums.

“This is the first activation where we’ve had an NFL team express interest in populating the inside of their actual stadium,” said Party Shack founder and CEO Bobby Bowers. Each unit seats eight people and is air-conditioned; they often feature a front porch that ticketholders can step out onto and that may contain lounge furniture.

The Party Shack units, which Bowers originally designed for golf tournaments and motorsports races, make sense for the Titans, who are planning to either significantly renovate Nissan Stadium or build a new venue altogether. That future means a large capital expenditure project doesn’t make sense at the Nashville venue right now. 

The NFL had to vet privately-owned Party Shack’s units, Bowers said, because the league shares suite revenue with the teams. Party Shack manufactures its own units (there are about 60 in existence). The average rental price is $10,000 per week, and the average purchase price is $85,000.

Party Shack generates revenue for its team clients primarily through sponsorship. The units are easily wrapped with logos, or, in the case of the Chiefs, can be positioned to create a tailgating village that can attract a title sponsor. Tickets to such a setup can be sold separately or as part of a broader premium ticketing package.

The NFL tailgating roster looks a little different this fall, as new pizza and wine deals bring the complete league roster to 38 brands to start the 2022 season, notes SBJ’s David Broughton.

Pizza Hut exited its league deal after four seasons, replaced by Ilitch Holdings-owned Little Caesars (the same parent company of the Red Wings, Tigers, Comerica Park and Little Caesars Arena).

The NFL also signed E&J Gallo and its Barefoot Wine line as an official sponsor — part of the league’s alcohol category opening up after a new, revised deal with Anheuser-Busch InBev. Diageo has snagged the spirits category for the NFL, as well as a red-hot ready-to-drink cocktails category.

Additionally, Bread Financial’s Comenity Bank has replaced Barclays (a partner since 2010) as a provider of co-branded NFL and team affinity credit cards.

Gone from the fold this season is Bridgestone (tires), which had been a league sponsor since 2007. Barclays (2010), Bose (2011) and Ford trucks (2015) also exited league deals.

This will be the 20th season for Dairy Management Inc., which joins seven other brands with a league relationship that has existed for at least two decades.

My colleague Terry Lefton in his SBJ Marketing newsletter this week also reported that activation at today’s NFL Kickoff Experience in Long Beach will include Verizon, A-B InBev, Snickers, Smirnoff, Invisalign, EA, Bread Financial and Pepsi. Various community efforts also will be underwritten by Campbell’s, Little Caesars, Lowe’s and Verizon. Meanwhile, activation this season by NFL sponsors will encompass more than 70 football-themed TV spots from 41 brands and licensees, which Tracie Rodburg, NFL SVP/sponsorship management, said exceeds last year (along with pre-COVID levels).

NOTES: List does not include the following licensees/partners: Zebra Technologies, SiriusXM, Ticketmaster, Hawk-Eye, Under Armour, New Era, Nike, News America * = Caesars and DraftKings both added sports betting 2021.