The Minnesota Vikings and the University of Minnesota are playing their own version of Coke vs. Pepsi -- with millions of dollars at stake.
As the Vikings negotiate to use the school's TCF Bank Stadium during construction of a new professional stadium, one of the sticking points is the university's 10-year agreement making Coca-Cola the exclusive soft drink on campus. The Vikings have an agreement with Pepsi, and the National Football League also has an agreement with Gatorade -- which is owned by Pepsi -- to have "Gatorade-logoed coolers, cups and towels" on the sidelines of all NFL games.
The university has had Coke as its exclusive soft drink since 1996, and the latest 104-page contract features an "approved cup design" and lists more than 300 Coke vending machine locations on the Twin Cities campus alone.
"The beverage issue is very important to the NFL and to the Vikings," said Mark Rotenberg, the university's general counsel. "They say that they have Pepsi, and we say we have Coke."
With the Vikings needing to use the campus stadium for at least a year while the team's new stadium is built, the team and the school are racing to reach a solution by fall.
Coke spokesman Kevin Morris said the outcome is clear -- Coke will be sold at Vikings games at TCF Bank Stadium. "Our assumption is that our products would be served during those games," said Morris, the vice president for public affairs and communications for Coca-Cola Midwest.
The Vikings said there is time to work out a compromise, though an initial letter of intent with the U will be void if a final agreement -- including a resolution of the Coke vs. Pepsi issue -- is not reached by Aug. 31. The letter of intent left the Gatorade issue unresolved but says that the Vikings cannot "serve or sell, distribute, dispense, advertise or promote" any beverage on campus in violation of the school's existing contracts.
"Pepsi's been a longtime and strong sponsor of Viking football, and we are proud of that relationship," said Lester Bagley, the team's vice president for public affairs and stadium development. "We've got some time to sort [it] out."
NFL spokesman Brian McCarthy likewise said there are ways to resolve the problem, and said that the Atlanta Falcons -- Coke is headquartered in Atlanta -- have a business deal with Coke and yet Gatorade has been featured on the sidelines at Falcons home games for more than two decades. "Gatorade has a 'game-day' presence in all [NFL] stadiums, regardless of local club-stadium sponsorship, or pouring deals," he said.
The university's Coke contract says that Gatorade can be dispensed to athletes in "nonpublic spaces" on campus as long as it is in "nonbranded containers." But the contract also says that the university "shall not grant advertising, marketing or promotional rights for Gatorade products" on campus.
Details of the U's contract
The university's Coke contract, which is worth more than $14 million to the school, binds the school and the soft drink giant on many levels.
In addition to the basic $14million contract, the school gets a $4.9 million sponsorship fee so that Coke can have a major marketing presence at athletic events, and up to 10 freshman students selected by Coke receive $5,000 scholarships annually. Should Coke also sell the school at least 60,000 cases of "nonvending beverages" a year, the school gets 83 cents per case, or $49,800. The school also receives a vending commission guaranteed to be at least $750,000 a year.
Coke, of course, also benefits. The company gets a sign on the main TCF Bank Stadium scoreboard, tickets and paid travel to football and men's basketball and hockey away games, free rounds of golf at the school's golf course and the use of Williams Arena, Mariucci Arena and TCF Bank Stadium once a year for a company outing.
Other perks for the company include a 16-person suite at TCF Bank Stadium for all football games, 12 season tickets for men's basketball games and a VIP reception for 60 people at football, basketball and hockey games. Coke also gets full-page color ads on the back cover of game programs for most of the school's major sports.
Not out of the ordinary
School and Coke officials said the arrangement is typical of other large contracts at the school. Morris, who said he has helped oversee the contract, said Coke had similar, exclusive agreements with most Big Ten schools except for Penn State, Michigan State and Wisconsin.
The free golf at the university, Morris joked, is something that "I never got to enjoy."
Rotenberg said that the university has given Coke nothing that other large vendors have not also received and that the school did not compromise its standards in doing so.
"Coke is not unique in that way," he said. "If we can offer them some tee times or something that they find beneficial to their employees [to] give us a break" on costs, then "my office will negotiate that."
"We don't promise their executives' children free admission to the medical school," he said, laughing.
Linda Cohen, who chairs the university's Board of Regents, said she was aware of the U's negotiations with the Vikings over the Coke vs. Pepsi issue, and said she did not think the disagreement was a "deal breaker" in having the Vikings use the stadium. "Certainly, we want to honor" the school's Coke contract but also "make this work for everybody."
But, said Dean Johnson, another member of the Board of Regents: "Pepsi and Coke -- I mean, that's a big deal. We're not trying to be punitive toward either product."
Mike Kaszuba • 651-222-1673
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