Exclusive business rights go to Pepsi in cola war with Coke on UM campus PepsiCo signs 15-year pact to use name at College Park

December 06, 1997|By Mike Bowler vTC | Mike Bowler vTC,SUN STAFF Sun staff writer Marego Athans contributed to this article.

PepsiCo Inc. has won the latest skirmish in the Great Cola Wars, wrapping up a 15-year contract with the University of Maryland, College Park, that gives the cola giant exclusive rights to do business and show its name on the sprawling campus.

The university's Board of Regents approved a contract yesterday authorizing Pepsi to sell its products -- including the snack foods of its Frito-Lay subsidiary -- on campus until 2013.

In return, the university gets an immediate payment of $8 million, and $260,000 a year in commissions, plus other benefits.

But the $8 million up front and yearly commissions weren't what College Park was after when the university opened the bidding process in spring.

"We originally wanted support to name the new field house" that is expected to replace the aging Cole Field House, said Charles Sturtz, vice president for administration. A payment of $25 million would have been sufficient, Sturtz said, but neither Pepsi nor Coke, the only two bidders, was willing to go that far.

"How about Budweiser?" one regent said jokingly when Sturtz said there wouldn't be a Pepsi Arena to replace Cole. There was no reply.

College Park joins the parade of about 100 campuses or state higher education systems nationwide that have given one or the other of the soft-drink behemoths exclusive pouring rights.

In Maryland, Coppin State College has a 10-year deal with Coke worth $611,000. Towson University has a five-year deal with Pepsi worth $2 million. And Ocean City is a one-cola town, with a five-year contract with Coke.

In all, said Sturtz, each of the two companies is getting about 50 percent of the exclusivity business.

All the state university campuses in Pennsylvania have contracts with Pepsi signed in 1992 and 1994. Penn State, the first major state university to join the cola wars, signed a 10-year, $14 million deal five years ago.

As part of those contracts, Pepsi gives the schools software that helps students find financial aid. It also pays the system $50,000 a year to market and promote Pepsi through campus publications.

Other universities have signed megadeals. The 37,000-student University of Minnesota has the largest, a 10-year deal with Coke worth $28 million.

Sturtz said Coke and other soft drinks competing with Pepsi can be purchased at campus convenience stores.

"Students at College Park will still have a choice," he said.

But the Coke signs in Cole Field House will soon come down, to be replaced by signs for Pepsi and Fritos.

Pub Date: 12/06/97

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