Coke, James Sign Endorsement Deal

Coca-Cola Co. said Thursday that it signed a six-year endorsement deal with the NBA’s hottest new talent, Cleveland Cavalier LeBron James, one month after it stopped airing ads featuring Laker star Kobe Bryant.

Terms of the deal weren’t disclosed, but advertising professionals said reports that James would earn $2 million a year, and more if sales of Coke’s Powerade sports drinks grew, were probably close to the mark.

The world’s No. 1 soft drink company said the James deal was unrelated to Bryant’s arrest last month.

Signing a hot young talent could only help Coke, sports marketers said, especially as basketball season resumes and the case against Bryant again takes center stage this fall. In part, for Coke the deal “is all about hedging their bets,” said Paul Swangard, managing director of the University of Oregon’s Warsaw Sports Marketing Center.

Bryant is fighting charges that he sexually assaulted a 19-year-old woman. A spokesman for Bryant didn’t return calls.

Bryant earns an estimated $20 million a year from deals with Nike Inc., McDonald’s Corp., Coca Cola and others. One company, Nutella, which makes a hazelnut-and-chocolate spread, has said it was dropping Bryant.

In a statement Thursday, Coke said James, 18, would perform several promotional roles for the Sprite and Powerade brands. One of them, the company said, would be as a spokesman for Sprite’s long-standing “Obey Your Thirst” campaign.

“LeBron James has brought more excitement and anticipation to the game of basketball than any player in recent history, and we think he’s just getting started,” Jeff Dunn, the president of Coca-Cola North America, said in the statement.

The 6-foot-8-inch, baby-faced James, who was the league’s top draft pick coming out of high school in Ohio, also has signed a seven-year, $90-million endorsement deal with Nike, the richest deal ever for an entry-level player.

The Coke deal is smaller but big enough that it probably was in the works long before Bryant’s arrest, marketing experts said.

And it’s not unusual for a company to have more than one marquee name on its roster. Nike, for example, signed NBA stars Charles Barkley and David Robinson when it had a contract with Michael Jordan, Swangard said.

“It’s like what a good money manager does with a mutual fund,” he said. “The hope is that the more investments you have in your portfolio, the more likely you are to have reasonable returns.”

David Carter, a principal of Los Angeles-based consultants Sports Business Group, agreed.

“It may not be a coincidence that they’re signing LeBron at this point,” Carter sad, “but it’s not to say that they couldn’t have had both of those spokesmen working for them.”

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Bloomberg News was used in compiling this report.