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Second Pepsi Sponsorship

LA Times

Behold, the second signing of Michael Jackson . . . by Pepsi-Cola for an estimated $50 million and duly noted by the Guinness Book of World Records as the biggest personal endorsement deal in history.

For weeks, America's gossip journalists have dutifully printed teasers that the multimillionaire recluse might be on the verge of emerging from his post-Victory Tour retirement. The current issue of Newsweek magazine, for example, is asking and answering the rhetorical question, "Whatever happened to Michael Jackson?"

Tuesday, the Jackson publicity machine will finally make good on all the hype.

"The kid's going back to work," one Jackson associate told The Times.

The 27-year-old "kid" is scheduled to appear, along with Pepsi-Cola President Roger Enrico, at an 11 a.m. (EDT) press conference Tuesday at New York's Parrot Club to announce the signing of a two-year personal endorsement contract with Pepsi-Cola.

The Times has learned that Guinness Book of World Records Editor Alan Russell is also on the conference agenda. Russell is to announce that the Jackson/Pepsi alliance has qualified for the next printing of the record book as the world's most lucrative personal-endorsement contract.

"Far and away it's the biggest commercial sponsorship deal in history. Far and away," said one Jackson adviser.

Jackson also claims the second biggest commercial sponsorship deal in history for Pepsi's underwriting of his 1984 Victory Tour for $6 million. Then, Pepsi parceled out the payments rather than paying upon his signing of the contract.

"Getting paid up front . . . I don't think that's ever been done before," the Jackson adviser observed.

Third and fourth, respectively, in the personal-endorsement sweepstakes are Lionel Richie and Willie Nelson. Richie reportedly earned at least $2.5 million a year for his multi-year stint with Pepsi and Nelson recently signed on with Wrangler jeans, also for at least $2.5 million, but neither received full payment upon signing.

In the ongoing so-called "Cola Wars" between Coke and Pepsi, the new Jackson contract will be seen by Madison Avenue as an enormous escalation. In addition to Richie, Pepsi has signed such luminaries as former vice presidential nominee Geraldine Ferarro to pitch the soft drink on television.

As part of its television presence, Coke was the founding sponsor and is underwriting much of the ambitious Hands Across America project, set to take place on May 25. A blitz of television commercials encouraging Americans to sign up wherever Coke is sold is expected to hit the tube over the next three weeks. In addition, the venerable cola company's logo is visible in magazine ads, shopping bags and billboards for the pop charity event that was created by Lionel Richie's manager, Ken Kragen.

In a further irony, Jackson sits on the board of directors of the USA for Africa Foundation, along with Richie. Hands Across America, which is seeking six million participants to pledge a minimum of $10 each to stand in the transcontinental line, is a project of the USA for Africa Foundation. The $50 million that Hands Across America is expected to net will be donated to America's homeless and hungry.

Hands Across America will be history, however, by the time Jackson's Pepsi duties get under way.

Under Jackson's new liaison with Pepsi, he will make at least two Pepsi television commercials, one of which will debut on next year's Grammy Awards.

In addition, Pepsi has the right to sponsor any concert tour the singer might plan either in the United States or abroad.

Jackson's personal manager, Frank Dileo, told The Times that no tour is currently being planned. Dileo and Jackson publicist Norman Winter both declined to comment on Tuesday's press conference.

But Dileo did confirm that Jackson's follow-up album to the multi-platinum "Thriller," as well as a 12-minute, three-dimensional movie Jackson made last year for Walt Disney Productions, are scheduled for September release. The George Lucas-produced, Francis Coppola-directed "Captain Eo" will become a permanent attraction at Disneyland here and EPCOT Center in Disney World in Florida.

A Michael Jackson signature line of clothing will also arrive at retail stores in September.

Under terms of the Pepsi contract, Jackson's first endorsement duty was to have taken place in July, when he was scheduled to serve as a Pepsi emissary to the Moscow Good Will Games. Pepsi is one of the sponsors of the Olympics-style international sports competition.

Since the Chernobyl nuclear power plant disaster, however, Dileo and other Jackson advisers are reevaluating the singer's planned appearance at the opening day of the games.

Ironically, in December, Soviet television zeroed in on Jackson as a prime example of how U.S. capitalists exploit talented blacks.

Rolling Stone (September 24, 1987)

In March 1986, Frank Dileo, John Branca and Pepsi president Roger Enrico completed Michael's second Pepsi deal for $15 million. Up front. In exchange Pepsi would get to sponsor Michael's world tour (which includes putting its logo on his tour book), and Michael would make two commercials, which could air for up to a year. There were three reasons Michael wanted the payment in full. Branca told Enrico one: Michael needed the income in 1986 for tax breaks that were available to him because of his purchase of the $47.5 million ATV Music publishing company (which owns nearly all the Beatles' songs). The second reason, which wasn't revealed, was that Branca and Dileo would instantly be able to renegotiate the deal to add as much as $10 million more for other participations. The third reason was completely irrational but perhaps the most important: the $15 million was about three times the previous record for such a deal (which was paid to the Jacksons by Pepsi in 1984), and getting the record-setting amount all at once would make Michael happy.

Frank Dileo, Michael’s manager, “Nashville Scene” (November 22, 2007) (archived)

Another managerial coup from Dileo’s Jackson stint was his negotiation for the Pepsi commercial. “I got [Pepsi CEO] Roger Enrico to pay me up front, which was never done before,” he says. “In fact, we cut the deal on the Pepsi jet. Once we agreed upon a price, I said to Roger, ‘OK, there’s just one more thing. You’ve got to pay it all up front.’ He says, ‘I don’t know.’ And I said, ‘Roger, did Elvis Presley ever do a commercial for Pepsi?’ He said no. I said, ‘Did The Beatles?’ He said no. I said, ‘What do you want to be—0 for 3?’ He shook his head and went into the men’s room and came back and said, ‘OK, you got a deal.’ ”