Hat's off to the winner: How Pepsi landed Dale Jr. (cont'd)

Santana remembers an initial meeting with Hendrick in the team owner's trailer at the July 7 Pepsi 400 at Daytona, where he again tried to get first dibs. But those involved said if there was a single critical meeting, it was one just after Baseball's All-Star Game in San Francisco on July 10.

Since-deposed Pepsi CEO and president Dawn Hudson, along with Santana, Stamatis, Dzanis and Bloomberg, flew by private jet from the West Coast to Hendrick Motorsports' headquarters in Concord, N.C., just outside of Charlotte. On the other side of the table, the Hendrick team included the team owner, Perkins, Earnhardt, Elledge and Thayer Lavielle, vice president of marketing and brand development at JR Motorsports.

Sports Illustrated: Feb. 18, 2008

It was the first time all the dealmakers met face-to-face. A pitch book was handed out and the tone, Dzanis said, was, "We're serious. We hope you are." A scheduled two-hour meeting lasted closer to four hours.

"I know I got home really late that night," said Perkins, who acknowledged that the familiarity between the two sides helped negotiations progress briskly. "It made for an easy dialogue."

By the end of the meeting, Junior had already expressed an interest in designing the new Amp car. He was then handed a stack of new businesses cards with the title that read simply: "Manager -- Pepsi Racing."

"The message was clear," Bloomberg said. "We wanted to put him to work."

As their jet took off for New York that evening, the Pepsi team celebrated with toasts and high fives. "That's when we felt it really was going to get done," Santana said. "Emotionally, I felt we were on the same track." Perkins said the team at Hendrick shared that enthusiasm. "Everyone left there feeling good about it," he said.

Because Junior's interest was catalyzed by his childhood memories of Mountain Dew, explaining to him that the Dew he grew up with was not sponsoring the car may have been the toughest part of the deal. Mountain Dew was still part of Amp's brand name and Junior still ended up wearing white and green.

"I'd call it more of an education than an 'upsell,' " Tatum said. "He had to understand the market dynamics and that, if we were going to get the deal done, it was going to be with Amp, because that's where Pepsi was placing their cannons."

Still, Earnhardt had to be sold on the idea. The strategy behind marketing Junior has been to partner with a few select, elite brands that are authentic to his likes and tastes. Wrangler has been a longtime sponsor, while Sony and Adidas were added to the fold in 2007. The idea of a primary sponsor with so little market share was cause for a brief pause.

"Let's be honest" Perkins said. "There's a certain perception with energy drinks -- hard-living, extreme personalities. There's definitely a persona to it. But as they went through their plan and positioned it as 'everyone's energy drink,' that it was something more mature, more refined than other brands in the category. You could see that it appealed to him. But, yeah, that was a sort of sales process."

Even before financial terms were finalized with Junior, Pepsi executives began rounding out their plan. They felt confident enough to have a preliminary discussion with Talladega Superspeedway president Rick Humphrey about buying title sponsorship to a 2008 race at the track long known as Junior's favorite. In a deal completed later, the Oct. 5 Sprint Cup race at Talladega became the Amp Energy 500.

There were more meetings to come. National Guard, like Pepsi, expressed an interest in sponsoring Junior's car and had a relationship with Hendrick from sponsoring the No. 25 car driven by Casey Mears. Because of those pre-existing relationships, Hendrick said the sponsorship was theirs to lose, which they never did. Hendrick met with National Guard officials in late July and in August, then brought Pepsi and National Guard officials back for their first joint meeting.

The co-primary is a model that has worked for Hendrick before. On Jeff Gordon's No. 24, DuPont shares space with Pepsi and Nicorette.

"It was a chance for everyone to get to know each other," Perkins said.

"Each meeting was extremely positive and it stayed that way each time we met. The partnership was something that everyone felt good about."

By then, most of the heavy lifting was done. Other than the number of personal appearances Earnhardt would approve, terms of the deal were worked out in relatively easy fashion. Pepsi and Hendrick officials went to a Los Angeles Galaxy game in late July where Beckham was a no-show, and the financials were finalized during a three-hour meeting later at the Four Seasons in Beverly Hills.

A letter of intent followed. The deal still had to be approved by Pepsi's board in September, and the sell-in process offered paradigms in which endorsers and product were large, inseparable and symbiotic.

Hudson was armed with convincing examples, such as Nike and Michael Jordan, EA Sports and John Madden, Canon and Andre Agassi and George Forman's ubiquitous grill. The board was convinced.

"Everyone got the appeal right away, and a lot of people in there were charged up about it, but in a boardroom, that goes away after five minutes," Santana said. "Ultimately, we had to make the business case, and that was probably the hardest part. We could take this same money and spend it on a TV campaign and the probability of it being able to deliver you an instant fan base is not high. So the case that we made was that his fans would become our fans."

The announcement of the Junior/Amp alliance at a Pepsi bottlers' meeting in Dallas on Sept. 19 elicited an unprompted standing ovation of nearly two minutes.

There's applause within Pepsi as well. Earnhardt won the Feb. 9 Budweiser Shootout and the first Gatorade Duel 150 five days later, and Amp's sales volume has doubled during the past six months. Name a major retailer -- Sam's Club, Kroger, Wal-Mart -- and it has bought into a massive activation program that will run across the NASCAR season. If Junior keeps winning, Amp won't have any problem with brand recognition.

He finished ninth in the Daytona 500 after spending a race-high 196 of 200 laps in the top 15.

A few days before the 500, Santana was marveling about his new No. 1 endorser, who was splashed on top of his car hood across the cover of Sports Illustrated.

Junior's pose shows more car and the gleaming green logo of Amp than it does of the driver -- a remarkable boon for a brand still seeking widespread awareness.

"Y'know, you can't buy exposure like this," Santana said, looking down at the SI cover. "Or maybe you can."

Terry Lefton and Michael Smith are reporters with SportsBusiness Journal.