Sep 04, 2009 at 07:55 PM
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KFC, NFL Ink Marketing Pact For Upcoming Season

From Dow Jones:

NEW YORK -(Dow Jones)- After a tryout, Yum Brands Inc.'s (YUM) KFC and the National Football League are kicking off a marketing deal for the upcoming season that provides another platform for the chicken chain to display its new image.

The agreement makes KFC the lone fast-food marketing partner for the NFL, which had been without one since a pact with Burger King Holdings Inc. (BKC) ended after the 2007 season.

Details and terms of the marketing deal are being kept under wraps, though it is likely to include cross-promotion of NFL-tagged items at KFC stores. The NFL season kicks off Thursday.

"We'll have details to share as the season goes on," KFC spokesman Rick Maynard said.

Last season, the NFL signed KFC as the "official wing sponsor" of its playoffs and championship game in a deal that included television and in-store advertising. The arrangement also allowed the chain to slap the NFL and Super Bowl logo on buckets and drink cups, and included a drawing to win prizes like a trip to this season's Super Bowl.

The deal failed to provide a big lift to KFC's sales. The chain posted " extremely poor" sales in January, the height of the playoff season, though that came amid a big retrenchment in spending following the financial meltdown.

Yum has since re-energized KFC with the introduction of its grilled chicken products, which helped give KFC a double-digit boost to same-store sales in its latest quarter. Yum is counting on the turnaround of KFC to help boost U.S. earnings, while its overseas business continues to drive growth.

The NFL had been without a fast-food marketing partner since the 2007 season, when a three-year deal ended with Burger King that had featured, in part, commercials with the chain's mascot superimposed into football highlights.

The league's prior fast-food partner, McDonald's Corp. (MCD), ended its agreement in 1998.

The NFL recently signed up IHOP, owned by DineEquity Inc. (DIN), as its full- service restaurant partner. Through October, IHOP will be featuring a menu with football-themed dishes and will also run television commercials with Philadelphia Eagles quarterback Donovan McNabb and Arizona Cardinals receiver Larry Fitzgerald.

The NFL also recently signed Procter & Gamble Co. (PG) to a multiyear deal that allows the consumer products giant to slap "Official Locker Room Product of the NFL" label on Old Spice deodorant and Head & Shoulders shampoo. The Wall Street Journal reported the deal was valued at $10 million a year or more, citing one person familiar with the pact.

The Journal also reported that sports leagues are looking for new sources of revenue to replace ad dollars lost from the financial services and auto manufacturing industries. Spending on sports sponsorship deals in North America are expected to grow just 0.7% to $11.48 billion this year, after growing almost 15% last year, according to IEG, a research company owned by WPP PLC.

-By Paul Ziobro, Dow Jones Newswires; 212-416-2194; [email protected]