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ONLINE DOCUMENT: PEPSICO TO FEEL FORCE OF STAR WARS

Food an drinks giant PepsiCo has acquired exclusive promotional rights to the Star Wars film series in a worldwide deal which could be worth up to $2 billion in terms of advertising investment and merchandise sales.

The agreement, clinched with Lucasfilm, the Californian entertainment software company run by George Lucas, director of the Star Wars movies, forms part of a trend for film makers to offset escalating marketing budgets by joining forces with promotional partners from other industries.Walt Disney is reportedly in talks with McDonald's, the fast food chain, over a similar $2 billion 10-year agreement. Until recently, entertainment groups negotiated such deals on an ad hoc basis, as MGM/UA did for GoldenEye, the latest James Bond movie, which received $50-million of promotional backing from other companies, including $15-million from BMW cars.

The Star Wars deal is the most valuable promotional agreement in the entertainment industry to date. It also marks the first time that all PepsiCo's international interests - which include Pepsi-Cola drinks and Frito-Lay snacks together with the Pizza Hut and Taco Bell fast food chains - have participated in the same marketing initiative.

The agreement will come into force next February when the three existing Star Wars films - "Star Wars," "The Empire Strikes Back" and "Return of the Jedi" - are re-released in a Star Wars Trilogy Special Edition with additional footage, enhanced special effects and digitally remastered soundtracks.

PepsiCo will then introduce products and promotions using the Star Wars characters for all its brands and restaurants, staging advertising campaigns to publicize the films and its own related activities.

The promotions will continue with the release of Star Wars films based on earlier books in the Star Wars series. Lucasfilms is in pre-production of the first of these and expects to start principal photography next year.

Star Wars is by far the most successful film series ever. All three films are among the 10 highest earners at the US box office, and have made substantial additional revenues from video cassettes, toys and video games.

(Distributed by Scripps Howard News Service.)