Pepsi Billion Dollar Sweepstakes
Encyclopedia
The Pepsi Billion Dollar Sweepstakes was a contest, announced by soft drink
company Pepsi Cola
on April 10, 2003, beginning on May 1 and ending on September 14, all of the same year. For the contest, Pepsi printed one billion
special codes, which could be redeemed either on the Pepsi website or via postal mail, and of which one million
were instant cash winners (eg a $20 instant prize). Of all the codes redeemed, which Pepsi estimated to be 200 million-300 million, 1,000 were chosen in a random drawing to appear in a two-hour live gameshow-style television
special.
On the evening of September 14, the final day of the contest, the now-defunct WB
network aired the special, entitled Play for a Billion. The 1,000 people who appeared on the show each received $1,000, and several of them were selected to play various games for a chance to win prizes. Each person was assigned a random 6-digit number, and a chimpanzee
backstage rolled dice to determine the grand prize number. This number was kept secret; the 10 players whose numbers were closest to it were chosen for the final elimination.
In this game, the players were offered a chance to quit the contest in exchange for a cash payoff, but only one at a time could claim it. If no one accepted a particular offer, the player who was farthest from the grand prize number was automatically eliminated and won nothing more. The offers, and the time delay before the results were revealed, increased in every round until only one player was left. That person won a guaranteed $1 million, which would become $1 billion if he/she exactly matched the grand prize number. This latter prize is the highest ever offered on any US game show, counting specials and lottery shows.
In the 2003 version, hosted by Drew Carey
, Richard Bay of West Virginia
claimed the $1 million guaranteed prize, but did not win the billion (his number was 2-2-8-2-3-8, the winning number was 1-7-8-2-3-8). The next year, Jon Kenney of Natick, Massachusetts
, won the million, but like Richard, did not win the billion. That year's show was hosted by Damon Wayans
and Tom Bergeron
and aired on ABC
.
Pepsi, unable to assume the risk of actually losing $1 billion, had an insurance company owned by Warren Buffett's
Berkshire Hathaway
, the largest stockholder in cola-rival Coca-Cola
, underwrite the contest, reportedly for a seven-figure premium.
The $1 billion prize was an annuity to be paid in 40 annual payments as follows:
Years 1-20: $5 million each (subtotal: $100 million after 20 years)
Years 21-39: $10 million each ($290 million after 39 years)
Year 40: $710 million (balloon payment)
There was a cash option
of $250 million if the $1 billion prize were to be won. The guaranteed $1 million was paid in lump sum
in both instances.
Soft drink
A soft drink is a non-alcoholic beverage that typically contains water , a sweetener, and a flavoring agent...
company Pepsi Cola
Pepsi
Pepsi is a carbonated soft drink that is produced and manufactured by PepsiCo...
on April 10, 2003, beginning on May 1 and ending on September 14, all of the same year. For the contest, Pepsi printed one billion
1000000000 (number)
1,000,000,000 is the natural number following 999,999,999 and preceding 1,000,000,001.In scientific notation, it is written as 109....
special codes, which could be redeemed either on the Pepsi website or via postal mail, and of which one million
Million
One million or one thousand thousand, is the natural number following 999,999 and preceding 1,000,001. The word is derived from the early Italian millione , from mille, "thousand", plus the augmentative suffix -one.In scientific notation, it is written as or just 106...
were instant cash winners (eg a $20 instant prize). Of all the codes redeemed, which Pepsi estimated to be 200 million-300 million, 1,000 were chosen in a random drawing to appear in a two-hour live gameshow-style television
Television
Television is a telecommunication medium for transmitting and receiving moving images that can be monochrome or colored, with accompanying sound...
special.
On the evening of September 14, the final day of the contest, the now-defunct WB
The WB Television Network
The WB Television Network is a former television network in the United States that was launched on January 11, 1995 as a joint venture between Warner Bros. and Tribune Broadcasting. On January 24, 2006, CBS Corporation and Warner Bros...
network aired the special, entitled Play for a Billion. The 1,000 people who appeared on the show each received $1,000, and several of them were selected to play various games for a chance to win prizes. Each person was assigned a random 6-digit number, and a chimpanzee
Chimpanzee
Chimpanzee, sometimes colloquially chimp, is the common name for the two extant species of ape in the genus Pan. The Congo River forms the boundary between the native habitat of the two species:...
backstage rolled dice to determine the grand prize number. This number was kept secret; the 10 players whose numbers were closest to it were chosen for the final elimination.
In this game, the players were offered a chance to quit the contest in exchange for a cash payoff, but only one at a time could claim it. If no one accepted a particular offer, the player who was farthest from the grand prize number was automatically eliminated and won nothing more. The offers, and the time delay before the results were revealed, increased in every round until only one player was left. That person won a guaranteed $1 million, which would become $1 billion if he/she exactly matched the grand prize number. This latter prize is the highest ever offered on any US game show, counting specials and lottery shows.
In the 2003 version, hosted by Drew Carey
Drew Carey
Drew Allison Carey is an American actor, singer, comedian, photographer, sports executive, and game show host. After serving in the U.S. Marine Corps and making a name for himself in stand-up comedy, Carey eventually gained popularity starring on his own sitcom, The Drew Carey Show, and serving as...
, Richard Bay of West Virginia
West Virginia
West Virginia is a state in the Appalachian and Southeastern regions of the United States, bordered by Virginia to the southeast, Kentucky to the southwest, Ohio to the northwest, Pennsylvania to the northeast and Maryland to the east...
claimed the $1 million guaranteed prize, but did not win the billion (his number was 2-2-8-2-3-8, the winning number was 1-7-8-2-3-8). The next year, Jon Kenney of Natick, Massachusetts
Massachusetts
The Commonwealth of Massachusetts is a state in the New England region of the northeastern United States of America. It is bordered by Rhode Island and Connecticut to the south, New York to the west, and Vermont and New Hampshire to the north; at its east lies the Atlantic Ocean. As of the 2010...
, won the million, but like Richard, did not win the billion. That year's show was hosted by Damon Wayans
Damon Wayans
Damon Kyle Wayans is an American stand-up comedian, writer and actor, one of the Wayans brothers.-Early life:Wayans was born in New York City, New York, the son of Elvira, a homemaker and social worker, and Howell Wayans, a supermarket manager...
and Tom Bergeron
Tom Bergeron
Tom Bergeron is an American television personality and game show host, best known as the host of the ABC reality series Dancing with the Stars and host of America's Funniest Home Videos . He was also host of Hollywood Squares and a fill-in host for Who Wants to Be a Millionaire...
and aired on ABC
American Broadcasting Company
The American Broadcasting Company is an American commercial broadcasting television network. Created in 1943 from the former NBC Blue radio network, ABC is owned by The Walt Disney Company and is part of Disney-ABC Television Group. Its first broadcast on television was in 1948...
.
Pepsi, unable to assume the risk of actually losing $1 billion, had an insurance company owned by Warren Buffett's
Warren Buffett
Warren Edward Buffett is an American business magnate, investor, and philanthropist. He is widely regarded as one of the most successful investors in the world. Often introduced as "legendary investor, Warren Buffett", he is the primary shareholder, chairman and CEO of Berkshire Hathaway. He is...
Berkshire Hathaway
Berkshire Hathaway
Berkshire Hathaway Inc. is an American multinational conglomerate holding company headquartered in Omaha, Nebraska, United States, that oversees and manages a number of subsidiary companies. The company averaged an annual growth in book value of 20.3% to its shareholders for the last 44 years,...
, the largest stockholder in cola-rival Coca-Cola
Coca-Cola
Coca-Cola is a carbonated soft drink sold in stores, restaurants, and vending machines in more than 200 countries. It is produced by The Coca-Cola Company of Atlanta, Georgia, and is often referred to simply as Coke...
, underwrite the contest, reportedly for a seven-figure premium.
The $1 billion prize was an annuity to be paid in 40 annual payments as follows:
Years 1-20: $5 million each (subtotal: $100 million after 20 years)
Years 21-39: $10 million each ($290 million after 39 years)
Year 40: $710 million (balloon payment)
There was a cash option
Present value
Present value, also known as present discounted value, is the value on a given date of a future payment or series of future payments, discounted to reflect the time value of money and other factors such as investment risk...
of $250 million if the $1 billion prize were to be won. The guaranteed $1 million was paid in lump sum
Present value
Present value, also known as present discounted value, is the value on a given date of a future payment or series of future payments, discounted to reflect the time value of money and other factors such as investment risk...
in both instances.