The organization had said earlier in the day that it would call an immediate boycott over what it called Pepsi's "cultural disrespect" of hip-hop. HSAN Chairman Russell Simmons first called for a boycott last week, accusing the company of applying a double standard for hip-hop in its national TV advertising.
Simmons said the company demonstrated disrespect for hip-hop culture by dropping an ad campaign for Pepsi-Cola featuring rapper Ludacris because of public protests over the sexually explicit context of his lyrics -- then featuring foul-mouthed metal rocker Ozzy Osbourne in ads for one of its soft drinks.
Simmons said Tuesday that HSAN had reached a "multi-million dollar, multi-year agreement" with the company and the Ludacris Foundation. He told United Press International Thursday that he decided to renew the call for a boycott because the company had not yet signed on to a formal agreement.
"We were planning to announce a boycott (Thursday)," said Simmons. "We were waiting for some time for the formal agreement ... but it didn't come through."
Simmons said Pepsi accepted a formal agreement Thursday, calling for the company to contribute "millions of dollars" to the Ludacris Foundation -- a non-profit organization founded by the rapper.
When HSAN first raised the threat of a boycott last week, the organization demanded that Pepsi not only donate $5 million to the foundation, but also issue a public apology to Ludacris and reinstate his ad. Asked Thursday whether the company had issued a public apology, Simmons said, "The millions of dollars is pretty much the same thing."
Pepsi spokesman Bart Casabona said details have yet to be worked out regarding how much money the company will donate, and which charitable organizations would receive the donations.
"We've created a six-member steering committee that will determine how the funds will be directed to the local charities," said Casabona. "The who and the how much hasn't been determined."
Casabona said the steering committee would consist of three members from Pepsi-Cola, two members representing HSAN and one member representing the Ludacris Foundation.
Simmons said Ludacris will not be featured in any future Pepsi ads.
"We had a discussion about him possibly doing new commercials," said Simmons. "He rejected it. He didn't want any gain for himself personally. He said all he wants is an investment in his community."
Casabona said that question had "really never been a part" of the agreement.
Simmons said he hoped the episode would make Pepsi "more sensitive" about hip-hop culture because it is an important part of the company's market.
"I hope they benefit from the kinds of investments they're making in our community," he said.
"We remain 100 percent committed to multicultural marketing," said Casabona.
When HSAN and Pepsi announced a settlement on Tuesday, the company said it was planning "an extension of our longstanding community relations and urban marketing programs that will focus on helping create opportunities for young people to get involved in art and music."
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