Companies vie to hand Phelps money

Swimmer's star is high, but future fame uncertain

August 20, 2008|By Childs Walker | Childs Walker,Sun reporter

It was one of the first questions fans started asking after Michael Phelps achieved the improbable feat of winning eight gold medals in one Olympics: What will he be worth?

Companies are already lining up to hand Phelps millions of dollars to associate himself with their products. He could soon be the face of a revamped and expanded swimming headquarters in North Baltimore. Some have even suggested that Hollywood snap him up to star as an aquatic superhero.

Phelps has secured his status as the star of these Olympics, but he has gone beyond that, said Bob Dorfman, who studies the marketing potential of Olympians for Baker Street Partners of San Francisco.

"I can't see any other story surpassing his," Dorfman said. "People just can't believe what he's been doing. There is a superhuman aspect to it. From that standpoint, he's hard to top."

Some marketing experts wonder if Phelps will remain hot during the long downtime between Olympics but for now, they say he has doubled his earning potential to at least $10 million a year and could become one of the richest Olympic endorsers in history.

Companies such as Visa, Speedo, Omega, Hilton and AT&T agree and have signed deals with the all-time leading gold medal winner. Visa had a new commercial, narrated by actor Morgan Freeman, ready to roll as soon as Phelps won his last race. AT&T's commercials, featuring a young woman as an obsessed "Phelps Phan," have been ubiquitous throughout the games.

Kellogg's will put Phelps' mug on Corn Flakes and Frosted Flakes, according to Access Hollywood. The swimmer's longtime agent, Peter Carlisle, told The Wall Street Journal that Phelps' Beijing performance will double his endorsement income and be worth an extra $100 million over his lifetime.

Phelps could certainly pull in eight figures over the next year, said Ryan Schinman, founder of New York City-based Platinum Rye Entertainment, which matches celebrity endorsers with Fortune 500 companies.

"Right now, the guy's got the world on a string," he said. "He's in that upper realm, not in terms of income but in terms of profile, with Tiger Woods and LeBron James and Lance Armstrong."

Phelps would be wise not to jump at every deal that comes his way, he said. Instead, the swimmer should expand and lengthen his existing deals with high-end companies such as Visa, AT&T and Speedo. Those companies must in turn come up with campaigns that burn Phelps into customers' minds for a long time to come.

He should capitalize now, Schinman said, because given the low profile of swimming, Phelps' feats could be out of the spotlight come football season.

One person who doesn't seem very interested in marketing questions is Phelps.

"If Bob [Bowman] and I were in it for the money, I think we'd be in a different sport," he said in Beijing. "I'm having fun at what I do, and I do it because I love it."

Even if money is secondary to Phelps, he has said he wants to change his sport. He hasn't clarified what that means, but if he were to fuel a swimming boom, he wouldn't be the first athlete to wield such power.

America went chess crazy in the mid-1970s after Bobby Fischer became world champion. A tennis boom followed the late-1970s exploits of Jimmy Connors, Chris Evert and John McEnroe. Even if such crazes didn't last, they made those competitors rich.

Marketers are taken with Phelps' regular-guy persona. In post-race interviews, he sounded confident and driven, yet a little taken aback by his achievements. People can imagine talking to him on the sidewalk, but place this aw-shucks character in the right context, and he's capable of otherworldly feats.

Nike used a similar formula to launch Michael Jordan to megastardom in the 1980s. He was a soft-spoken young man from a small city in North Carolina, but stick him in a pair of sneakers, show him a hoop and he could fly.

Phelps entered the Beijing games as one of the brightest stars in the Olympic firmament. Even without eight golds, he was projected to earn $5 million in endorsements this year and millions a year for the foreseeable future.

But Phelps was not one of the most famous athletes in the world, said Steven Levitt, whose company, Marketing Evaluations Inc., devises Q scores to measure celebrity appeal.

Only 39 percent of those polled in March were familiar with Phelps and, of those, 22 percent considered him a favorite performer, Levitt said. Tiger Woods, for example, was familiar to 89 percent of those polled and viewed favorably by 48 percent of that group. Levitt expects Phelps' numbers to rise dramatically in next spring's study.

By surpassing Mark Spitz, Phelps transcended sport in a way that few athletes ever do.

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