Michael Phelps won his eight golds. Now it’s time for him to cash in on his success.
Estimates of Phelps’ potential earnings range from $40 million to $100 million. But if Phelps and his representatives at Octagon are smart, they will not accept just any offer that comes their way.
More likely, they will seek relationships with about a half-dozen major companies that fit well with Phelps’ accomplishments, personality and interests. Most likely, Phelps and his agents will identify categories of sponsorship, then seek to find the best fit within those categories.
Here’s a basic breakdown of the possibilities that lie before them:
Food:Phelps will have his face on cereal boxes, probably will land a deal with McDonald’s and likely will continue his existing relationship with PowerBar. But stories of Phelps eating pounds of pasta and pizza on race days suggest he could do even more in this area. A deal with Pizza Hut seems like a sensible fit and would appeal to the young demographic the restaurant targets. (He and his teammates are already getting free pasta and pizza for a year from Pizza Hut.)
Phelps has a deal with PureSport, a company that makes sports drinks with protein. (He supposedly drank 1,000 calories worth of the stuff each day in Beijing.) If Phelps believes in the product, he may stick with it. But Gatorade also is working on new drinks designed to improve performance and recovery, and the company has shown a willingness and ability to get top athletes like Tiger Woods and Michael Jordan. Meanwhile, POWERade and its parent company, Coca-Cola, could be players in this category.
Sporting goods:This one could be tricky. Phelps already has a deal with Speedo, which is expected to give him a $1 million bonus for breaking Mark Spitz’s record of seven gold medals. But chances are Nike and Adidas also would like a piece of Phelps and are more likely to be in a position to overpay to use him exclusively.
Nike makes swimsuits, but few swimmers used them in Beijing because Speedo’s LZR suits performed so much better in the trials. (Nike even allowed some of its swimmers to wear the Speedo suit as long as the logo was covered.)
To steal Phelps, Nike or another company either must overpay by a ridiculous margin and develop a suit that can compete with Speedo or provide Phelps with a deal similar to the one Nike gave Woods, one that allows the athlete to endorse the product without using it in competition.
Consumer electronics:Phelps should appeal to makers of high-definition televisions and stereo equipment. Computer-maker HP already has a deal with several athletes, including Olympic gold medalist snowboarder Shaun White. Apple also could get involved here - Phelps frequently was seen listening to his iPod before hopping into the pool. His existing deal with AT&T; could be broadened to include the iPhone.
Financial services:Phelps has a deal with Visa, but he could expand his presence in this category by striking a deal with a bank or major investment firm. Bank of America, a major Olympic sponsor, is a sensible fit. Companies like HSBC Direct and ING Direct, which seem to cater to younger consumers, also make sense.
Cars:Sports cars go fast. Michael Phelps goes fast. There’s an obvious tie-in there. Ideally, Phelps will want to endorse a car he actually would drive, so ads featuring Phelps alongside a Kia Sorrento are unlikely. And ironically, his status as an American Olympian may work against him here because he could never get away with endorsing a foreign automaker.
Given the state of the auto industry, no one is going to overpay to get Phelps. But General Motors could benefit from having Phelps endorse its upcoming line of hybrid and fuel cell vehicles, and it’s plausible to see the swimmer sitting inside a Corvette or Mustang. It’s also possible a company like Oldsmobile or Cadillac will attempt to partner with Phelps in an effort to attract younger drivers.