Fight for Phelps

Despite today’s uncertain economic times, Olympic champion Michael Phelps does not need to worry. 
Precious metals are considered a more secure investment then the increasingly risky stock market, and the swimmer has no shortage. Phelps may be the proud owner of enough gold to fetch tens of thousands of dollars if he were to melt his 14 gold medals and sell them for their valued weight, but his record-setting performance at the Beijing Olympic games is sure to earn Phelps a fortune unseen by any other Olympic athlete.
In Beijing, Phelps turned in one of the most dominating performances not just in Olympic history but in sports’ history as well. The 23-year-old won gold medals in all eight of his events and set seven world and eight Olympic records on the way. 

Phelps’ unforgettable performance rendered the swimmer an Olympic legend and launched him into the stratosphere of national and international celebrity. 
Entering the 2008 games, Phelps was earning an estimated $5 million annually from corporate sponsorships that included deals with Speedo, Powerbar, Visa, AT&T and Omega Watches. 
After exceeding pre-Olympic hype and breaking Mark Spitz’s 36-year-old record of seven gold medals in one Olympics, Phelps stands to enter elite company in the realm of athletic endorsements. 
Phelps’ agent, Peter Carlisle, told the Wall Street Journal he expects Phelps’ new-found celebrity to prove extremely lucrative for the former University of Michigan Wolverine.
“What is the value of eight golds in Beijing before a prime-time audience in the U.S?” Carlisle told the newspaper. “I’d say $100 million over the course of his lifetime.”
David Harrow of the National Sports Lawyers Association said he could see the numbers climbing even higher than that.
“He may be at $30, $40, $50 million a year in endorsements after all this is said and done,” said Harrow in an Aug. 18 story reported by John Vause of CNN. 
Speedo has long been the predominant company in the swimming world, but after Phelps’ record-setting performance that made him the most decorated Olympian of all time with 14 career gold medals, the company will face an intense bidding war with Nike over Phelps’ sponsorship. 
The majority of swimmers in Beijing wore Speedo’s revolutionary LZR Racer suit, but it may be the only advantage Speedo offers Phelps over Nike.
On Aug. 18, the Wall Street Journal reported that Phelps’ worth to Nike could be unprecedented.
“Michael Phelps would be worth $40 or $50 million to Nike,” said Howard Bloom, who teaches sports management at Algonquin College in Ottawa and has worked with several Olympic athletes, “He could literally allow them to launch a massive swimwear company and I think you are going to see an incredible bidding war for him.”
By comparison, basketball superstar Lebron James gets just under $13 million to wear Nike basketball shoes. 
Marketing a swimmer could prove difficult, but Nike managed to take advantage of a similar situation, turning cyclist Lance Armstrong into a worldwide icon. 
Over 40 million Americans and 75 million viewers worldwide watched Phelps break the world record in the 100-meter butterfly in a photo finish for his sixth gold medal. The theatre Phelps created that evening and throughout the games should help him stick in the consumers’ memories for some time.
Phelps has already grown tremendously in celebrity status since the closing ceremonies in Beijing. Appearances on talk shows, Saturday Night Live and even the HBO series Entourage helped cement him as more than an Olympian, but as a recognizable face in popular culture.
The affirmation of Phelps as not simply a flash in the pan, but as a celebrity with the ability to reach iconic status is crucial for sponsors. For Phelps’ appeal to last past the next few months he will have to make consumers care about swimming more than once every four years.  Armstrong was able to remain relevant in the eyes of consumers despite competing in the Tour De France just once a year.
Visa executives think Phelps’ exposure on a worldwide scale will greatly benefit the company. 
“Michael is leaving Beijing as a global sports icon,” said Michael Lynch, head of Visa’s global sponsorship management following the closing ceremonies. “We look forward to new opportunities post-Beijing that will reinforce our relationship with him on a global stage.”
Phelps has already been marketed in international markets. 
In 2005, Phelps signed what was speculated to be the richest endorsement deal for an Olympic athlete at the time, signing on with the Hong Kong-based MP3 player company Matsunichi.
Following Phelps’ performance in Beijing, the deal surpassed the $4 million it was speculated to be worth three years ago. 
Much was made during the Olympic Games about Phelps’s diet. Phelps consumed 12,000 calories daily, including the consumption of about 2,000 calories worth of energy drinks each day.
His energy drink of choice, PureSport, intends to launch its first national ad campaign with Phelps as the spokesman. Each day Phelps reportedly consumes two pounds of pasta and an entire large pizza.  The publicity surrounding his diet sparked Pizza Hut to give Phelps and the rest of the U.S. swim team free pizza and pasta for a year. 
The frenzy surrounding Phelps and the capitalization of his Olympic success has stretched beyond just the swimmer.  Last month, Phelps’s mother Debbie signed a reported six-figure deal with the clothing company Chico’s.
By the conclusion of the 2012 games, Phelps could approach unchartered territory for Olympic athletes regarding sponsorships and endorsements.
Golfer Tiger Woods makes $87 million dollars annually in endorsements and is expected to surpass $1 billion in career earnings as early as 2010. Basketball legend Michael Jordan made around $500 million in his 14-year playing career.
Phelps will likely never approach those numbers, but if he remains relevant in the public’s conscience and the bidding war for his endorsement comes to fruition, then his agent’s estimation of $100 million in lifetime earnings will be a modest one.
A contract with Nike for the amount some marketing experts speculate would mean Phelps would surpass $200 million in career earnings. If Phelps continues his domination in London in 2012 he stands to make tens of millions more following those games.
Phelps will reap the benefits similar to Olympic champions of the past for a brief time.  He will enter the eight-figure income range by year’s end. 
It remains to be seen whether Phelps is simply a case of the “it” man of the moment or if his fame and marketability will last after Olympic memories fade.
But for now, Phelps is a modern-day King Midas, as seemingly all he touches turns to gold.
colter.nuanez@umontana.edu