Thursday, August 21, 2008

The 2008 Beijing Summer Olympics – catching up with Michael Phelps

When Sports Business News last visited Michael Phelps yours truly told The Wall Street Journal Nike would cast their eyes lovingly on Phelps and by the time their courtship with Phelps was over Phelps could sign a multi -year agreement with the sport industries biggest brand name in excess of $50 million. We’ll focus on why Nike, Speedo and Adidas are all destined to become involved in a bidding war for the swimmers services next week. Today we’ll catch up with the man who won eight gold medals in Beijing. It’s been a busy few days since Phelps claimed his eighth Beijing gold medal Saturday evening (Sunday morning) in Beijing.

"Michael Phelps is going to have no problem from here on out," said Scott Sanford, managing director at the Dallas-based Davie-Brown talent group in an ESPN report. "He will have star power."

"He has transcended himself into a position that is going to sustain him for a long time," Sanford said. "He has separated himself from just being a swimmer."

For Phelps Beijing was truly an all or nothing proposition. Win the eight gold medals and the world would be his. Win seven gold medals (or less) he’d have his 15 minutes of fame but his road wouldn’t be paved with gold.

"Marketing potential is such a tough question," Evan Morgenstein Mark Spitz’s wrote in an e-mail from Beijing to ESPN. "It's defined by whether he is thought of by performance or stature/story. If America believes his struggle to achieve eight golds has a broader good than just victories, he will earn millions of dollars forever."

The key remains for Phelps agents to strike while the iron is hot – leverage the opportunity their client has provided them with.

The August 25 edition of Sports Illustrated features a smiling Michel Phelps with his Beijing hardware draped around his neck. The cover reprises a 1972 Sports Illustrated cover that honored Mark Spitz after he won seven gold medals at the 1972 Munich Games. It was back-to-back SI covers for Phelps. He was featured on the magazine’s August 18 edition cover as well. Now if that where it – everyone would be missing the big picture. SI’s July 28 Beijing preview edition cover had Phelps on its cover.

Three times in four weeks is amazing for any athlete. Phelps has also appeared on SI’s covers on February 3, 2005, August 23, 2004 and August 2, 2004 (SI’s Athens Olympic preview).

Phelps has left Beijing (he won’t be carrying the American flag in Sunday’s closing ceremonies). Phelps arrives in Baltimore today (he won’t be home very long). Phelps as one sports agent suggested might be well advised to remember his B-More roots.

"Some of the big companies like Octagon are very global and they have to be careful with that," said John Maroon, who runs a public relations firm in Baltimore and has worked with Ripken in various capacities for the past 13 years. "They have to be careful with that or it's going to reflect on Michael. His brand and his worth can just keep going and going. Baltimore is a town that really embraces its own if its own embraces it."

"Right now, it seems like the biggest thing in the world and we'll be talking about this for years and years," Maroon said. "I like Michael and I wish him the best, but the truth is that people move on.

"He needs to strike while the iron is hot."

London’s 2012 Olympics begin on July 27, 2012 and run through August 12, 2012. London Olympic organizing officials working with Visa (one of the International Olympic Committee’s TOP sponsors) has arranged for Phelps to be in London Sunday to participate in part of the official ‘handoff’ when Beijing’s mayor hands the Olympic flag to London’s mayor symbolizing the passing of the Olympic Games from Beijing to London.

Representatives of the 2012 team, including the Mayor of London Boris Johnson, will be in Beijing to collect the flag and be part of an eight minute section of the closing ceremony when London will look forward to the next Summer Games. David Beckham and singer Leona Lewis are rumored to be part of the ceremony.

Rumors aside – Michael Phelps will be front and center Sunday in London.

Phelps, who is the most successful Olympian of all time with 14 gold medals in total, said: "It will be a great opportunity to celebrate the success of the Beijing Games and kick off the countdown to London 2012."

Steven Levitt, whose company, Marketing Evaluations Inc., devises Q scores to measure celebrity appeal offered The Baltimore Sun a look at Phelps before he won eight gold medals.

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. His story headlined national news broadcasts for a week. Celebrity news publications and programs such as US Weekly, Inside Edition and have taken an interest in his personal life. One posting on the movie-geek Web site Ain't It Cool News said Phelps should look into playing Marvel Comics' superhero Sub- Mariner. "He is a man from Atlantis," gushed the site's creator, Harry Knowles.

On another Internet frontier, more than 1 million people have signed up to be fans at Facebook.

Bob Dorfman, who makes a living looking at the marketing potential of Olympians for Baker Street Partners of San Francisco knows Phelps is the real deal.

"I can't see any other story surpassing his," Dorfman told The Baltimore Sun. "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."

"He is much bigger than his sport," said Dorfman, who could see Dancing With the Stars coming after Phelps or MTV building a new reality program around him.

"It could be Michael Phelps teaching other celebrities to swim like Olympians or I don't know what," Dorfman said. "But he's at the level where I could see people imagining stuff like that around him."

One deal that Phelps handlers have worked out since Saturday – Phelps is about to become best friends with Tony the Tiger.

Phelps can add one more milestone to the list. After earning eight gold medals in the 2008 Olympic Games, Michael Phelps has earned a place of honor on the front of specially-marked Kellogg's Frosted Flakes(R) and Kellogg's Corn Flakes(R) cereal boxes.

The gold medal winning Olympic champion from Baltimore, Maryland will be featured on Kellogg's Corn Flakes and Kellogg's Frosted Flakes cereal packages that are expected to hit grocery store shelves across the U.S. in mid-September. The boxes will feature images of Phelps during what were some of the most memorable moments of this summer's Olympic Games.

"As an Official Sponsor of the 2008 U.S. Olympic Team and a proud sponsor of Phelps, it is only fitting that Kellogg Company feature this world-class athlete on its iconic boxes of Kellogg's Corn Flakes and Kellogg's Frosted Flakes cereals," said Marta Cyhan, Vice President, Global Promotions, Kellogg Company. "Michael embodies the values behind our Frosted Flakes Earn Your Stripes(TM) program. He knows that winning is not just about the glory that comes with gold medals, but about good sportsmanship, working hard and being your best."

What makes this agreement “interesting” Phelps being married to Tony the Tiger as opposed to Wheaties. According to several published reports Michael passed on the traditional Wheaties box because his breakfast of champions is sugar-drenched Kellogg's Frosted Flakes.

Before Phelps left Beijing Tuesday he did take one final lap of a pool and of course it was linked to an endorsement agreement. And of course Phelps final Beijing swim wasn’t in the Games Water Cube.

The 16-time Olympic medalist took to the pool at the Hilton Beijing to swim the 6,250th and final lap of the "Hilton Swim to Beijing Relay," a multi-city charitable event contributing $100,000 to the USA Swimming Foundation to fund swim education programs across the United States.

In celebration of the 2008 Olympic Games, Hilton Hotels & Resorts partnered with the USA Swimming Foundation and embarked on an ambitious relay of 6,250 laps - each lap symbolizing one of the miles between Los Angeles, the relay's starting point, and Beijing. The "Hilton Swim to Beijing Relay" began with a splash at the Hilton Universal City in Los Angeles where Phelps swam the initial lap in November 2007. After making its way through five U.S. cities, the "Hilton Swim to Beijing Relay" concluded with a ceremonial final lap by Phelps in the pool of the Hilton Beijing following his final competition of the 2008 Olympic Games.
"After representing my country and competing in the Olympics, Hilton gave me another great reason to get back in the pool," said Phelps. "By being a part of this campaign I'm able to help support swim education programs across the nation and give young people the chance to experience the power of the sport. Swimming is much more than a fun activity and great form of exercise. It teaches self-discipline and dedication--two important qualities that one can draw on to succeed both in and out of the pool."

Phelps list of sponsors include:

Phelps' sponsors, according to his agents at Octagon, which declined to specify the value of the deals:

Speedo USA: maker of swimsuits, a licensed brand of the Warnaco Group Inc.

Visa Inc.: credit card company

Omega: luxury watchmaker, a unit of Swatch Group AG

Hilton Hotels Corp.: hotel chain

PowerBar: nutrition bar from Swiss chocolate maker Nestle SA.

AT&T Inc.: communications provider

Kellogg Co.: maker of Frosted Flakes, Cheez-Its and Eggo waffles

Rosetta Stone Ltd.: language-learning software maker

PureSport: sports performance beverage, made by Human Performance Labs Internet site for swimmers

In the four days since Phelps date with destiny arrived there remain plenty of naysayers who simply don’t believe Michael Phelps will enjoy long-term success in the corporate marketplace.

"It is possible but unlikely for the simple reason that swimming commands our attention only once every four years, while Tiger and LeBron enjoy weekly, even daily coverage during their respective seasons," said John Davis, a professor of marketing at the Lee Kong Chian School of Business at Singapore Management University in an MSNBC report. His book "The Olympic Games Effect — How Sports Marketing Builds Strong Brands" was published this month.

"Swimming is really not the topic of our typical sports conversations once the Olympics end, so sustained visibility will be a challenge for Phelps," Davis added. In fact, once the Olympic torch is extinguished, football — both college and pro — will dominate the national conversation.

At the same time, Davis notes, Phelps' accomplishments are so stupendous he will attract a slew of suitors.

"Companies that become sports sponsors, whether of athletes, teams or events, want to associate with greatness," he said. "We love good stories, and Michael Phelps is one of the best, so he is a natural attraction for companies."

All good points – and as Davis told MSNBC the key – Phelps being front and center enjoying and maximizing his new found fame.

"For Phelps to have staying power his agent needs to work overtime to place Michael on the various shows (Letterman, Leno, and so on) while, at the same time, not saturating the market with Phelps," he pointed out. "It is a tough balancing act."

The news – its all good for Michael Phelps, the time is now, the moment is right, time to ride his train bound for glory – sponsorship glory!!

For Sports Business News this is Howard Bloom. Sources cited and used in this Insider Report: CNBC, Forbes, The Baltimore Sun

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