Sunday, August 24, 2008

With the 2008 Beijing Olympics winding down three of the key marketing/athlete endorsement issues are the selling of Michael Phelps, the endorsement potential of Jamaican sprinter Usain Bolt and the impact ramifications against the Chinese women’s gymnastics team. It would be against the IOC and the Chinese Gymnastics Federation if the investigation proves the Chinese Women’s Gymnastics team used underage athletes and the team is stripped of their gold medals.

Michael Phelps mania shows no sign of subsiding. Friday, Joyce Julius & Associates released another report looking at the value Phelps exposure has meant to Phelps sponsors.

Phelps’ eight-night gold medal run at the Beijing Olympics saw brands associated with the swimmer amass a combined $19 million of in-broadcast exposure value during NBC’s primetime telecasts, and another $5.1 million of exposure value stemming from articles appearing during the same time span in print publications and on the Internet.

According to research conducted by Joyce Julius & Associates, Inc. — which specializes in measuring the impact of sponsorships across all forms of media — Nike, Speedo and Visa logos combined for 12 minutes, 41 seconds (12:41) of on-screen time exclusively from apparel worn by Phelps during NBC’s coverage, beginning Saturday, August 9, and running through his final gold medal triumph on Saturday, August 16. One way Joyce Julius determines exposure value is by comparing the in-broadcast time the brands garner to the estimated cost of a commercial spot during the telecasts.

A warm-up jacket worn by Phelps during each of his medal ceremonies accounted for all of Nike’s time with the swimmer, as the familiar swoosh was monitored for 8:19, leading to an exposure value of $12.5 million.

Speedo logos on Phelps’ warm-up jacket, swim cap and bodysuit and a hat landed the brand 4:19 of airtime and $6.5 million. Meanwhile, Olympic restrictions prevented Phelps from wearing Visa logos; however, NBC’s highlight montages of the swimmer’s career did produce a smattering of in-broadcast exposure for his sponsor.

During the eight days Phelps competed, his sponsors also enjoyed a media surge ranging beyond the event broadcasts. For example, Speedo benefited from press coverage surrounding a performance bounce they established with the swimmer, as text mentions of the brand and Phelps together appeared within nearly 600 print articles and 3,500 stories monitored on the Internet. This coverage alone provided Speedo with an additional $3.5 million of exposure value.
Phelps dominated the first week of the Beijing Games but its clear the marketing star from week two has Usain “Lightening” Bolt. Bolt won gold medals in both the 100M and 200M sprint track and field running events setting a world record in both events. Friday, Bolt was a member of Jamaica’s 4x100 Olympic gold medal rely sprint team. Bolt and the Jamaicans’ set a world record.

The Beijing medal count – Phelps eight gold medals and seven world records. Bolt three gold medals and three world records. Phelps a swimmer, Bolts a sprinter. The major difference Phelps will have limited event exposure during the next quadrennial (the four year period leading to the 2012 London Games) while Bolt will run next week in Germany. It’s a night and day difference when it comes to which athlete will get to showcase his skills on their chosen athletic field.

And for Bolt the differences between being a track and field athlete and Phelps being a swimmer become apparent next week. Phelps will be back in the USA; Bolt will be looking at earning gold bars running in Germany.

The 22-year-old sprinter is to compete at the Weltklasse meet in Zurich next week, where he can collect a kilogram of gold and prize money worth a combined US$93,000 or more than J$6 million if he breaks his 100-meter world record of 9.69 seconds.

Organizers are offering a US$50,000 record bonus on top of US$16,000 for winning a race.
A Swiss bank sponsor has promised the gold bars.

Bolt will then head to Switzerland to run the 200 metres at the September 2 Athletissima meet in Lausanne, where he can net another gold bar worth around US$27,000 if he improves on his newly minted 19.30 seconds mark.

By dominating the Olympic sprint events with devastating ease, Bolt has quickly become the new darling of international meet organizers. Aside from increased bonuses, he can also expect to receive significantly higher appearance fees of up to US$30,000.

The next time Phelps gets to showcase his ability as a swimmer will be at the 2009 World Aquatic Championships next summer in Rome. As far as NBC is concerned – they’ll continue their commitment to being the network that showcases everything that is Michael Phelps.

On the heels of the most memorable Olympic swimming competition in history, in which Michael Phelps won an unprecedented eight gold medals, NBC Sports, in cooperation with USA Swimming, today announced an agreement for the most significant U.S. television package in the history of the sport. NBC Sports and Universal Sports will broadcast the 2009 World Swimming Championships from Rome and the 2009 USA Swimming National Championships (which will serve to qualify the U.S. team for the 2009 Worlds), as well as the National Championships in 2010 and 2011. The agreement is the first major announcement for the sport of swimming since the remarkable Beijing Olympic swimming competition that saw 20 new world records in the 32 morning finals. NBC already holds the broadcast rights to the 2012 U.S. Olympics Swimming Trials and 2012 London Olympic Games. The announcement was made today by Dick Ebersol, Chairman, NBC Universal Sports & Olympics and Chuck Wielgus, Executive Director, USA Swimming.

Michael Phelps, who has long stated a goal of getting more exposure for the sport of swimming, said: "I've said for a long time that my most important goal was to leave swimming better than I found it and this move to network coverage on NBC of our major championships is a dream come true and a big step in that direction."

Phelps has stated his intention to continue with competitive swimming through the 2012 London Olympics. When asked about swimming at the 2009 World Championships, he said, "My mom has told me that I better make the [2009 U.S. World Championships team], because she wants to go to Rome. I have the pressure from the mom, so I guess we have to get back into it and make that happen."

NBC Dick Ebersol, Chairman, NBC Universal Sports & Olympics said: "The whole world watched as Michael Phelps took his sport to a new level and introduced a generation of fans to swimming through his extraordinary achievements. His accomplishments transcend sports and, are in fact, a cultural phenomenon. We're greatly looking forward to following the next chapter in his career."

Chuck Wielgus, Executive Director, USA Swimming Added: "We're thrilled with our evolving partnership with NBC. Having NBC broadcast the 2009 FINA World Championships is a huge step forward for our sport."

NBC will broadcast weekend coverage from Rome on July 26 and Aug. 1-2, 2009 and will also air mid-week coverage on the newly-launched Universal Sports digital channel.

Led by its live primetime swimming coverage, NBC averaged 30.0 million average viewers, 13 percent ahead of Athens in 2004, through the first eight days of the Beijing Games as Michael Phelps' quest for eight gold medals captivated America. Phelps' achievements transcend his sport, inspiring his hometown Baltimore Ravens to broadcast his record-breaking race in Ravens Stadium following their preseason game, and attracting members of the U.S. Olympic basketball team to his races in the Water Cube on the Olympic Green in Beijing.

As for Bolt – The Manchester Guardian reported that Bolt, is starting to reap the commercial benefits of his Beijing triumph, with an approach from UK cable company Virgin Media to be the face of its superfast broadband service.

Virgin Media, which is set to launch a 50Mb broadband product it claims will be more than twice as fast as rivals, is considering calling the product "Boltband".

Ashley Stockwell, the head of Virgin Media's marketing operation, said the company had approached Bolt to become the face of its new high-speed web service.

"Our new 50Mb service will deliver even faster lightning broadband speeds, which is why we feel that Usain will be the perfect ambassador for our campaign," Stockwell added.

Earlier this week The (Portland) Oregonian reported that: Bolt, Chinese diver Guo Jing Jing, American gymnast Shawn Johnson and 16-year-old Aussie swimmer Cate Campbell have made the largest leap in good media buzz over the past week of the Olympic Games, according to one media tracking and analysis firm.

The firm also finds Nike benefited from its "ambush" marketing strategy, though less so as the Games have progressed.

Austin, Tex.-based Global Language Monitor uses proprietary software to measure how certain names appear on websites and print media in relation to other words over time. For the Olympics, it has measured both brand names and athlete names. It attempts to assign a qualitative measure, too, based on whether the name appears in major media or not, company president Paul JJ Payack said.

Throughout the games, Michael Phelps has ranked the No. 1 athlete. But as of Aug.18, the new No. 2 is Lin Miaoke, the Chinese girl who lip-synced during the Opening Ceremonies. She displaced Chinese basketball star Yao Ming, now No. 3.

Since GLM's last measurement, taken the third week of July, 100-meter gold medalist Bolt has jumped five spots to No. 4 on GLM's chart. That was before Bolt won today's 200-meter race.
The 41-year-old U.S. swimmer Dara Torres moved up three spots to No. 5. Multiple medalist Johnson jumped six spots to No. 9 and Campbell 11 spots to No. 12.

Those rankings have to please Speedo (which sponsors Phelps), Reebok (Ming), Puma (Bolt), Li Ning (Guo) and adidas (Johnson).

Athletes whose buzz has declined dramatically include Chinese hurdler Liu Xiang (Nike), U.S. sprinter Tyson Gay (adidas), British marathoner Paula Radcliffe (Nike), Aussie swimmer Grant Hackett (Speedo) and Sanya Richards (Nike) and U.S. Jeremy Wariner (adidas), both 400-meter athletes from the U.S. Wariner has not raced in his final.

In its brand rankings on Aug. 13, Nike ranked No. 5, above official Olympic sponsors Samsung, Panasonic and Coca-Cola (Nike's fellow Wieden+Kennedy client). Nike is not an official Olympics sponsor but instead advertises through athletes and commercials, events and signs surrounding the Games.

Since then, Nike has slipped to No. 9. That's still "impressive," Payack said, considering it didn't spend the reported $80 million that adidas did to be an official outfitter of the Games. Lenovo is the surprise No. 1, he said.

As hot as Bolt has been on the track and potentially down the road in the corporate marketplace one place that has been less than appreciative of Bolt’s efforts are in the offices of International Olympic Committee President Jacques Rogge. Bolt brought an infectious spirit to Beijing’s Olympic Track events. He smiled, danced – in short he loved and lived every moment he raced (and won) at the Beijing Games. Bolt’s ‘spirit in the night’ didn’t impress Rogge after Bolt won the men’s 100M earlier in the week

Rogge called on the young sprinter to treat his opponents with more respect and not to go over the top with his celebrations.

"I have no problem with him doing a show," Rogge said in an interview with international news agency reporters.

"I think he should show more respect for his competitors and shake hands, give a tap on the shoulder to the other ones immediately after the finish and not make gestures like the one he made in the 100 metres."

While Rogge was ‘critical’ of Bolt he offered little on the ‘controversy’ surrounding Michael Phelps win by a 100th of a second in last Saturday’s 100M men’s butterfly. Earlier this week The New York Times Jere Longman reported that before Phelps left Beijing Wednesday he visited the Omega Pavilion in Beijing. Omega one of the IOC’s TOP (12 major world-wide sponsors) and one of Phelps major sponsors did their Beijing corporate entertaining at their Omega Pavilion in Beijing.

Omega as Longman pointed out is not only the official timekeeper of the Beijing Games. It is also one of Phelps's corporate sponsors, an arrangement that appears to be a conflict of interest.
The most visible athlete at these Games (in question if you look at the impact Bolt has had had in week two) is getting a paycheck from the same company whose equipment decides the outcome of Phelps's events.

Most of the time, such a relationship probably would not draw much attention or concern. The Olympic timing system is a seemingly fail-safe, objective determination of the order of finish. Unlike figure skating and gymnastics, there are no subjective votes made by judges in swimming.

But Phelps as Longman pointed out was involved in a disputed race last Saturday, and Omega has declined to release underwater video images showing conclusively that Phelps won the 100-meter butterfly by a hundredth of a second over Milorad Cavic of Serbia.

Whether it has anything to hide or not, Omega is needlessly leaving its own reputation — and Phelps's — vulnerable to suspicion, sports ethicists and historians said.

"Here we are in the situation in which the finish is questionable and the ultimate judge of truth is refusing to make public information that 'may' be nothing short of catastrophic for Phelps,
Omega, Phelps's other sponsors and the Americans in general, who certainly do not want their wonder boy's amazing feat tarnished," David Malloy, a sports ethicist at the University of Regina in Saskatchewan, said in an e-mail message.

He added: "This issue may end up being very damaging to Phelps, Omega and the USA Sadly, it could have been avoided with careful thought and basic ethical advice."

Shortly after Saturday's disputed race, Alina Ivanescu, a spokeswoman for Omega, told The New York Times that the company would soon forward the video images to the news media. Later Saturday, though, Ivanescu sent an e-mail message, saying that swimming's world governing body, known as FINA, decided not to release any timekeeping images to the news media.

"It is not up to us to decide," Ivanescu said Wednesday. "It's our job to provide the results. FINA decides what can be published or not. FINA said it was a no go."

Omega, which has timed Olympic events since 1932, uses four digital cameras as a backup to its electronic timing system. Images from track events have routinely been released by Omega.
Christophe Berthaud, Omega's Olympic manager, said that there was no human intervention in the determining of race results and that there was "absolutely no doubt" that Phelps won.

"Omega provides the most accurate and reliable measurement system in the world," Berthaud said in an e-mail message. "The professionalism and independence of its teams are recognized by the highest authorities of sport."

Cornel Marculescu, executive director of FINA, could not be reached Wednesday. On Sunday, he told The New York Times that it was FINA's policy not to release race images. He also noted that Serbian officials had seen the images and had withdrawn their protest of the butterfly race, satisfied that Phelps had indeed won.

"We are not going to distribute footage," Marculescu said. "Everything is good. What are you going to do with the footage? See what the Serbians already saw? It is clarified for us beyond any doubt."

The International Olympic Committee said Wednesday it would not press FINA or Omega to release the images.

"The result of the race as declared by the federation is final and the IOC has no reason to question it," said Giselle Davies, a spokeswoman for the IOC

Phelps was not made available for an interview. His agent, Peter Carlisle of Octagon, said he had no plans to ask for the release of the images. "That sort of stuff is an issue that FINA deals with," he said. "We don't get involved with what happens in the pool like that."

Carlisle said he did not see a conflict in Phelps's arrangement with Omega. "I don't see how the company decides the outcome of a race," he added in the New York Times report.

One issue is clear – both Phelps and Bolt have emerged from the Beijing Games as marketing machines something most of their fellow Olympians won’t get to enjoy.

"Only a very few will make it. They will do so by being great in the next few years, working in the media," said Peter Walshe, global brands director at marketing researcher Millward Brown in a Reuters report.

"These athletes need to have an additional hook, a story, pursuit, or career that transcends their Olympic glory," said David Clarke, from the USC's Sports Business Institute.

"The Olympics may well be a door opener to the future but success relies on offering something distinctive ... Just being an Olympian is no guarantee," said Walshe.

Both Phelps and Bolt have that hook. They’re both young. They’ll both compete at the 2012 London Games. They both love the camera and the camera clearly loves them. Phelps has the advantage of being an American, the first athlete to win eight gold medals in a single Olympic Games and has won more career gold medals than any other Olympian.

Athletically Bolt competes more often, as a sprinter he has a higher athletic profile but being from Jamaica isn’t an advantage. Ask Donovan Bailey who won both the men’s 100M and was part of Canada’s gold medal winning men’s 4x100 relay team how he feels 12 years after Michael Johnson won the men’s 200M and 400M at the 1996 Atlanta Games. Johnson the American earned tens of millions of dollars more than Bailey did after both men won gold in Olympic sprint events.

Bolt has to accept that American companies are going to invest in American athletes. Both athletes will earn tens of millions of dollars (if not hundreds of millions of dollars) from their Beijing success but the bigger winner will be Phelps – that’s the bottom line.

For Sports Business News this is Howard Bloom. Sources cited and used in this Insider Report: Reuters, The New York Times, The Manchester Guardian and The Oregonian

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