The Olympics are just beginning, but there's more than Olympic gold at stake...
It's the battle for the bucks, otherwise known as endorsements. Athletes who return home with a medal - preferably gold, but any kind will do - can expect to be approached by companies wanting to use their names and images to market products. Olympians who compete out of a love for the sport and who crave only a spot on the podium can make upwards of seven figures from endorsement deals. After the 2002 Winter Olympics in Salt Lake City, American figure skater Sarah Hughes, the surprise gold-medal winner, skated away with endorsement offers in the millions of dollars. Teammate Michelle Kwan had already lined up major deals with Coca-Cola, Visa and East West Bank before competing in the 2006 Olympics in Torino. Her image was on promotions for multiple Coke brands (14 in total), including Minute Maid and Dasani.
Canadian athletes
To appreciate the significance of a gold-medal win and its potential financial impact, consider this: Canadian athletes receive $1,500 a month from Sport Canada and some need to maintain their “day jobs” while training for the Olympics. According to the the book Heat Stroke by Michael Simonson, 80% of Canada’s amateur athletes live below the poverty line. A silver or gold win at the Olympics would dramatically increase an athlete’s marketability.
A number of factors determine an athlete's earning potential. The colour of the medal is the most important and the more medals an athlete wins, the more money he or she can expect from endorsement deals. Popularity of the sport and how young the athlete is doesn’t hurt. At the 2004 Summer Olympics in Athens, Canada had three gold medal winners. Two of these were 23 years of age, gymnast Kyle Shewfelt and kayaker Adam van Koeverden, both of whom signed with IMG. IMG is a leading global talent agency and marketing firm, with clients like current sport greats golfer Tiger Woods, basketball player Vince Carter and hockey player Sidney Crosby. The winner of Canada’s third gold medal in Athens, 38 year old cyclist Lori-Ann Muenzer failed to get sponsorship or representation. Muenzer announced in the fall of 2005 that she needed to take a year off of competitive cycling due to issues with funding - indicating that she just doesn't have enough money to cover the associated costs.
The biggest story of the 2002 Winter Olympics in Salt Lake City was the controversy surrounding the gold medal won by Canadian pairs skaters Jamie Salé and David Pelletier. The couple, despite an emotionally compelling and technically flawless routine, was not awarded the gold medal, causing much protest and a media storm. A quick investigation discovered that a French judge was pressured to vote in favour of the other competitors. International Olympic Committee president Jacques Rogge intervened and declared Salé and Pelletier co-champions and also awarded them gold. Critics of the couple’s agent (the agent was later fired) cited that the duo missed out on major medal-marketing opportunities and other events to take full advantage of skaters’ buzz. However Salé and Pelletier did manage to line up endorsements from Crest white strips, Roots, Rogers' AT&T and the Driving Force. In 2005, the couple partnered up with CCM to release a line of endorsed skates.
Snowboarders: young, hip and sponsored
The controversial circumstances surrounding a medal win have very little impact on endorsement opportunities. At the 1998 Nagano Winter Olympics, Canadian snow boarder Ross Rebagliati had his gold medal temporarily taken away when traces of marijuana were detected in his urine. The media attention he received made him into a world-wide celebrity and caused some companies to say he would be an excellent spokesman for their product even if he didn't regain the medal (which he did). Rebagliati became an especially appealing hero because he came across in the media as very charming and contrite, insisting that the marijuana in his urine test came from second-hand smoke.
More than half of all snow boarders are between the ages of 12 and 24, and 80 percent of them are single - hence the sport's hip, rebellious image. This image, in addition to the success of the US snowboarding team at the 2002 Salt Lake City Olympics, snowboarders are quickly accumulating top sponsorship dollars. Elite snowboarders can earn anywhere from $300,000 to $1 million a year; as much as 90 percent of that may come from endorsements. Many have signed major endorsements, embarked on big-screen film projects, and some have even launched their own clothing and equipment lines. Many of the US elite snowboarders have left the national snowboard team (where endorsements are limited) to form their own teams as a way to take full advantage of the lucrative sponsorship opportunities.
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Questions
- What traits make an athlete "highly marketable"?
- What sort of image does an athlete bring to products? Give examples.
- How does sponsoring Olympic athletes or teams enhance a company's image? Give examples.
- How might the controversy surrounding Jamie Salé and David Pelletier or Ross Rebagliati increase marketability? Identify products for which he would be an effective spokespeople. List the reasons why you chose these particular products.
- Do endorsement contracts compromise the integrity of amateur athletes?
- Of the Canadian athletes who will be competing games, who do you think will be the biggest "winner" in terms of endorsements? Why?
Activity #1
Assume the role of an advertising executive; list the products you would pair with the following athletes. List the traits you would capitalize on in your ads. The following is a list of 2010 Olympic hopefuls which have been profiled by the Canadian Olympic Committee.
Activity #2
Tally the endorsements of medal-winning athletes after the Olympics. (It might also be interesting to compare the amounts of money earned by American athletes, versus that of Canadian athletes.) Pay attention to:
- the products being endorsed
- the tone and message of each ad
- the amount of money received by each athlete from endorsements
At the end of of the monitoring period, declare which athlete is the "winner". As a class, discuss what makes an athlete a winner in the eyes of fans and marketers. Discuss the nature of this triangular (fans, athletes and marketers) relationship. Who do you think benefits the most?
