SBJ/20081027/This Week's News
Economy puts Olympic endorsements on hold
Published October 27, 2008
Olympic athletes and agents looking to cash in on the Beijing Games have run into a great wall in the faltering economy.
Four of the biggest Olympic agents say the economic slowdown has meant fewer companies are willing to sign new endorsements, and those companies that have signed new deals are unwilling to announce them in the current economic climate.
“The landscape’s different from what we all expected,” said Janey Miller, an Octagon agent who represents swimmer Natalie Coughlin. “A lot of people are on hold, waiting to see what’s going to happen.”
“It’s surprising to me because of how much bigger the Beijing Games were,” said Evan Morgenstein, president of Premier Sports Group, which represents gymnast NastiaLiukin and swimmer Dara Torres. “You can’t get any traction in this economy.”
Since the Beijing Games, no significant, new endorsements have been announced.
Considering the ratings and interest that the Beijing Games generated domestically, that has surprised Olympic agents. By this point following the Athens Games in 2004, sprinter Lauryn Williams had announced a deal with Nike, gymnast Paul Hamm with Marigold Foods, cyclist Tyler Hamilton with Compex Sport muscle stimulator.
“Normally, you’d get more play in the months after the Games,” said Peter Carlisle, head of Octagon’s Olympic and action sports division and Michael Phelps’ agent. “That’s what’s been affected by the economy.”
Sheryl Shade, who represents gymnast Shawn Johnson, said many companies are talking to her about Johnson, but most are saying that they’re not going to do anything until the first quarter of 2009.
The perfect example of the type of challenges agents and athletes are facing, Morgenstein said, occurred when he recently asked Torres to open her cupboard and start reading items off the shelves.
“Everything she read was Kraft,” Morgenstein said. “Macaroni and cheese, graham crackers — she’s got a kid, so everything was Kraft.”
Typically, he would follow up on that by pitching Kraft on endorsing Torres, but the company recently announced a series of layoffs, so he shelved the pitch.
“With the environment out there, you have to sit back and wait a bit,” Morgenstein said.
The apparel category, which is usually ripe for endorsements after an Olympics, is especially soft right now, agents say. Consumer spending dropped in September and many retailers are reporting a decline in sales. That, coupled with Nike’s exit from the swimsuit category and swimwear maker Tyr’s decision not to sign new athletes, has made things tough for swimmers, in particular.
“There’s no one out there who’s so big that they can change this retail climate,” Morgenstein said.
For the most part, agents say the most visible stars of the Games haven’t been affected. Endorsement opportunities continue to avail themselves for Torres, Phelps, Liukin and Johnson.
Agents representing each athlete said they have new deals, but the companies aren’t willing to announce the agreements in the current economy.
“You used to get an announcement immediately after (the Games) when the athletes were most visible,” Shade said. “But we had a big retailer who said, ‘We don’t want to gloat in this economy. Let’s wait until next year.’ It’s just slower.”
Endorsements aren’t the only thing that’s suffering. Appearances for less-visible athletes have all but dried up as well.
While Morgenstein said he’s had no problem securing speaking engagements for swimmer Jason Lezak, who anchored the gold-medal-winning 400-meter freestyle relay, other athletes, such as breaststroker Brendan Hansen and backstroker Aaron Peirsol, are receiving 30 to 50 percent fewer appearance opportunities than expected.
“That’s where the economy is hurting,” Morgenstein said. “Those passive opportunities were the first dropped.”
To keep his athletes visible and relevant for sponsors, Morgenstein has tried to create events for them. Peirsol will host an open water swim in Fort Myers, Fla., in early November called the “Race for the Oceans” that will benefit Oceana, an ocean conservation organization he supports.
While agents acknowledge that appearances and endorsements have been harder to come by after Beijing, they expect more deals to be announced in coming months. Following Athens, Phelps didn’t announce his first post-Games deal until March 2005 when a seven-figure endorsement deal with MP3 maker Matsunichi was revealed.
“It’s not that interest isn’t there,” Carlisle said. “It’s just slower to develop. You’ll see more announcements soon.”