Beijing Olympics: Endorsement Payoffs

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Winning a gold medal at this year’s Beijing Summer Olympics may bring more than just bragging rights, fans, glitz and fame. Olympians are also winning huge endorsement deals from companies that want to share in their glories and "celebrandity". Top tier Olympians like 14 time gold medalist Michael Phelps, basketball-superstars Yao Ming & Kobe Bryant, Chinese hurdler-Liu Xiang, and gold gymnasts Nastia Liukin and Shawn Johnson are amongst the lists of iconic athletes already receiving endorsement deals.

Endorsement Value - Athlete Payday
What does the value of a medal provide Olympian athletes when no longer in the races for gold? Speedo paid Phelps a $1 million bonus for passing U.S. swimmer Mark Spitz’s 1972 record of 7 gold medals at one Olympics. Additionally, contracts with sponsored companies before the Beijing Olympics earned Phelps an estimated $5 million per year. You can bet that this payoff will only grow after topping world records in swimming.

According to a Wall Street Journal report, Phelps’ agent Peter Carisle said he expects endorsements to accumulate to $100 million over the life span of his sponsorship deals, a sum comparable to Tiger Woods' payoff of $122 million for 2007 alone. For Phelps, who just signed to be on Kellogg's Frosted Flakes, things are GRRRRREAT!

Athletes like Houston Rockets’ basketball player, Yao Ming is also earning the big bucks from his sponsorship partners. Per Newsweek, Yao Ming’s “celebrandity” awards him with a total of $150 million from his multiple sponsors. Liu Xiang placed second place in corporate income to Yao Ming, as China’s most saleable Olympic hero, receiving more than $10 million from corporate endorsements despite his injury and current withdrawal from the Beijing Olympics.

Who Pays?
Companies with the most individual athlete endorsements include Coca Cola, Visa , and McDonalds. Other marketing deals come from less known companies, including Michael Phelps’ smaller corporate sponsors: Rosetta Stone, a language learning software, nutrition PowerBar, and new performance sports drink PureSport which also endorses Olympic gymnast Nastia Liukin.

Companies are hopeful that brand affiliation with these world champions will convert into revenue. The table below tracks the key endorsements and stock performance of some of these sponsors. Since the start of the Olympics, Apple has seen the highest return on its stock, up 2.35%, followed by Visa. On a month to date basis, Michael Phelp’s loyal partner Warnanco Group, the parent company of Speedo is leading the way, as share value have jumped about 18.5%. (Too see how much these global marketers spent to be Worldwide sponsors of Beijing Olympics click here.)