Last Updated Aug 22, 2016 11:21 AM EDT
Editor’s note: Speedo announced Monday morning it was ending its sponsorship of Ryan Lochte as did Ralph Lauren and Airweave mattresses.
As the scandal centered on swimmer Ryan Lochte’s false claims of being robbed at gunpoint in Rio illustrates, matching Olympic champions with Fortune 500 brands can be a crap shoot putting companies in an uncomfortable spot when the relationship comes apart.
Both Ralph Lauren (RL) and Speedo, the swimwear company, announced that they were ending their sponsorship agreements with Lochte. Airweave mattresses founder and CEO Motokuni Takaoka, who previously told Bloomberg News, that Lochte “will remain the U.S. ambassador for Airweave as long as our partnership agreement remains effective” had a change of heart. “After careful consideration, we have made the decision to end our partnership with Ryan Lochte,” a spokeswoman for the Japanese company said in an email.
Even though Lochte has since publicly apologized for what he called his “intoxicated” andcorporate America probably won’t be interested in doing business with him in the future, according to sports marketing experts. The Olympian also faces possible sanctions from U.S. Olympic Committee and USA Swimming.
“Lochte has damaged his brand irreparably, created an international incident and proven how stupid he is,” said sports marketing expert Bob Dorfman, executive creative director at Baker Street Advertising.
“No sponsor wants to attach their name to an athlete like that. What’s more, at 32 his Olympic career was already over after Rio. Would’ve been hard for him to stay top of mind, even if hadn’t instigated LochteGate.”
For the current crop of elite Olympic athletes seeking to cash in on their athletic success, the most challenging race begins after the hoopla from the Rio games dies down. According to sports marketing expert Joe Favorito, about 100 to 150 Olympians are associated with brands, a huge increase from the 15 to 20 with endorsements in the recent past.
“Brands are focused on what the return is compared with what they’re spending,” said Favorito, who also teaches at Columbia University. “Are there going to be opportunities in the millions for some? Maybe. I would say more it’s in the hundreds of thousands or thousands.”
Indeed, Michael Phelps reportedly earned $12 million in endorsement income last year, thanks to deals with Under Armour (UA), Procter & Gamble (PG), Hilton (HLT) and Louis Vuitton among others. The 31-year-old, who has won more Olympic medals than anyone in history, is known to 64 percent of the public, according to Q Scores, which measures how celebrities resonate with the public.
In addition, he has a positive Q Score of 19, indicating the percentage of the general public considering him to be one of their favorite athletes. His money-making potential seems boundless when public appearance fees are considered.
“I would think his deal with Under Armour might be similar to what Nike (NKE) has with Michael Jordan,” Dorfman said. “Does Under Armour come out with a line of Michael Phelps swimwear?’
What about seemingly superhuman sprinter Usain Bolt? According to Q Score, fewer Americans had heard of the Jamaican before the Olympics, finding that just 38 percent knew of Bolt, but 20 percent considered him to be among their favorite athletes.
Forbes Magazine estimates that Bolt, who has captured gold medals in the last three Olympics in both the 100 and 200 meters, earns $32.5 million in winnings and endorsements. And he’s certainly is well known internationally, which makes him attractive to sponsors.
“He seems to have staying power, personality,” Dorfman said.
U.S. multigold-medal gymnast Simone Biles appears to be another Olympic star who’s a good match for Corporate America. Biles, who captured four gold medals in Rio and carried the American flag during the closing ceremony, wasn’t well known to the public before the games. According to Q Scores, she had a 21 level of public awareness, but her Q Score of 30 indicates that the people who know her like her.
Adding to the 19-year-old’s appeal, she has also overcome obstacles in her personal life. He mother was unable to care for Biles and her siblings, who were subsequently taken in by her grandparents, who later adopted them.
Biles also is young enough that she’ll likely compete in another Olympics, which makes her an even more attractive partner for companies looking to hitch on to a star.
U.S. swimmer Katie Ledecky also won four gold medals, is also 19 and likely hasn’t swum in her last Olympic competition. Phelps, however, said he has taken his final Olympic lap in Rio, and Bolt also has indicated that he’s done chasing Olympic glory.
Each of these athletes is racing against the public’s ever-shortening attention span.
“Obviously the challenge for Olympic athletes is that nobody cares about these events for four years,” said Dorfman, “and we move onto the next big thing.”