The Business of Sports

Olympic Athletes Going for Real Gold


1. Winter Olympics: The Athletes' Endorsement Games

Every time it broadcasts the Olympic Games, NBC spends a significant chunk of its telecast hours airing heartstring-tugging profiles of Olympic athletes with poignant stories. While most of those soppy vignettes make us want to lunge for our remotes and hurl them at Dick Ebersol, the athletes' business maneuverings are usually pretty interesting.

After an initial bronze, skier Bode Miller appears to be back in top form on the slopes. But will he be back with his sponsors? As CNBC notes, after his disastrous turn in Turin, Miller lost about $3 million in annual sponsorship agreements, including a nourishing deal with pasta maker Barilla. Current deals include financial concern Superfund and Head (HEAD.AV); Sports Illustrated reports Miller was spotted having dinner with Nike (NKE) reps before his bronze medal performance.

Carlsbad, California snowboarder Shaun White, on the other hand, earned $9 million in 2008 from an avalanche of sponsors, including AT&T (T), Oakley, Red Bull, and Burton. A countercultural icon who also has strong mass-market appeal, White has a clothing line with Target (TGT) and signature video games in his name. Although he lost key deals with American Express (AXP) and Hewlett-Packard (HPQ) as a result of the economy, the $7.5 million in endorsement deals White earned in 2009 still makes him one of the highest-earning athletes in Vancouver. Comparatively, the red-headed snowboarder earned more in off-field revenue than all pro baseball and football players save Peyton Manning, according to the Los Angeles Times.

What of Stephen (Comedy Central) Colbert's beloved speed skaters? Front and center, on NBC and elsewhere, is Apolo Anton Ohno. After winning ABC's Dancing with the Stars, Ohno is a celebrity in his own right and a de facto ambassador for the Games. Conversely, speed skater Shani Davis is largely viewed as cold as the ice he skates on, and he has publicly shunned most promotional opportunities—and Colbert.

Pinup Brigade

On the women's side, NBC and Vancouver brass are probably exhaling their collective breath as Sports Illustrated cover girl Lindsey Vonn has finally fulfilled her ample promise and medaled at these Games. Well-known all over the world, downhill racer Vonn has been compared with Michael Phelps in her promotional and endorsement potential, with close to a dozen endorsement deals under her belt—and that was before her much-discussed spread in SI's annual swimsuit issue.

But that's not the bottom line. Fellow pinup girl, snowboarder Hannah Teter, used the swimsuit issue to launch a panty line under her own design, with much of the proceeds going to charity. Teter is donating $5 from every pair of $15 "Sweet Cheeks" panties purchased to Doctors Without Borders and plans to "unveil a new design each month for at least the rest of this calendar year, with every pair targeting a different charitable cause," according to her brother, Octagon agent Amen Teter, who added that the goal is to raise $100,000 by spring.

With hockey and snowboarding just kicking off and with the Games populated by such characters as a black slalom racer from Ghana nicknamed the "Snow Leopard" and an Alpine skier from the Cayman Islands, we'll no doubt see many more juicy marketing stories emerging from Vancouver. More potential marketing windfalls to keep an eye on: Almost 40% of participating athletes in this year's Olympics are women (beauty, fashion, and home-care product manufacturers take notice), and 23 total U.S. team members are parents—six moms and 17 dads, including, improbably enough, Bode Miller. Could a Playskool deal be in the Turin troublemaker's near future?

2. Winter Olympics: Drips, Scabs, and Clicks

While the balmy, spring-like weather in California is much appreciated this week, it's not appreciated in Vancouver, where Olympics organizers are catching heat from fans as well as from Mother Nature.

Due to the rain and slush on Cypress Mountain that have rendered the area unsafe for hordes of spectators, the Vancouver Olympic Committee has been forced to cancel 20,000 standing-room tickets for all events held at that venue, including the men's and women's snowboard cross events scheduled for early in the week, the halfpipe, and the snowboard parallel giant slalom. The affordable standing-room tickets, which sell for C$50 (approximately US$48.86) each, were almost completely sold out by ticket brokers more than a year ago. While all ticket holders will receive full refunds, the events' popularity with younger fans is sure to spark more spirited debate than would, say, not allowing fans to watch curling in person.

Possibly even worse for Vancouver organizers: On Whistler Mountain, women's downhill training runs and the men's super combined skiing competition have been postponed due to snow conditions.

As Vanoc begins issuing the $1 million in ticket refunds, perhaps the committee can take (very) small comfort in the increase in TV ratings that the removal of spectators will bring. NBC is anticipating record viewer numbers for the full 17-day run of the Games, estimating that 185 million unique viewers will tune in. And if the first few days of competition are an indication, the network won't walk away disappointed (notwithstanding, of course, the more than $250 million NBC claims it will lose on its investment).

Financial Barometer

According to numbers released by the network through three nights of coverage, NBC is averaging a 15.3 rating and 28.6 million viewers, up 15.9% and 24.9%, respectively, from a 13.2 rating and 22.9 million viewers during the same period of the Winter Olympics in Turin. Last Friday night's opening ceremony drew 32.6 million viewers, up 35% from Turin but down 32.2% from Salt Lake City in 2002.

NBC is also using the Vancouver Olympics as an opportunity to measure new media consumption and trends, focusing on clicks on NBCOlympics.com, social networking sites, and the number of video clips downloaded to iPhones and BlackBerrys.

While paying sponsors have to be happy with the numbers NBC is putting up so far, ambush marketing remains an issue, particularly in Vancouver itself. Among so-called ambush companies in Olympic organizers' crosshairs are Subway, which is running a commercial featuring Michael Phelps swimming across land toward Vancouver (much to Olympic sponsor McDonald's (MCD) chagrin), and Ocean Spray, which is providing SkyTrain riders with free Cranberry Cocktails and which filled an Olympic rings-shaped floating display in the city of Richmond, where the speed skating events take place, with 30,000 pounds of cranberries.

3. Reporting for Duty: Pitchers, Catchers Head for Florida and Arizona

Snowzilla hasn't quite retreated yet, and here it's time for baseball's best to pack up and head to their respective warm-weather winter enclaves. Throughout the week, pitchers of grapefruit and cactus catchers will be reporting to camps in Florida and Arizona.

Baseball has experienced its quietest off-season in years in 2010, with few major trades, no new performance-enhancing drug scandals, and the NFL and the NBA taking all of the current labor heat. While attendance was down at virtually all MLB parks in 2009, the improving economy and adjustments by teams—including flat or lower ticket and concession prices for fans—should help ease the league onto the road to economic recovery this year. MLB is also looking forward to the opening of the Twins' new Target Field in Minneapolis in April, and in Miami, construction is well underway on a new ballpark for the Florida Marlins.

But first, spring training.

In Florida, the Rays and mining giant Mosaic (MOS) continue to battle with Charlotte County commissioners over that company's plans to attach its name to Charlotte Sports Park, the Rays' public training facility. Last year, the Rays relocated their spring training operations from St. Petersburg to Port Charlotte, after the sports park underwent a $27 million renovation. The contract the Rays signed with the county "allows the team to sell the naming rights to the stadium, though the county can veto the deal, as long as the veto is not 'unreasonable,'" according to the St. Petersburg Times. The county would receive $75,000 a year for 15 years, with about a 3% increase per year. The county has been fighting the mining concern over regional operations for a handful of years; commissioners claim they've spent about $12 million in legal fees and call the proposed naming rights deal "a slap in the face."

While MLB teams are now evenly distributed between Florida and Arizona, with 15 teams conducting spring training in each state, only four teams remain on Florida's East Coast, making, as the New York Times points out, for some long bus rides. (The four remaining teams there are the Cardinals, the Marlins, the Mets, and the Nationals.)

Who are the most powerful athletes on and off the field? Click here to see the 2010 Bloomberg BusinessWeek Power 100.

Rick_horrow
Rick Horrow is a leading expert in the business of sports. As chief executive officer of Horrow Sports Ventures, he has been the architect of 103 deals worth more than $13 billion in sports and urban infrastructure projects. He is also the sports business analyst for CNN, Fox Sports, and the Fox Business Channel. Karla Swatek is vice-president of Horrow Sports Ventures and co-author of Beyond the Box Score: An Insider's Guide to the $750 Billion Business of Sports (2010). Horrow is also the host of Sportfolio, a new program on Bloomberg TV that airs Wednesday nights at 9 pm ET.

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