Bloomberg News

Retton Legacy Leads U.S. Gymnasts From Medals to Riches

July 18, 2012

Gabrielle Douglas had won the U.S. gymnastics trials 12 hours earlier and was getting her first taste of the riches and responsibilities that come with one of the most public of Olympic berths.

Along with the flowers and special leotards reserved for the five members of the American women’s team, the 16-year-old Douglas was assured of a six-figure salary after the London Games and had already signed a sponsorship deal with Procter & Gamble Co. (PG:US)

Douglas is the latest in a line of tumbling teenagers who turn into America’s sweethearts every four years. She and her teammates will be a focus of prime-time Olympic coverage on Comcast Corp. (CMCSA:US)’s NBC, which paid $1.18 billion for the U.S. television rights to the games. The gymnasts will share the stage with older millionaires such as swimming’s Michael Phelps and basketball’s LeBron James, both 27.

“There’s a smile, there’s a look, every girl wants to be Mary Lou Retton and every parent wants to have a kid like that,” said Peter Shankman, founder of the Geek Factory marketing firm in New York. “On a marketing level, it’s a sense of innocence that we’ve seemed to lose in professional sports.”

On a July morning in San Jose, California, Douglas cradled her new iPhone while explaining that her Twitter followers had doubled overnight -- to more than 17,000 from about 8,000. Though she had gotten one hour of sleep, her smile never faded.

Her mother, Natalie Hawkins from Virginia Beach, Virginia, also was all smiles -- and said she felt a huge sense of relief and satisfaction after spending more than $150,000 on Gabby’s training and travel.

Guaranteed Income

Whether or not they succeed at the Olympics, Douglas and her teammates will make a base salary of more than $100,000 each for participating in the 40-city Kellogg’s Tour of Gymnastics Champions that begins Sept. 8 in San Jose, California, and ends Nov. 18 in Brooklyn, New York.

Joining Douglas on the Olympic team are McKayla Maroney, Aly Raisman, Kyla Ross and reigning all-around world champion Jordyn Wieber. The five members of the men’s team also will be on the Kellogg’s tour after the London Games.

If they win team or individual medals at the London Games that begin July 27, the Olympians could earn as much as $500,000 each on the tour, according to Steve Penny, president of USA Gymnastics. For a U.S. gymnast such as 2008 Olympic all-around champion Nastia Liukin, personal endorsements can push that figure well over $1 million, Penny said.

Metal Detector

Liukin, 22, won five Olympic medals in 2008, which got her stopped at a Beijing airport metal detector when she forgot to take them out of her purse. She came home to a hero’s welcome, the Kellogg’s tour and endorsements with products ranging from Subway sandwiches to P&G’s Cover Girl makeup.

The Russian emigre, the daughter of two former Soviet gymnastics champions, has been in the gym since she was a toddler.

“I never thought in a million years that something I loved would give me this incredible career,” Liukin said in a telephone interview. “There’s no amount of money, no number of sponsorships that can make you train for seven hours a day, seven days a week, but it’s definitely a nice reward for all the time you put into it.”

Evan Morgenstein, Liukin’s agent and president of Cary, North Carolina-based Premier Management Group, said some of her sponsorships were signed before the Olympics and more came later. Some were guaranteed, while others offered bonuses for gold medals. He didn’t provide details on the contracts.

Extended Deals

The key to financial success for Olympic athletes is extending deals beyond their window of fame, Morgenstein said. Liukin joined with Warner Bros. on a line of Supergirl by Nastia clothing sold exclusively by JCPenney Co. (JCP:US)

Retton turned a gold medal into national fame by becoming the first American woman to win the all-around Olympic title at the 1984 Los Angeles Games and the first woman featured on a Wheaties cereal box. She said this year’s gymnasts should be themselves and get good managers.

“I would tell them to deal with the sponsors as the people they are,” Retton, 44, said in an e-mail. “These girls are grounded and they are like I was. I didn’t seek fame or riches, just success. If they approach business after the games in this manner, things will work out just fine.”

Kerri Strug overcame a sprained ankle to help the U.S. women’s team win at the 1996 Atlanta Olympics. Carly Patterson won the all-around gold in 2004, and Liukin beat U.S. teammate Shawn Johnson for the all-around in 2008.

“They become rock stars overnight,” Penny said in an interview at the gymnastics trials in San Jose. “Our athletes become the equivalent of American idols.”

Athlete’s Transition

Johnson, 20, retired in June because of a left knee injury. She’ll work for P&G at the Olympics, the continuation of a relationship she nurtured while winning four medals in Beijing.

“The transition from the Olympics into the marketing world is nothing that you can really prepare yourself for,” Johnson said in an interview at the trials. “The older I get, the more it becomes a career and a job. And it becomes something that ultimately will give me a future I want and that I worked for.”

NBC plans to show all of the women’s gymnastics at the London Games in primetime, including the team finals on July 31.

At the 2008 Olympics, the night that featured the women’s all-around gymnastics final drew 29.7 million viewers -- about 2 million more than the average primetime audience throughout the games, said Adam Freifeld, a spokesman for NBC Sports Group. It was the fourth-most watched night of competition in Beijing, trailing only nights that featured Phelps, who won a record eight gold medals.

‘Hugely Popular’

“It’s a hugely popular event, it’s going to generate a lot of programming for us in primetime,” Mark Lazarus, chairman of NBC Sports Group, said in a June 27 conference call. “The drama of that event is very important to us.”

NBC Universal will offer live online coverage of every Olympic event for the first time this year, though only pay-TV subscribers will be able to access most of the 3,500 hours of coverage at NBCOlympics.com.

Hawkins, a senior collections specialist for HSBC Holdings Plc (HSBA), was on disability when she took a two-year leave of absence because of her youngest daughter’s gymnastics obligations. Gabby’s victory at the Olympic trials was the culmination of years of financial sacrifice for the family, the mother said.

“I have allowed myself to officially say, when I saw her on that floor crying, that all the hard work and sacrifice paid off,” Hawkins said. “To send my daughter away and spend all that money.”

To contact the reporter on this story: Rob Gloster in San Francisco at rgloster@bloomberg.net

To contact the editor responsible for this story: Michael Sillup at msillup@bloomberg.net


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