This Could Be The Most Expensive Mistake in Sports Sponsorship

This article caught our attention. Michael Phelps, the most decorated Olympian is in the cover page of Sports Illustrated magazine, and not in the Under Armour’s attire! We are not sure on the actual story behind this. Whatever it is, this could be the most expensive mistake (or mishaps) for Under Armour sports sponsorship program. We do have some point that everyone, especially the athletes need to ponder. Read on

expensive mistake in sports sponsorship

Michael Phelps, the crown jewel of Under Armour’s Olympic athletes, is wearing Nike sweatpants, swoosh and all, on the cover of the latest Sports Illustrated magazine.

In the world of sports marketing, this constitutes a colossal screw-up. Superstar athletes—and their agents, managers, and marketing teams—are hyper-aware of what brands they wear, because they earn so much money from endorsements.

UA

That Phelps, an Under Armour athlete since 2010, would put a competitor’s logo front-and-center on the cover of a national magazine that reaches more than 18 million people has insiders shaking their heads.

“This will go on the wall at Nike,” said Rick Burton, a former U.S. Olympic Committee chief marketing officer. “Under Armour must be going wild behind closed doors.

Under Armour spokeswoman Danielle Daly and Peter Carlisle, Phelps’s agent at Octagon Worldwide, said the Olympian was required by the USOC to wear Nike, which sponsors Team USA. Three people with knowledge of the shoot said there was no such requirement (if this is true, no such requirement to wear Nike as the photoshoot is not an official Olympic related event, then it is truly an expensive mistake for Under Armour)

The USOC didn’t immediately respond to a request for comment.

Carlisle, the architect of the athlete’s multimillion-dollar endorsement portfolio, pointed out that there are reams of complicated rules and contracts that govern what Olympic athletes can wear, and when, during the games. “It is always challenging analyzing, interpreting, and managing the myriad rules and regs with which the athletes are told they must comply, with their eligibility at stake,” said Carlisle, who was said to be at the photo shoot.

If Phelps had to wear Nike, he didn’t do a very good job. A behind-the-scenes video from the shoot shows him wearing Under Armour shoes and what appears to be a Ted Baker polo. He shares the cover with Katie Ledecky, who in the video has on Nike shorts and shirt, and Simone Biles, who is sporting the Under Armour singlet that USA Gymnastics wears in competition, though she is personally sponsored by Nike. The logos on Ledecky’s and Biles’s clothes aren’t visible in the cover photo. Watch the video below:

The photo session took place at the Main Press Centre in Barra Olympic Park and lasted just 15 minutes, according to a person who was there. Phelps had come from an official USOC press event, where he would have been required to wear Nike. The Press Centre is also an official Olympic venue, which might have added to the confusion.

Of the roughly 40 people who attended the shoot, at least three were with Phelps. No one commented on the Nike pants.

“Somebody fell down, especially when you’re the most decorated athlete in Olympic history,” said Howe Burch, president of TBC advertising and former marketing executive for Reebok and Fila.

Sports Illustrated declined to comment, and the photographer who shot the cover didn’t respond to an e-mailed request.

The Time Inc. magazine (owner of Sports Illustrated sports media franchise) reaches 18.2 million people, and Nike will get about $453,000 worth of brand exposure, according to sponsorship and analytics firm Apex Marketing Group Inc. It also reaps the benefit of Under Armour’s embarrassment. The companies frequently compete to sign athletes like two-time NBA MVP Steph Curry, a former Nike athlete who has blossomed with Under Armour.

To read the full article, you may click onto this link. We would like to focus on the loss opportunity and how Nike gained a free exposure out of Under Armour expense.

Point to ponder:

Nike gained $453,000 worth of exposure, and don’t have to pay Michael Phelps anything. The party at the losing end on this, clearly is Under Armour, who have been sponsoring Phelps since 2010.
Keyword here = LOSS OPPORTUNITY
Let say an athlete received an ‘in kind’ sponsorship, no money involved, anywhere. And from that ‘in kind’ sponsorship, the brand(s) got an exposure valued at some quantitative value as Nike above (or could be higher or lower). Loss opportunity is to the athletes.
 
Sponsors are good in any way. But if it could be more than the usual ‘in kind’ thing, then it would be great. If you are an athlete, won’t you want to monetize as well? Are products enough for you?
 
Our point blank answer is – No, products can’t put food on your table nor pay for your training expenses and race fees.
There are many increased opportunities when we have a good brands-athletes relationship. But first step is to realize the opportunity, plan, and execute. Efforts can be executed well with some support (like what we do here as athlete managers). The outcome will ultimately make you more marketable to corporate sponsors, endorsements, and other outside revenue generating opportunities.
Contract negotiations are part of our service to our athletes (and brand partners alike). As an end to end athlete management solutions provider, we connect athletes and brands via a win-win-win relationship.
Now it’s time to explore your true sports and branding potential

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