Towson swimmer attracts endorsement deals

Daily Record, The (Baltimore), Jun 2, 2004 by Ezra Fieser

He wears Speedo swim trunks, talks on an AT&T Wireless cellular phone, uses a Visa card and snacks on PowerBar supplements.

In the world of athlete endorsements, Towson's Michael Phelps is being called one of the safest bets around. Even before he makes a run at a record-tying seven gold medals in the 2004 Summer Olympics, corporations are turning the 18-year-old swimming phenom into a household brand.

Yesterday, Berkeley, Calif.-based PowerBar Inc. announced it signed Phelps to a multiyear endorsement deal. The maker of nutritional bars and gels became at least the seventh company to partner with the world record holder, and sports marketing consultants say there are likely more on the way.

He's proven himself as a legend in the making, Natalie Ferguson, assistant sports marketing manager for PowerBar, said. We believe it will be a very effective endorsement because he is truly a brand ambassador.

Ferguson said Phelps has been eating the company's products since the age of 11. During training, he reportedly spends up to five hours per day in the pool, burning between 2,000 and 3,000 calories. He broke five world records at events last summer.

This summer, Phelps will attempt to match Mark Spitz's 1972 feat of winning gold medals in seven events.

But even if he fails, Phelps is sure to win the attention of an international stage and, in the process, provide plenty of recognition for the host of companies he is endorsing.

It's the halo effect. It's people watching him eat a PowerBar and saying 'Wow, he's a gold medalist,' said Jeffrey Bliss, president of Alexandria, Va.-based Javelin Group, a sports-marketing consulting firm. He can't charge what [Michael] Jordan or Tiger [Woods] can because they are playing day in and day out. But he has a global stage and if he does well he could have as much impact for [the companies] as anyone else.

Aside from his talent, Phelps has a lot working for him.

He's young. At 18, he can likely make another run at Olympic gold in the 2008 games in Beijing, China.

It's frightening, Bliss said. Because you almost know that he'll win at least one gold medal. And if he doesn't match the record, he's got the type of ability that at the age of 22 he can attempt it again.

In other words, whether Phelps wins seven medals or two medals, he will have endorsement value in the non-Olympic years.

Phelps is also going after the record in a time when we really need a hero, Ferguson said. Right now, with us being at war and everything that's going on - he can be that for us.

It feels like maybe our country is ready for a U.S. hero, Peter Stern, president of Strategic Sports Group, a sports marketing firm in New York, said. I think performance is going to make him a household brand. I think he will transcend his sport, like Lance Armstrong did for cycling.

Many feel Phelps is also one of the brightest stars in the dull pre-Olympic field.

Phelps is benefiting right now because in these games you really don't have that much competition for the spotlight, Stern said.

While all the attention may be putting pressure on Phelps to perform, it's also lining his pockets.

PowerBar did not release financial information about its endorsement, but others have. Speedo is paying roughly $500,000 per year until 2008 and has added a $1 million bonus if Phelps wins seven medals.

AT&T Wireless has a $250,000 contract that expires this year. Credit card company Visa is paying $100,000 per year until 2006. Argent Mortgage Company LLC is paying an estimated $250,000 annually until 2005. And wristwatch maker Omega has signed on with Phelps through 2008 at $150,000 per year.