The new objective, Carlisle says, is to focus on Phelps’ broader goals — to popularize swimming and promote water safety — and turn them into vehicles for corporate partnerships.
Octagon has been laying the foundation for this shift for years. Immediately after the Beijing games, Phelps used his $1 million bonus from Speedo to create the Michael Phelps Foundation, a nonprofit that helps teach water safety to children.
“If he just goes in and does an appearance, that doesn’t really do much long-term,” Carlisle said. “But if he can get support for the program he’s running, that’s what will make his reach bigger and deeper. At this point, the best partners Michael can have are those that share his objectives in some way.”
The monetization of Olympic athletes is a relatively recent phenomenon, said Prashant Malaviya, associate professor of marketing at Georgetown University. Until the 1970s, competitors were prohibited from accepting endorsements and payment for commercial advertising. Competitors were required to be amateurs. It wasn’t until 1986 that professional athletes were allowed to take part in the Olympics.
“The amount of sponsorship money that companies are putting into the Olympics is getting bigger and bigger,” Malaviya said. “They’re looking for as many athletes as they can who they can continue to bring in money for a few years.”
Octagon was founded in 1983 as Advantage International, just as the business model for Olympic branding was taking shape.
“Things were changing and by the ’90s, the marketability of Olympic athletes was dramatically on the rise,” Carlisle said. “In the past, it had been that you would focus on the Olympics every four years, or two years, but it quickly became a full-on specialization for us.”
The company wouldn’t disclose financial information, but Carlisle said the firm’s Olympics division continues to grow from year to year.
A team of 15 employees in Octagon’s Olympics division now works year-round to represent Olympians. Many will head to London this week, but a few will stay behind to work toward the 2014 winter Olympics in Sochi, Russia.
Other divisions in McLean take care of the logistics that go along with instant stardom and commercial success: financial planning, legal advice, saving for retirement. They help corporations fit athletes into their messages, and teach athletes how to deal with big-box companies. It’s a complex eco-system, Octagon founder and President Phil de Picciotto said.
“It’s just gotten bigger in every way — the number of countries participating, the quantity and quality of athletes, the price of sponsorships,” de Picciotto said. “The Olympics, more and more, is becoming a brand unto itself.”
Exactly what that brand is worth, though, varies from sport to sport and athlete to athlete. Very few will sign multimillion dollar contracts. The majority of gold medal Olympians will get smaller endorsements: appearing at track and field meets, or participating in professional tours for sports such as beach volleyball and snowboarding.
“There are so many gold medal winners that will be difficult to market nationally or internationally, yet [most medalists] will do quite well for themselves in the next four years,” Carlisle said. “They may not get a car or restaurant endorsements, but they can certainly get eyewear deals or snowboarding boot deals.”
Even so, there is only so much a firm like Octagon can do. All endorsement deals are predicated, Carlise said, on one factor: A gold medal.
“All we can do is provide a foundation,” he said. “And to be honest, you have to win a gold. That’s just what, in general, the market and the audience seem to think is a threshold for relevance.”
For now, there’s not much Carlisle and his team can do until the Olympics are over. They’ve secured deals with Procter & Gamble and Under Armour for Phelps, and Polo Ralph Lauren and Kellogg’s for gymnast Aly Raisman.
Last Wednesday, the U.S. Olympic Committee and International Olympic Committee began a moratorium on marketing Olympic athletes. Until Aug. 15, three days after the games end, all commercial endorsements are off-limits.
“There are many story lines that will emerge during the games,” de Picciotto said. “There’s always the chance that there will be a breakthrough star, somebody who is completely unexpected. No one knows the outcome until the Olympics are over.”