London Olympics 2012: Moratorium begins on athletes marketing themselves

On Tuesday morning, a fan of Ryan Lochte could have logged onto the star American swimmer’s Web site and purchased Ryan Lochte T-shirts, Ryan Lochte sunglasses, Ryan Lochte hats. On Tuesday evening, a television viewer might have stumbled upon an ad for Subway featuring Michael Phelps, Lochte’s chief rival, hawking sandwiches.

But Wednesday morning, 10 days before Lochte, Phelps and their U.S. Olympic teammates participate in the Opening Ceremonies for the London Games, Lochte’s paraphernalia will be unavailable, and Phelps’s ads will be on hiatus.

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The U.S. Olympic Committee, in conjunction with the International Olympic Committee, begins a moratorium on athletes marketing themselves through companies that aren’t official Olympic sponsors Wednesday, and it holds through Aug. 15, three days after the Games conclude.

The rules date back to the days when all Olympic athletes were amateurs, and companies tried to profit by tangentially associating themselves with medal winners. This tactic, which the USOC calls ambush marketing, led to the current restriction, known as Rule 40, included in the athletes’ code of conduct. Violate the pact, and the result could be “sanctions including, ultimately, disqualification from the Games,” according to a USOC pamphlet distributed to athletes.

“Ambush marketing seems to be an issue that continues to rear its head in every Games,” said Lisa Baird, the USOC’s chief marketing officer. “There are ambush marketers out there that want to imply an association with the Olympics. They’ll take terminology; imagery, and they will get very close or crossing the line to really imply that they are a sponsor. That hurts us.”

Several athletes and their representatives, though, believe the athletes suffer more. “Absolutely terrible,” said Erika Wright, who represents Lochte. Evan Morgenstein, the chief executive of PMG Sports — whose client list includes several prominent swimmers, gymnasts, skiers and other athletes — said the USOC “has rendered these kids indentured servants.”

“It’s the big issue at this time of year, because the athletes’ eligibility is at stake,” said Peter Carlisle of Octagon, Phelps’s longtime agent. “Whatever your opinion might be, the stakes are high.”

The IOC allows official association with the Games — use of the Olympic rings, images of venues and the like — to 11 “worldwide” sponsors, companies such as Coca-Cola, General Electric and McDonald’s. Such deals have been estimated to be worth $100 million for every four years, a period encompassing one Winter and one Summer Games.

The USOC receives 20 percent of the revenue generated from those deals. The USOC also has relationships with a long list of companies — Deloitte, Hilton, Kellogg’s, Nike, among others — that grants those companies rights to use Olympic themes in its ads domestically. Those relationships go a long way toward funding the U.S. Olympic program.

“In a sense, the Olympics are kind of favoring the sponsors over the athletes,” said Bob Dorfman, a sports marketing expert at Baker Street Advertising in San Francisco. “But that’s where the money comes from.”