HOW OLYMPIC DREAMS FACE ECONOMIC REALITY
Written on the 21 June 2012
THEY are all similar size, weight and colour – but not every Olympic gold medal is worth the same once it’s taken from the sporting arena to the business world.
That has been the commercial reality of every post-games period in the modern era as athletes of all disciplines have attempted to seek a return on their huge personal investment in a chosen sport.
Since the Olympics shed its strict amateur status almost 40 years ago, only a very lucky few have parlayed games glory into cash in the bank and long-term financial security.
The proof is plain to see.
Swimmer Stephanie Rice won three of those and rightfully was declared our golden girl. The sweet, big-smiling Rice has enjoyed considerable commercial success as a result of her three golds, although an impulsive and poorly thought Twitter comment cost her the free use of a sponsor’s prestige car.
But what about Australia’s other 2008 gold medal winners? It’s hardly been easy street in the four years since for the likes of pole vaulter Steve Hooker, kayaker Ken Wallace or diver Matthew Mitcham – all Beijing heroes who no doubt would have been delighted to drive a new Jaguar for just a weekend let alone a year, like Rice.
As the London Games approach (they begin on July 27), another Queensland athlete at the pinnacle of her career will again test the worth of Olympic gold.
But this time, things are a little different. The four years since the last Olympics have tested the economic mettle of countries and businesses around the world.
Many businesses are no longer capable of tossing bucketloads of money at popular sports stars simply for them to attend a corporate function or wear their logo.
Today, the link between sport and business is a highly commercial arrangement that must provide a tangible return on the investment.
The Gold Coast’s Sally Pearson could Provide that magic.
Pearson is the favourite to win the 100m hurdles in London. She is the world champion and the best performed in the event by a long margin for the last two years.
Barring injury, she is short odds to improve on the silver she snared in Beijing.
Maybe coming so close with her second place made Pearson more hungry to improve on the track.
She will be better organised and more experienced to handle the business of being a sporting superstar away from the arena.
The bubbly, pony-tailed speed machine of four years ago still looks the same and performs even better, but off the track these days she is Team Pearson.
A professional management team and a multitude of sponsors are already locked into her corner, with some committed to contracts that will see bonuses paid and appearance fees confirmed for any success in London.
Pearson is sponsored by companies including adidas, AMP, Mitsubishi, Nine Network, Qantas and Coles. She puts her name to a national newspaper column and, interestingly, she already has a foothold in the social media space.
Rather than an official website, Pearson regularly updates her fans through her Facebook page.
With a squeaky-clean image, and natural talent to match, some observers say Pearson is one of the best-placed Australian athletes in a decade to be in a position to realise the true worth of a gold medal.
Former NRL footballer Tim Fuller specialises in media, entertainment and sports matters for the Walsh Halligan Douglas law firm. He describes Pearson as an ‘immensely marketable athlete’.
“She is immensely talented, unscripted in her responses, has a spirit which says she loves life and she radiates exuberance,’’ says Fuller who played with South Sydney and the Gold Coast.
“She seems very unaffected by her successes, is level-headed and has no airs or graces. Australians really warm to her and she is a much loved athlete in this country.”
“A successful athlete will have in place a management team that includes a manager, accountant and maybe a financial adviser and when success happens the athlete is structured for it,” says Joske.
“Success then builds success because the athlete can concentrate on performance knowing that experts are looking after their future.”
Olympic great Kieren Perkins, who now works for the National Australia Bank Private in Brisbane, knows firsthand the hard work required for a successful transition from gold medal athlete to good corporate manager.
He says capitalising on Games glory can often mean competing against your Olympic team mates in the commercial marketplace and putting yourself firmly in the public eye in different and new ways.
Most athletes fall short of the mark, explains Perkins.
“The vast majority of Olympic athletes coming back home with a gold medal won’t make very much money,” says Perkins.
“Only half a dozen will make a good income out of it, and certainly not enough to retire on. For most, what they make won’t even cover the expenses they outlaid to get there in the first place.
“When you are coming back from the Olympics, the team might have 25 gold medals and you have to get a point of difference between yourself and the others which is somewhat challenging.
“If you win a gold medal, there will be media exposure and if managed appropriately it can bring opportunities. But there are no guarantees and some people aren’t comfortable with all the attention.
“For some people it can mean a big deal, but for others there is not really the opportunity because they aren’t front of mind.”
Sport is a business
Joske says it can be demoralising for some athletes to miss out on sponsorships, but points out that sport is like any business and opportunities go in cycles.
“High-profile Olympic athletes can carry sponsors across the four-year gap, while others become much more attractive to private industry a few months out from a Games. Private industry also changes its focus over a period of years.
“Ten to 15 years ago, some individually sponsored athletes from various sports tarnished the marketplace and by association the brand they represented.
“The industry reaction generally was to move away from individual sponsorship and concentrate on sponsoring teams, competitions and the sport itself.
“This trend seems to be changing back to a balanced focus which includes individuals.
“Athletes are continually reminded of their obligations as role models and as professional athletes and this professionalism is bringing the sponsors back, even in difficult financial times.”
Joske says companies enter sponsorships with varied goals and ambitions and the key to long-term support is ensuring these arrangements evolve into partnerships.
“For some sponsors [wearing clothes and appearing in advertisements] is enough. It just depends on the sponsorship category and the various aims of the sponsors,” he says.
“For some it is internal communication and motivating staff. For others it is about linking two successful brands in the same media spotlight.’’
Either way, Joske says, the key is to build the athlete’s brand in a way it can be applied to many objectives and can be applied to various programs that are mutually beneficial to the individual and the sponsor.
Fuller believes Pearson shouldn’t feel pressure to deliver gold because the work her team has done has insulated her earning potential in the event she misses out on gold.
He uses retired sprinter Melinda Gainsford-Taylor as an example of what can be done even when you are not the world’s fastest.
“She never won an Olympic gold medal, but she was in a very good place when her career finished and she has forged a successful career in the media and also sits on the board at the Manly Sea Eagles rugby league club,” says Fuller.
“A gold medal is not the be all and end all. Sally is still young and there will be other games should she not succeed in London. The bottom line is she is one of the most marketable athletes in the country.”
Fuller also believes swimming sprint star James Magnussen is in a powerful position to be a commercial success.
“When I look at James, I see one of the most commercially marketable and most valuable athletes in this country,’’ Fuller says.
“James Magnussen is the real deal, the complete package. His worth out of the pool is far more than he is worth in it.”
“He had got very good credibility with the general public and his results in the pool certainly stack up, so there will be plenty of opportunity to capitalise on his marketability.”
For athletes who are successful, the period after the Games can generate more money than they have seen in their bank accounts in the preceding four years.
Medallists get cash bonuses irrespective of any private sponsors. While the Australian Olympic Committee is yet to announce its bonuses for London, at the last Olympics, athletes received $20,000 for gold, $13,400 for silver and 10,000.
Sponsorships can generate 10 times those amounts.
Having good advisors around in the months after the Games is critical, says Perkins.
“You need a good management team to look at the options in terms of creating and understanding the commercial opportunities out there,” he says.
Perkins says many factors outside of an athlete’s control come into play – including how many medals Australia wins.
Joske agrees and says it is foolhardy to even speculate on the commercial value of any gold medal.
“There are just too many intangibles,” he says.
“The one thing we do know is that for an athlete to win a gold medal, it has taken many years of hard work and a commitment to excellence.
“To that athlete, that medal is priceless.”