How Phelps Became the Face of PureSport

As history's greatest Olympian, Michael Phelps earns an estimated $5 million a year by endorsing some of the world's best-known credit-card, hotel and cereal brands.
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asr: see the deal, for 5% stake , the four team make them available at least 7 days/year ( I guess each of them ) for Ads shotting and company can use their images/video as much as they want.
- Since it is pre-olympic event , company was able to do for cheap 5% deal with all 4 of them ( no risk of who gets all gold medals .)
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But his appearance as pitchman for a Texas protein-powder maker might go down in the annals of sports marketing as one of the most unusual deals ever.


Before he earned his eight gold medals and became a global celebrity at the Beijing Olympics, Mr. Phelps and three teammates agreed to endorse PureSport, a protein mix made by a tiny Austin, Texas, company that didn't exist three years ago.

The agreement with Mr. Phelps and three other Olympic swimmers -- Aaron Peirsol, Brendan Hansen and Ian Crocker -- gave the University of Texas spinoff a dizzying start.

The foursome, introduced to the company while training in Austin last year, took a 5% stake in exchange for their endorsements.

But it is Mr. Phelps's new star power that has provided the seven-person Human Performance Labs LLC with financing and access to scarce shelf space at retailers. The drink mix, initially sold through specialty shops, recently won a coveted spot at the Sports Authority, a 400-store sporting-goods chain.

"Phelps was the clincher," says Terry Gilmore, an oil, gas and real estate investor who put up nearly $5 million in January to launch the company.

Mr. Phelps rarely enters the water these days. The up to six-hour daily workouts that included 10,000 meters in the pool, plus weight training, are a memory for the time being.

The strapping Olympian is changing into a spindly couch potato. His once-bulky chest now appears to sink in from his shoulders rather than puff out.

He orders cheeseburgers and fries for lunch. If he has no corporate obligations, he says he tries to make it out of bed at his home in Baltimore for the final morning edition of ESPN's SportsCenter. He often misses it. Then, he watches a couple hours of television, may talk University of Michigan football with his friends, catch a movie, and another day is done.

"Doing nothing is actually pretty easy," he says.

The self-imposed, six-month layoff, the longest since he became serious about swimming at age 11, will end in mid-February, when Mr. Phelps plans to begin training for the 2009 swimming season and starts his long march to the 2012 Olympics in London. He insists PureSport's drinks will be part of that training.

In Beijing, every time Mr. Phelps emerged from the pool at the Water Cube, a coach handed him a plastic bottle filled with PureSport's protein and carbohydrate-filled cocktail. "About halfway through the meet, people started knocking on my door asking me what I was drinking and if they could have some," Mr. Phelps said during a recent interview.

Today, the company puts Mr. Phelps and his crooked smile wherever it can -- on packaging, store displays and in retail store appearances. PureSport can't afford national television commercials or print campaigns, so Mr. Phelps has become the core of its marketing campaign.

Last month, Mr. Phelps traveled to Chicago to celebrate PureSport hitting the shelves at the Sports Authority. Some 200 people slept outside overnight to meet him in Chicago, and 1,500 arrived for the event, which won television coverage on several local stations.

"We get him for at least seven days a year, and we book the hell out of him," says Michael Humphrey, chief executive of Human Performance Labs and a former sales executive with Broadcast.com and CBS Corp.'s Simon & Schuster. "Everything we can do to connect him to our brand, we'll do it."

That puts PureSport among the rarified list of big-name brands. Mr. Phelps has endorsements with VISA Inc., Hilton Hotels Corp., AT&T Inc., Kellogg Co., and Speedo International Ltd, among others, according to his agent, Peter Carlisle of Octagon, the Virginia-based sports-marketing firm.

Ryan Schinman, chief executive of Platinum Rye Entertainment, a celebrity broker for advertising campaigns, said the intense connection with a tiny start-up poses a serious risk.

"If it fails, does he want to be so closely associated with a losing company?" Mr. Schinman said.

PureSport is hardly as well-known as Gatorade, but if the company is to succeed, it will need Mr. Phelps off the couch and doing what he does best: swimming, winning, and publicly drinking that protein cocktail.