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Why Is Under Armours Biggest Olympic Star Wearing Nike?

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Michael Phelps, the crown jewel of Under Armours Olympic athletes, is wearing Nike sweatpants, swoosh and all, on the covering of the most recent Sports Illustrated magazine.

In the world of sports marketing, this constitutes a colossal screw-up. Superstar athletesand their agents, managers, and marketing teamsare hyper-aware of what brands they wear, because they earn so much fund from endorsements.

Source: Sports Represented/ Twitter

That Phelps, an Under Armour athlete since 2010, would set a challengers logo front-and-center on the covering of their own nationals magazine that reaches more than 18 million people has insiders shaking their heads.

This will go on the wall at Nike, said Rick Burton, a former U.S. Olympic Committee chief marketing officer. Under Armour must be going wild behind closed doors.

Under Armour spokeswoman Danielle Daly and Peter Carlisle, Phelpss agent at Octagon Worldwide, said the Olympian was required by the USOC to wear Nike, which sponsors Team USA. Three people with knowledge of the shoot said there was no such requirement.

The USOC didnt immediately respond to a request for comment.

Carlisle, the designer of the athletes multimillion-dollar endorsement portfolio, pointed out that there are reams of complicated rules and contracts that govern what Olympic athletes can wear, and when, during the games. It is always challenging investigating, interpreting, and managing the myriad rules and regs with which the athletes are told they must comply, with their eligibility at stake, said Carlisle, who was said to be at the photo shoot.

If Phelps had to wear Nike, he didnt do a very good task. A behind-the-scenes video from the shoot indicates him wearing Under Armour shoes and what appears to be a Ted Baker polo. He shares the covering with Katie Ledecky, who in the video has on Nike shorts and shirt, and Simone Biles, who is sporting the Under Armour singlet that USA Gymnastics wears in competitor, though she is personally been supported by Nike. The logo on Ledeckys and Biless clothes arent visible in the covering photo.

The photo session took place at the Main Press Centre in Barra Olympic Park and lasted just 15 minutes, according to a person who was there. Phelps had come from an official USOC press event, where he would have been required to wear Nike. The Press Centre is also an official Olympic venue, which might have added to the confusion.

Of the approximately 40 people who attended the shoot, at least three were with Phelps. No one commented on the Nike pants.

Somebody fell down, especially when youre the most decorated athlete in Olympic history, said Howe Burch, a former marketing executive for Reebok and Fila.

Sports Illustrated declined to comment, and the photographer who shot the covering didnt respond to an e-mailed request.

The Time Inc. magazine reaches 18.2 million people, and Nike will get about $453,000 worth of brand exposure, according to sponsorship and analytics firm Apex Marketing Group Inc . It also reaps the benefit of Under Armours embarrassment. The companies frequently compete to sign athletes like two-time NBA MVP Steph Curry, a former Nike athlete who has blossomed with Under Armour.

The International Olympic Committee is notorious for its vigilance in the protection of the exclusive rights of the companies that sponsor video games. The USOC has a deal with Nike, which means U.S. athletes must wear Nike in medal ceremonies, at press conferences and other official Olympic functions.

USA’s Scottie Pippen, left, with Michael Jordan, centre, and Clyde Drexler, with their gold medals, on Aug. 8, 1992.
Photographer: Susan Ragan/ AP Photo

Star athletes, sensitive about protecting the companies that endorse them, often find creative work-arounds. When Nike pitchman Michael Jordan draped an American flag over his shoulder during the 1992 gold medal rite, it was a patriotic gesture that also encompassed a Reebok logo on his warm-ups.

It runs the other route too. Ive experienced situations where weve terminated a contract because an athlete “were in” paying to endorse a product indicated up in a public forum wearing a competitors product, Burch said. You pay enormous attention to something like that.

After mounting pressure, the IOC loosened its rules last year to let companies that dont sponsor the games, like Under Armour, feature Olympian in their ad. Those campaigns must be preapproved and cannot utilize Olympic trademarks such as the rings, or words like Rio, summer and gold. Under Armour has use Phelps in one such campaign since May.

The star swimmer has been at the center of an Olympic marketing snafu before. In 2012, an Annie Leibovitz photo taken of Phelps for a Louis Vuitton ad campaign was leaked while the London Game were still underway, a violation of IOC rules. Both the swimmer and the company denied releasing the photo.

Phelps isnt the first to do this, and he wont be the last, said Garry Cook, the chief global brand officer for the Ultimate Fighting Championship and a former Nike executive. Every now and again, your personal life slips into your endorsement life. It does happen.

Read more: www.bloomberg.com

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