Olympic gold no million dollar guarantee
Friday, August 15, 2008/
While Australia’s female swimmers have been the toast of Olympics, they’still don’t make the list of our best-paid Olympians. JAMES THOMSON reveals why success in Beijing may not necessarily translate to million-dollar deals for athletes.
By James Thomson
Success in Beijing may not necessarily translate to million-dollar deals for athletes. Big ticket sports stars still need to make marketing sense to snare a lucrative contract.
Australian sports lovers have been glued to the Olympic Games this week and it’s no surprise who is getting most of the attention – Australia’s three gold medal-winning swimmers, Stephanie Rice, Leisel Jones and Libby Trickett.
The glamorous and successful trio are already being touted a millionaires of the future. Celebrity agent Max Markson has already said Rice will make “millions” and claimed he would give his “right arm” to manage her.
Well Max, hang on to your limbs. The trio might actually be just outside the list of Australia’s top 10 Olympic athletes.
Top of the heap is basketball start Andrew Bogut, who earns about $16 million a year plying his trade in one of the richest sporting leagues in the world, the National Basketball Association in the United States. Bogut recently signed a contract extension with the Milwaukee Bucks team that will see him earn $80 million over the next five years.
Next is tennis star Lleyton Hewitt, whose Olympic campaign ended just a few days into the Games after Raphael Nadal knocked him out of the tennis tournament. Lleyton has made about $400,000 in prize money this year, but still has a big contract with Japanese tennis company Yonex from which he earns around $7 million a year.
Cycling star Cadel Evans became one of the biggest names in Australian sport this year after his second-place finish in the Tour de France. Professional cyclists earn big bucks in Europe and Evans’s status as one of the sport’s best should push total earnings towards $3.5 million or even $4 million a year.
Grant Hackett is Australia’s best-paid swimmer and has several sponsorship deals with companies including Telstra, Speedo, Uncle Toby’s, Audi and battery company Varta. His annual earnings are reported to be around $3 million.
David Anderson isn’t as well known as Bogut, but the basketball player still makes a handy living – around $3.5 million a year, according to BRW – playing for Russian team CSKA Moscow.
Female basketball stars Lauren Jackson and Penny Taylor also play part of the year in Russia and were estimated by BRW to have earned around $1.1 million last year. Another basketball player, Matthew Nielsen, plays in Lithuania and is believed to earn around $1.5 million.
Professional cyclists Michael Rogers and Simon Gerrans would also be earning close to $1 million year.
But while Stephanie Rice, Leisel Jones and Libby Trickett will do well out of their gold medals – and earn lucrative bonuses from their sponsors for winning gold medals – they will be lucky to earn $1 million in the next 12 months. After that, their earnings are likely to fall rapidly in the next few years as the golden glow fades.
There are a few reasons for this.
First, big swimming events are infrequent compared to sports such as tennis, golf or the various football codes. Sponsors are not going to stump up huge sums for swimmers that are only in the spotlight every few years during the Commonwealth Games or Olympics.
Second, while swimming is hugely popular in Australia, it is not really a global sport. This restricts the audience a sponsor can get access to, which in turn restricts the amount swimmers can earn.
Finally, the sponsorship pie just isn’t as big as it used to be. Research company IBISWorld predicts the amount companies tip into sporting sponsorships (including teams, athletes, facilities and sporting competitions) from July to December 2008 will reach $535.5 million. That’s a rise of 73% on the corresponding period in 2007, but it’s a long way from the $1.24 billion that companies spent in 2000.
Back then, Ian Thorpe was earning an average of $450,000 for every sponsorship deal he had. These days, swimmers would be doing extremely well to earn $200,000 per deal.
The big problem for companies is measuring the return from a sponsorship deal. While there are established metrics for many forms of advertising (particularly online advertising) quantifying the value of a sponsorship deal is a lot more difficult. With the economy slowing rapidly and marketing budgets under pressure, it is unlikely companies will put more money into this riskier form of marketing.
Read more about the rich
Amantha Imber runs a successful business — but she still has impostor syndrome Amantha Imber Inventium founder
Social media isn't about numbers, it's about connection Carlii Lyon Carlii Lyon PR founder
"My early decisions were rooted in fear": How good hires can set small business owners free Nancy Youssef Classic Finance founder
"No staff turnover": Business success hinges on a thriving company culture David Fazio Mate co-founder
Five ways to mentally prepare for the brutal capital-raising process Stacey Fisher Minnow Designs co-owner
In the age of online shopping, it's retail staff that make or break businesses Cal Doggett Properties & Pathways director