Posted by. Disrupt Tech. August 26, 2021
A victory starts with a journey and our efforts to make the run. Otherwise, all the great wars that were won would have just gifted warriors with a simple pat on the back.
Apart from warriors, let’s talk about athletes, who perform an incredible jump (literally) in the field of sports, and get their big break.
The Olympic games are a very prestigious tournament that is held every four years. The general idea is that the winner gets a medal, and there are really cool sporting events.
But, what IS the Olympics? To start off, it is an athletic fiesta that took its inception in Ancient Greece. Afterward, in the late 19th century a reboot took place. Every major athlete worldwide comes to this gathering and shows their talent. Whether it’s a race, a show of strength, or just plain skill, everyone competes for Gold.
In 2020, the Olympics were supposed to be held in Tokyo, Japan. However, because of the global pandemic that is ongoing, it was canceled. There were chances it would have seen a similar fate in 2021, but the officials of Japan gave it a green light.
So, every masterful athlete who has their victory gets a gold medal. But what is the financial benefit from it all?
Well, there are various ways to receive cash on behalf of their win. One of which is an endorsement, where big brands try to make a contract with the athlete, for their marketing campaigns, and for the athlete to get a big cut.
For example, the state of athletes from the U.S. has a system. Their Olympic and Paralympic Committee decided to award athletes based on their specific medal win. Therefore, $37,500 for Gold medals, $22,500 for Silver Medals, and $15,000 for Bronze Medals.
In terms of tax, unless the Athletes have a gross income that exceeds a whopping 1 million, their earnings will not be taxable otherwise.
There are other ways the U.S. athletes also gain from an Olympic win. A helpful benefit is receiving health insurance and access to renowned medical facilities. Aside from that, athletes will also receive a helping hand with their education, with college tuition.
On the other hand, Singapore gives a much larger monetary reward to their respective athletes. So, if someone wins a Gold medal, they get paid a huge sum of 1 million Singapore Dollars ($737,000)! Compared to America, that’s nearly twenty times more than the US athletes!
But, the money is of course taxable, and the athletes must return a part of their earnings to their domestic sports associations. That money will then count as an investment for further development, and intense training.
It might be a dream for many to undertake, but once you hit big, you keep rising. So, when athletes gain their respective Gold medals, they do get a cut. But, that isn’t the only form of income they rely on. There are other forms of revenue, that can help them progress on their sporting journey.
Every country participating in the Olympics pays homage to its own sports associations. So, there are high chances that Athletes will receive a stipend or training grant from them.
That is the case for many, but there are some athletes who still hold regular jobs alongside their Olympic journey. This may be because their country does not hold good sponsorships, or the investment in the sports sector is a bit lacking in funds. So, athletes still try to win for the love of the sport.
Finally, the cherry on top is a multi-million dollar endorsement deal. A good example is Simone Biles who is an American Gymnast, winning an abundance of Olympic Medals for her country. Her career has expanded quite a bit when she received a good number of endorsement deals, such as from GK Elite Sportswear, Kellogg’s, United Airlines, her most recent one is Gap’s Athleta brand, and she was formerly tied with Nike.
Simone has earned quite a lot from endorsement deals from big names in the business. She’s not the only athlete however, Olympic professional swimmer Michael Phelps has a good amount of endorsements deals as well.
Cristiano Ronaldo has a good deal with Nike and other brands. So that should give you an ideal image of the relationship between athletes and consumer brands.
Naomi Osaka a Japanese tennis player who was in the Tokyo Olympics is also an athlete who has multiple endorsements with her name. Having an endorsement with Nike, and being the brand ambassador for Nissan puts her in the highlight for her country.
So, what is the deal here? Why do big brands want to make a partnership with well-known faces in the athletic realm? The truth is, it creates a mass appeal.
From a consumer point of view, think of a thousand fans of Simone Biles, or C.Ronaldo. Right, imagine they wear a specific shoe or apparel from their own endorsement brands. All those fans will rush in to buy from these brands, and the profit emerges from thousands, even millions in revenue.
It’s not just the fan margin that’s bringing in the cash, but also the marketing value. A business needs a face for its ads. It has to be a human being, they have to be well known, and the athlete must assure the public about the brand.
Therefore, when an athlete is tied with an endorsement deal, they have to wear and present the company’s goods at their own events. So if C.Ronaldo had a match with his team Juventus, he has to wear Nike Boots.
Here’s a story for the ages, about Russian athlete Vitalina Batsarashkina. She won a silver medal in the 10m air pistol at the Rio Olympics in 2016, then afterward this year in 2021, she won a Gold medal.
What’s special is that she was wearing a Witcher Medalion. It isn’t from a brand, but rather from a series of novels, videogames, and a tv series called The Witcher.
Because of her wearing that, and winning Gold, she was welcomed back home with a song. The song was from the TV show, and that’s what brought her value.
The entire globe watched on as the athletes won medals one after another. But, here’s a breakdown of how many gold medals the top ten countries won –
Marketing of the Tokyo Olympics was a bit tricky as there were billions attending at the previous one in 2016. But, now it’s mostly home viewers. Older audiences are more likely to be interested in the Olympics, because of the sport itself.
Whereas, younger audiences might not be familiar with the history and excitement of it all. That’s where sponsorship come into play because once people see the athletes linked with big brands like Nike, they immediately seek to purchase their product.
Aside from brands, the negative effect of the Tokyo Olympics are at play here as well. Marketing for such a global event is expensive because it has to be viewed on multiple TV channels, costing airtime and ad revenue as well.
Tokyo natives weren’t also fond of the idea of the Olympics being held because of the coronavirus pandemic, and infection rates skyrocketing.
Even if that was the case, the marketing and importance of the event were still shown. Because right before the event the Football tournament Euro 2021 was held, and everyone watched it.
So from the perspective of the Tokyo Olympics, it should have the same weight. The people in charge of the marketing campaigns gave it their all to make sure the competition was widespread, and brands investing and taking part in the event were as involved as they could be.
The Olympics are an incredible tournament, and even if Tokyo was reluctant to hold the event, it still prospered. Because of the global pandemic, there was not a single person in the crowd. Precautions were taken, therefore it was a responsible establishment.
Coaches and players alike still enjoyed their glory. Brands were also on the sidelines, so it was all a win-win situation at a time when people desperately needed an uplifting.
So the key takeaway is that, do athletes always have a chance at a million-dollar endorsement deal? Yes, and no. First of all, it depends on the player themselves. How many wins they have, and also if they align well with the brand itself.
That isn’t to say that brands are way too picky and never decide to take in new faces alongside their existing ones. They will show people value because they understand that the commitment is real.