Michael Phelps’ second DUI arrest, coupled with his 2009 bong photo, may not sink him as a beloved corporate pitchman but could douse his earning power, branding experts say.
The Olympic swimming champion, 29, has for a decade thrived atop a deep reservoir of goodwill and American pride, weathering past indiscretions while pooling tens of millions of dollars in sponsorship deals by hawking watches, sandwiches, swim wear, and more.
But will his long sprint as a sleek corporate brand stall when three public PR slips are measured against his 18 gold medals, the most by any Olympian ever?
“The difference between a rut and a grave is the depth — and Phelps is digging deep,” said Dean Crutchfield, a New York-based brand consultant. His past clients include BP, PepsiCo and McDonald’s.
“As J. Edgar Hoover once said: 'Sex and drugs bring down famous people.' I hope Michael has saved a lot of money because ... (he's) about to have his income curtailed and future sponsorships blocked,” Crutchfield added.
As of midday Tuesday, five sponsors who back or have backed Phelps — including his latest addition, Aqua Sphere — had not replied to emails form NBC News seeking comment on Phelps’ arrest.
Phelps typed three tweets Tuesday afternoon, apologizing for his misdeed:
According to Maryland Transportation Authority Police, Phelps was arrested at 1:40 a.m. Tuesday and charged with driving under the influence after an officer clocked Phelps’ 2014 Land Rover traveling 84 mph in a 45-mph zone. Police said that he crossed double yellow lines while driving inside the Fort McHenry Tunnel on northbound Interstate 95, and that he later failed a field sobriety test.
Phelps announced in April that he was coming out of retirement in a bid to compete for Team USA at the 2016 Summer Games in Rio.
In 2004, he was arrested for DUI. In a subsequent plea agreement, he was placed on 18 months probation.
In 2009, a photo of Phelps sucking marijuana smoke from a bong went public. Shortly after that, Kellogg’s opted out of a contract extension with the swimmer. A Kellogg's executive said the photo was inconsistent with the cereal brand’s image. Subway, meanwhile, announced at that time it would stick with Phelps.
“We all care somehow for Phelps because of what he achieved for America and he does have some resilience to bad news,” Crutchfield said. “This is because Phelps is young, an amazing athlete and strikes us all as a decent guy.
“But this sort of reckless behavior that lacks any sense of good judgment is an awful example of what not to do when you're a famous sports star,” he added. “Brands don't want to be associated with this sort of behavior."
Will another company — or more — bolt from Phelps’ sponsorship pack?
“The brand, Michael Phelps, took another hit with this latest news,” said Tim Calkins, clinical professor of marketing at the Kellogg School of Management at Northwestern University. “Companies want to sponsor people that will reflect positively on their brands.”
But as a business commodity, Phelps has some major upsides that could soften the blow of alleged DUI No. 2, Calkins said. First, Phelps has not been in the news recently — and likely will keep a low profile, like other Olympians, until the run-up to Rio, Calkins said.
In that scenario, his Tuesday incident will have negative consequences with sponsors only if the public, indeed, remembers it. That, in a sense, is now up to late-night and cable comedians known for commenting on events of the day and lambasting celebrities. Meanwhile, new companies considering a fresh partnership with Phelps now will likely apply more scrutiny to that decision.
“Sponsors will ask some tough questions,” Calkins said. “Poor behavior in the months leading up the Olympic Games would be a significant problem.”
Before the 2012 London Olympics, Forbes reported that Phelps' slew of sponsorships earned him $5 million to $7 million annually, and that his agents were working to secure the swimmer long-term corporate deals to carry him for life.
In an odd twist of sporting scandal, Phelps’ standing as a sponsor may be shielded by so much other recent bad news: NFL players charged with domestic violence, and the case of NASCAR star Tony Stewart who was cleared by a New York grand jury after his car struck and killed a fellow racer standing on the track.
“Phelps won’t lose sponsors due to this,” said Darren Marshall, executive vice president of consulting and research at rEvolution, a global sports marketing firm based in Chicago. “He’s had two strikes now against 18 golds, and if you asked most Americans what the last issue was, they wouldn’t be able to recall it.
“It will be the same with this one by the time we get to the Rio Olympics,” Marshall said. “Oddly, the NFL and Tony Stewart issues may help Phelps a little here since his transgression isn’t on the scale of child or spousal abuse, or someone losing their life.”