Michael Phelps, Businessman: The World's Greatest Olympian Writes His Second Act

Michael Phelps had a better 2016 than you. He got married. He had his first child. He starred in the year's best ad—an elegiac masterpiece by Droga5 for Under Armour. And at 31, the planet's greatest-ever swimmer went to his fifth and final Olympics, in Rio, seeking redemption—four years after a lackluster (for him) London 2012, and two years after a fraying personal life ended in a DUI arrest (his second) and rehab. Redemption, he found. Phelps grinded out a storybook ending to his swimming career in Brazil, winning five gold medals and a silver, putting his tally at a staggering 28 Olympic medals, and 23 golds. Just as important, he went out at an emotional and physical peak. He was in the best shape of his life and excited to be in the pool—a stark contrast to the motivational problems that haunted him before and after his first retirement, post-London. "It's been a crazy year, an honestly ridiculous year, one of the greatest years of my life," Phelps tells me one late November afternoon in Manhattan. (He calls Paradise Valley, Ariz., home these days, and is visiting NYC for USA Swimming's Golden Goggle Awards.) "I don't know when everything will settle down, but it's been awesome. Coming back, going through some ups and downs away from the pool, and being able to finish my career on my terms—that's all I wanted." You couldn't have scripted it much better. Except now, it's all preamble. How the most decorated Olympian in history writes the rest of his life—the business career he envisions for himself, in the mold of a Jordan or a Jeter; his charity work; his family life; his efforts to grow the sport of swimming; his endorsement deals; and his own burgeoning MP brand—is entirely up to him. It's not at all clear he can be as dominant out of the pool as he was in it. But he has the time, and the freedom, to pursue anything he likes. And there are signs, some of which weren't evident even two years ago, that he might have what it takes to enjoy a very interesting second act indeed. [kickout id="1"] 'A Global Icon' It will start, of course, with commercial endorsements, which have always provided the lion's share of Phelps' income. (He has made some $75 million off brand deals in his career, according to Money Nation, while his swimming exploits netted him less than $2 million.) His unique value as an endorser is twofold: His accomplishments are unmatched, in any sport, and were achieved on a global stage. That combination of excellence and reach is tempting to any number of advertisers, particularly U.S. brands expanding overseas. "To the extent anyone can be a global icon, Michael is. He's recognizable and relevant in just about every market we want to be working in," says his Maine-based agent, Peter Carlisle, managing director of Olympics and action sports at Octagon, who signed Phelps in 2002 when he was just 16 and has become one of his closest friends. "Even if you find an athlete that is compelling in China, what's the likelihood they're equally compelling in Russia, in Brazil, in India? Michael is very popular in India. Just last week I got an offer from Pakistan. There just aren't many athletes who move the needle in so many different markets." Many Olympians have a short shelf life. Exposure on one or two nights every four years often isn't enough to sustain value, unless you're a superstar. But Phelps has excelled at so many Olympics, and on so many nights at each one, that his value has become a constant—and could remain so, even with his lower visibility in retirement. "When he's at the games, it's every day for nearly two weeks, and it is everywhere," says Carlisle. "Everyone in every market on Earth, practically, watches some of it. Most people don't remember his first one"—the Sydney Games in 2000, where Phelps, at 15, finished fifth in his only event, the 200-meter butterfly—"but the other four, he dominated. By the time you get to Beijing, I mean, that's unforgettable. When you hit London, and you hit Rio, you're just substantiating the platform he already has, the relevance he already has, in all these markets. People tune in to watch him win, and he does." Phelps is beloved in China, in particular, for the record eight gold medals he won at the Beijing Games in 2008. That love affair has continued, and is being leveraged. Phelps was just in China in November for events with a longtime partner, Under Armour, and a new one, Beats by Dre. "As soon as we were done with the Olympics, we took him to China," says Adrienne Lofton, Under Armour's svp of global brand management. "We did pop-up workouts with him there. We had retail experiences with him. He brought his family—Nicole and Boomer were there. You'll continue to see us do that. Bringing him to fans all over the world allows for that one-to-one interaction we believe in." "China has been so huge for me. I could never thank the Chinese fans enough for everything they've done and helped me with," Phelps says. "When we were over there, I went to the Great Wall. I went back to the Water Cube. We were walking around in Beijing and Shanghai. It feels good to just feel the fans' love and support. That's something, in the past, I might not have noticed that much. But I feel it a lot more now with the changes I've made in my life." In addition to the global reach, there are Phelps' irresistible core brand attributes—unmatched excellence, hard work, performance, achievement, success under pressure. It's a potent mix for brands wanting to tap into a glow of extraordinary exclusivity. "He's the greatest Olympic athlete ever. Any brand on the planet would be lucky to be in the same room with him," says Luke Wood, president of Beats by Dre, which signed Phelps to an ad deal after Rio. "He's just a tremendous, tremendous winning athlete." 'A Natural Fit' Phelps and his agent have been deluged by offers from brands since Brazil—sometimes half a dozen a day. But Phelps is selective, and applies a basic rule to partners. "Every partner I've ever worked with is something that is already a part of my life," he says. "Omega [watches]. A swimsuit company [first Speedo, now Aqua Sphere]. Under Armour—even before I was with them, I wore them. A good endorsement could be a lot of money, but if it's not something I'm comfortable with, I'm not going to do it." Beats is a good example. The images of Phelps poolside, stone-faced under headphones as he preps for a race, are legendary. He wore Beats headphones in Rio—he had to tape over the logo, as the company wasn't an Olympic sponsor—and it was only natural that the brand eventually came calling. [jwplayer yONpI173-1kT9Z8rj] "I think he wore Apple headphones in Beijing, and maybe Bose in Athens," says Carlisle. "He didn't have a deal with Bose. He didn't have a deal with Apple. These are the obvious fits. He ought to be working with somebody in that category." Phelps appeared in the star-studded "Got No Strings" Beats commercial from Anomaly that broke in October, and is also in its new "Be Heard" spot, which rolled out late last week. But Carlisle says the events in China are what really opened the brand's eyes to Phelps' potential. "My experience has been that even the best marketers don't realize the unique position Michael's in until they're in it," he says. "With Beats, we said, let's start working together. We'll allow for it to be narrow, because he loves the brand. He uses the product. It's a great image fit. And I have confidence that you will get it really quickly." In China, Phelps was welcomed like a rock star. "Companies like this know what they're looking for in terms of effect. And the effect is amazing," Carlisle says. "It's difficult to take an American athlete to China and create this effect. It's just not an easy thing to do. Once brands use him, and they get that visibility, that's when the magic happens." "We did an interview with him at the Apple Store in Shanghai, and 1.8 million people watched the livestream. That's a big number," says Beats' Wood. "My instinct is that if we went to Moscow, or London, or Peru, people would react the same way. There's a tremendous respect and love and interest in his accomplishment." [jwplayer XevNIm5l-1kT9Z8rj] Also in October, Phelps starred with Danny McBride in a big spot by 72andSunny for Activision's Call of Duty, and with Jim Parsons in a campaign by mcgarrybowen for Intel. Phelps was already a huge Call of Duty fan. He played it relentlessly last spring—logging, he has said, 500 games in two weeks—while prepping for Rio at the Olympic Training Center in Colorado. (He's also an Activision veteran, having appeared with Alex Rodriguez, Kobe Bryant and Tony Hawk in a 2008 Guitar Hero campaign.) The Intel deal was more "transactional," Carlisle admits, with the brand capitalizing on the Rio success. One spot resurrected "Phelps Face"—the meme that went viral in Rio when Phelps was seen glaring angrily under a hooded sweatshirt in the ready room before a race. [jwplayer hUn8Mc6u-1kT9Z8rj] "Some of those make sense. 'He's hot right now. Let's do an ad,' " says Carlisle. "But the ideal partner is a long-term partner that integrates with the other things Michael's trying to do. I like to think we'll build a partnership with Intel that is very different than the one they initially envisioned." Phelps' other brand partners include Omega watches (with him the longest, at 14 years) and a slew of smaller brands—Aqua Sphere, Master Spas, Krave, 800Razors.com and Sina Sports. But most compelling, perhaps, is his partnership with Under Armour, based in his hometown of Baltimore. Phelps had been a UA fan for years, and finally signed with the brand in 2010 (after Carlisle renegotiated his Speedo contract to let him endorse another brand's dry-land athletic wear). The Baltimore connection made so much sense, but it was more than that. As a gritty underdog brand, UA focuses its marketing largely on the pain and sacrifice of training. Who better, as an endorser, than a man who toils for years out of the spotlight for a quadrennial shot at glory? [jwplayer BCT7gioJ-1kT9Z8rj] That was exactly the theme of Phelps' most recent Under Armour commercial by Droga5 (above), which broke in March—and which Adweek just named the best ad of 2016. "He's one of the most hardest-working athletes on our roster," says UA's Lofton. "There's this unwavering determination to be his best self. Working out constantly is the kind of DNA we believe in at Under Armour. It's the will of the spirit of the athletes that Michael absolutely represents within himself." 'The Imperfection of Life' Beneath his superhuman feats, though, Phelps is very human indeed. Asked to name his most compelling characteristic, the first thing Lofton mentions is not his greatness but his humility. It's an answer that resonates, given Phelps' well-known mistakes out of the pool—the first DUI arrest at 19; the leaked photo of him smoking from a bong five years later; the second DUI arrest in 2014. These weren't isolated incidents. The downward spiral in Phelps' personal life after Beijing has been well documented—the lack of motivation or purpose, the drinking, the crumbling relationships with friends and family. Something was clearly wrong by the time of the London Games in 2012. He performed admirably, winning four golds and two silvers, but could hardly bring himself to train beforehand. He had lost his passion for the pool. [kickout id="2"] He hit rock bottom with the DUI arrest in 2014. Phelps has said he locked himself in his house for 72 hours afterward, sending just a single text to Carlisle that read, "I don't want to be alive anymore." Soon after, partly at the urging of his close Baltimore friend Ray Lewis, Phelps checked into a six-week in-patient rehab in Arizona. It changed his life—and perhaps saved it. "I'm different than I was two years ago. I'm way different than I was four years ago at the last Olympics," he says now. "Being able to make that step and grow from things I've gone through, and be the real me—I look in the mirror, and I love who I see. That was a huge step for me." Carlisle, who knows him as well as anyone, suggests the man on the pedestal was only half of the real Michael Phelps anyway. "When I first met him, other than being a prodigy, he was just very ordinary. Extraordinary in the pool, ordinary out of the pool," Carlisle says. "People find it so fascinating how successful he's been. You're drawn to him because of his greatness, which you can't really relate to. But you relate to him because of the mistakes he's made. It enables you to see him as just a normal guy." Carlisle doesn't downplay the mistakes. "They were real, and they were significant. And they did impact how certain people feel about him," he admits. "But at the end of the day, he's accepted responsibility and worked hard to change. And I think he's honest about how difficult that's been." From a brand point of view, it's not that the mistakes—even if they made Phelps more relatable—necessarily made him more sellable. Indeed, at first, quite the opposite. After each incident, his partners had to reevaluate their relationships with him. (After the bong photo, he drew a public rebuke from Kellogg's. But that contract expired a few weeks later, and no brand has dropped Phelps as an endorser in his career, Octagon says.) The point is that the mistakes eventually forced a reckoning, from which Phelps emerged stronger and more mature. That, more than anything, is what makes him more sellable, particularly long term, as he builds out a lifelong business plan. His transformation since 2014 speaks to an inner strength that should be as useful out of the pool—personally and professionally—as his physical strength was in it. "His life has been lived in the spotlight, and the imperfection of life becomes very clear when you have to live it in front of the world," says UA's Lofton. "We've supported Michael, and we've celebrated Michael as he's gone from a very young athlete to a man, a leader and a father." 'Something I've Dreamed Of' When his contract with Speedo expired in 2012, Phelps split with the company and started work with his longtime coach Bob Bowman on a high-performance swimwear brand of his own, under the name MP. He could have licensed his name to a major apparel maker, and had them make swimwear—the way Nike and Under Armour do with athlete-endorsed sneakers. But swimming is unique. It takes intense engineering to make an Olympic-caliber swimsuit, where fractions of a second can separate gold from fourth place. Big brands just don't do it. In the end, he partnered with Aqua Sphere, a swimming equipment maker whose engineering credentials were impeccable. Its parent company, Aqua Lung, pioneered modern diving equipment in the 1940s with Jacques Cousteau. Phelps was retired at the time. But when he decided to make a run for Rio, MP became even more of a passion project. It meant he would swim at his final Olympics in his very own suit. "I never had that opportunity when I was working with past sponsors," he says. "It's something I've always dreamed of. Being able to make the goggles, make the cap, make a suit—for people learning to swim, all the way up to the highest competitive swimmer you can possibly get." [jwplayer DIsFtfkU-1kT9Z8rj] "His final chapter was written in the suit he developed," says Carlisle. "If that's the brand you're going to be marketing throughout the world for the rest of your life, it's nice that it's integrated in your [Olympic] story." Now retired for real, Phelps is in another unique position with the MP brand—that of a client who gets to choose a slate of MP endorsers. "We're at a point where we can almost pick a dream team of who I want in my suits, so that's the next step," he says. "This is all such a new journey for me, but it's so exciting because I've never done it. I'm having fun, and doing what I love." The notion of modeling MP after something like Nike's Jordan Brand—housing it entirely within UA, for example—is tempting for obvious reasons. But that's impractical at present (UA doesn't make any swimwear currently, much less high-end stuff) and also not necessarily what Phelps would want. Making his own high-end suits signals a commitment to growing the sport of swimming, a cause he's been working on since his early days. It also puts him in direct competition with other swimwear brands. And Phelps is a pretty competitive guy. "The brand is something that will be built over a lifetime," he says. "Our suits are getting out to more and more people every day. I believe I have the best swimsuit in the world, and hopefully other people agree with me. Would I like to be the best swimming brand in the world? Of course. I never want to be second. There are a couple of other brands in the industry that I would love to surpass, and make ours the best." And actually, MP might have a bigger future within UA, which is already selling a line of MP T-shirts. Lofton declined to say how much bigger that partnership might get, but said UA is thrilled to "celebrate Michael through the lens of his brand and ours together." Phelps' commitment to swimming extends to his charity work, too. In 2008, he started the Michael Phelps Foundation (with a nice $1 million bonus he got from Speedo for winning the eight golds in Beijing) to promote water safety and encourage youth swimming. Its "im" program is now available in every U.S. state as well as 35 countries. "I still want to take swimming to a newer, better level because in my opinion it hasn't reached its peak," Phelps says. "That was a goal I set out to do 15 years ago, and until that's fully accomplished in my eyes, I'll be fighting for that. Swimming will always be a part of my life. That's never going anywhere." [kickout id="4"] 'A New Phenomenon' Can Phelps stay relevant in retirement? His supporters point to his self-belief and hard work, which set him apart from other athletes and could translate to business success, too. "He's such a driven individual," says Beats' Wood. "He'll continue to work as an endorser. He'll be a fearless entrepreneur. And he's a deeply committed philanthropist. My instinct is that he's going to win in everything he does. The truly timeless greats are great forever." Just last week, Phelps signed with a new brand partner, Leesa Sleep, a direct-to-consumer mattress brand. He's on the Wheaties box for the third time—this time as the General Mills brand's first lifetime achievement honoree. The new Beats spot is quickly gaining traction. And Intel's "Phelps Face" commercial is still in heavy rotation on TV. (Phelps remains amused by that whole phenomenon. "The funny thing is, people always ask me if I can recreate it," he says with a laugh. "Like, yeah, you want to really piss me off? Go ahead!") In a more entrepreneurial vein, Phelps recently told the Associated Press he might like to invest in a few Silicon Valley startups—but offered no further details. Those close to Phelps say he's drawn to the idea of entrepreneurship, in particular after spending so much time with UA founder Kevin Plank, whom he admires enormously. For the time being, he has his hands full with another pretty big commitment—his family. Phelps married Nicole Johnson, a former Miss California USA, in June, a month after they welcomed their first child, a son famously named Boomer. The family have become darlings in social media. Phelps' social footprint is around 14 million—with 9 million fans on Facebook, 3 million on Instagram and 2 million on Twitter. Most adorably (and amusingly), Boomer is also on Instagram—with almost 800,000 followers of his own. "We just did it as a joke. We were like, whatever, nobody's probably going to follow it," Phelps says of Boomer's account. "It was crazy. It just kept climbing. It's always funny with him. I've turned into one of those dads who just wants to take a photo of everything." More broadly, Phelps' embrace of social media shows again how the walls have come down—that he's more comfortable than ever sharing parts of his life with fans. "I post more than I did before, and I'm posting more personal things than I probably would before," he tells me. "I think it's good to have that little interaction with a fan, whether it's China or Brazil or wherever it may be, for five minutes out of the day. Or if I walk down the street and somebody stops me, I'm going to say hi. Before, I don't think it was like that. I was an asshole, to put it bluntly." Social media has a more pointed value for Phelps, too. "Michael has a lot more control over his brand and the exposure he can directly generate than athletes had even four years ago," Carlisle says. "His social media footprint is enormous, and it's diversified internationally. We used to depend on his partners to activate. Now, his partners depend on him to activate for them. It's also his platform. If Michael moves to another company, or does his own thing in some way, he's doesn't have to recreate it. That's his. And that's a new phenomenon." With Boomer closing in on 1 million Instagram followers—who knows? He could land an endorsement deal of his own before long, too. "It's no joke," says Carlisle. "I get between three and five proposals a week from companies in the baby category that want to leverage Boomer's social media platform. Now how funny is that?" "Boomer might have some cool opportunities coming up," Phelps adds with a grin. "I should start putting him in all these different kinds of brands, so he's seen in every different brand. Dressing him is one of my favorite things." 'Nothing Else to Prove' Whatever else the future holds, it almost certainly won't include a second swimming comeback. The ending in Rio was just too perfect, and Phelps seems to have turned the page for good to the next phase of his life. [kickout id="3"] Asked about Tokyo 2020, he says there's not a chance. "I have nothing else to prove," he says. "I had a dream of starting with one Olympic medal, and it turned into 28. I don't know if I'll ever be able to wrap my head around that. I said to Nicole the other day, 'It's unbelievable.' And she goes, 'But it's believable.' And I was like, 'Yeah, I know, but it's still unbelievable. It's still hard to imagine.' I had a perfect career—28 for 30 in Olympic medals. You can't get much better than that." Even in retirement, you're still likely to see plenty of Phelps around the Tokyo Games. First, he is beloved in Asia. (In addition to the 2020 Summer Olympics in Tokyo, the next two Winter Olympics are also in Asia—in South Korea in 2018 and China in 2022.) Plus, as a noncompetitor, he'll be able to appear in any advertising he likes during the games—not just that from official sponsors, as stipulated by the IOC's Rule 40. These days, though, he's just as focused on family as business—in being a husband to Nicole and a father to Boomer. After all, it's the future. "I look forward to the day everything sinks in. I think 2008 finally sunk in, but other than that, I don't think much has," he says. "For us, as a family now, I'm looking forward to those moments with Boomer where I'm able to sit and talk to him, and bring up these experiences I had, and hopefully teach him as much as I can about those experiences. It will be probably be an emotional time when that comes up, when it finally hits me. But it will be fun." Check out our full stories about the 10 best ads of 2016, and the No. 1 spot of the year—Droga5's masterpiece for Under Armour starring Phelps. This story first appeared in the December 12, 2016 issue of Adweek magazine. Click here to subscribe.

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Michael Phelps, Businessman: The World's Greatest Olympian Writes His Second Act

His future as a husband, father, endorser and entrepreneur

Tim Nudd

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Tim Nudd