16-year-old U.S. Olympic gymnast Gabby Douglas made history on Thursday when she became the first African-American to win a gold medal during women’s gymnastics all-around event. In addition to her gold medal in the all-around event, Douglas and her Team USA teammates won the gold medal in the women’s gymnastics team event. Douglas’ success during the London Olympics not only secured her spot in the history books, but also ensured that multi-million dollar endorsement deals will be coming her way.
On July 23, 2012, Douglas signed her first endorsement deal with P&G. As part of the deal, Douglas is now featured in P&G’s “Raising an Olympian” campaign.
Prior to the Olympics, P&G signed Shawn Johnson, who retired from gymnastics before the London Olympics trials, and Jordyn Wieber, who earned a team gold medal alongside Douglas but failed to qualify for the individual all-around event due to IOC rules. In signing Douglas during the course of the London Olympics, P&G was able to become the first corporation to capitalize on Douglas’ Olympic success. Additionally, P&G was likely able to sign Douglas at a lower rate than future brands will be able to.
Industry experts expect Douglas to sign endorsement deals outside of her current deal with P&G. Dan Migala is a founding partner of Property Consuling Group, a sports marketing firm. His firm estimates that Douglas will earn $9-$10 million through endorsements over the next four years. “With Olympic athletes, especially individuals who win gold medals, brands look for connection between the athlete’s values and the brand’s values. The values companies look for are greatness, gold medal champions and hard work. Gabby has all of those,” Migala said.
Another industry expert likewise believes that Douglas’ endorsements earning potential exceeds $1 million. A.J. Maestas is the president of Navigate Research, a firm specializing in research, measurement and analysis of sponsorships in sports and entertainment. Maestas expects Douglas to pull in at least $2 million from endorsement deals. Maestas noted, “She’s been featured very favorably in NBC’s broadcasts. You add that to her gold medals and the fact that she’s young with a healthy chance of coming back [for the 2016 Olympics], and it’s a big story for brands.”
Maestas bases his evaluation of what Douglas will earn from endorsement deals upon the premium that brands are willing to pay to have Olympic athletes endorse their products. “The Olympics has the highest premium that brands are willing to pay for sponsorships. Although the games only last for a couple of weeks every four years, successful Olympic athletes can earn more than, for example, a basketball player who has a few successful weeks during a season,” Maestas said.
As for brands that may target Douglas for endorsement deals, Migala expects Douglas to be courted by brands representing consumer packaged goods. Additionally, he suggests that brands with taglines or promises that mirror Douglas’ persona or values may also reach out to her. Although brands, like P&G, signed former Team USA gymnasts who did not compete in the London Olympics or in the all-around event, Migala does not believe that the possibility that Douglas will not compete in the 2016 Olympics will limit her endorsement opportunities. “It’s a gamble on both sides. You’re buying a stock where the value changes. Advertisers will try to buy low. It’s a lot like a trade or a draft pick. You judge the decision and valuation at the time it’s made. Jordyn [Wieber]‘s people in hindsight, did her a great service and got her her maximum value, given that she did not qualify for the all-around. P&G now has to make a decision whether to go for Gabby. They could pay more for her as a result of her gold medals,” Migala explained.
Overall, Douglas will leave London with much to celebrate: A gold medal win with Team USA, re-writing history as the first African-American woman to win Olympic gold in the all-around competition, and a plethora of opportunities by which to earn endorsement dollars.
Written by Alicia Jessop.
She is the founder of RulingSports.com and the main contributing writer of BusinessofCollegeSports.com. She also is a lawyer licensed to practice law in California and Colorado (USA).