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01 December 2023

Kellogg to end Olympian Michael Phelps' contract

Marketeers valued Phelps at $50m in endorsement value until recently. (AFP)

By Staff Writer

Olympian Michael Phelps' marketing potential seems to be sinking following the reports of him consuming drugs and other banned materials by the US authorities.

Cereal makers Kellogg have decided to let the swimmer's contract expire at the end of the month, said the company's official communique sent to the international press.

"We originally built the relationship with Michael, as well as the other Olympic athletes, to support our association with the US Olympic team," a Kellogg spokeswoman said in a statement. "Michael's most recent behaviour is not consistent with the image of Kellogg. His contract expires at the end of February and we have made a decision not to extend his contract."

Phelps start at the 2008 Olympics winning record number of medals. Following his nine-time climb on the victory podium at the Beijing Olympics, marketeers valued him at $50 million (Dh183.65m) in endorsement value and the star swimmer wasted no time in cashing in on his new-found value.

However, after the recent release of him consuming drugs, his advertisers have had a contrasting response, with many cancelling, while others have put their branding plans with him on hold.

Phelps also has a lucrative deal with Subway, which has declined to comment on the matter. The chain has a campaign featuring the athlete ready for the airwaves. At this point, the work seems likely to be delayed, as was reported on AdAge.

But Phelps has come out of trouble with his branding partners in China. The company that brokered his ad deal with Mazda in China told Inside Line on Tuesday: "DMG is standing by Michael."

DMG Entertainment signed the Olympic swimming champ to the most lucrative single contract for an ad spokesman in China's history. DMG Entertainment CEO Dan Mintz told Inside Line in a statement that the bong incident "does not affect the deal."

"We do not condone what he has done, but this is not the time to turn our back on him. Ultimately it is what Michael does in the pool that counts," he added.

Mazda's response to the current situation is still not formally conveyed, and has only been communicated through the DMG. Whether Mazda will take the same relaxed attitude is still to be determined. Craig Von Essen of Mazda corporate communications in Japan told IL that Mazda China's management is "currently ensuring that they fully understand the true facts of the situation" and, along with Mazda spokespeople in the US, declined comment.

Phelps' deal pays him more than $1m to promote the Mazda 6 in TV and print media as well as in public appearances in China. He is well known in China, where he won a record eight gold medals in the pool at the Olympic Games last summer.