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The Olympic Games are over and so, apparently, are future major brand sponsorship deals for one Olympian – Ryan Lochte. Speedo was the first sponsor to drop Lochte, followed quickly Ralph Lauren Corp. (NYSE:RLB), Syneron Medical (:ELOSN/A) and Airweave Mattress.

All this the result on the part of Lochte and 3 teammates of a combination of immature behavior, vandalism and then lying by saying it was actually robbery at gunpoint. These personal sponsorships of athletes are a big deal.


Millions Of Endorsement Dollars Lost

Ultimately the cost to Lochte could be in the millions of dollars in current and possible future sponsorships. As Bob Williams, chief executive of Burns Entertainment & Sports Marketing told the Wall Street Journal, “Advertisers have become far less tolerant of controversial behavior of any type, and this is yet another type of controversial behavior that doesn’t reflect well on a brand.”

The group’s behavior led to the Miami Herald saying, “Thanks to Lochte and his teammates, the U.S. tops the medal count for offending hosts, committing culturally insensitive gaffes and behaving stupidly.” So much for diplomacy.

Rule 40

Personal sponsorships by companies like Ralph Lauren and others were even more critical during this year’s Olympics due to an exemption to the International Olympic Committee’s “Rule 40.”

Rule 40 imposes a blackout period around the games when, in the past at least, personal sponsors of athletes could not use images of Olympic athletes, coaches and trainers unless they were also official Olympic sponsors.

Ambush Marketing

To that end, the IOC uses analytics and data technology to seek out and punish so-called “ambush marketing” by advertisers, including personal sponsors. This is designed to protect official sponsors such as The Coca-Cola Co. (NYSE:KOC), McDonald’s Corp. (NYSE:MCDC), Visa Inc. (NYSE:VD) and others, who spend billions of dollars on advertising during the games.

This year athletes – like Lochte – were able to apply for an exemption to Rule 40 for their personal sponsors to use their likenesses in ads during the blackout period so long as they followed certain rules including avoiding showing rings, words like “victory,” “2016,” “summer” or “games.”


One Big Winner

Sportswear company, Under Armour Inc. (:UAN/A), thanks to its long-standing relationship with Michael Phelps, Andy Murray and the U.S. gymnastics team, was able to gain an exemption under Rule 40.

This means Under Armour was able to run a successful social media campaign that promoted its relationship with Olympic athletes without paying the big bucks to be an official Olympic sponsor.

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