Life After Phelps: USA Swimming's Plan To Stay On Top

The United States’ Olympic swim team enters the 2016 Summer Games on Friday in Rio de Janeiro, Brazil anchored by Michael Phelps, the most decorated Olympian in history, and a strong supporting cast of well-known stars. But USA Swimming’s marketing team is already preparing for the future, when the aging Phelps and teammates like Ryan Lochte aren’t there to spearhead its promotional efforts.

With speculation abound that Phelps, 31, will soon retire from competition, USA Swimming is focused on promoting its next generation of stars, including four-time gold medalist Missy Franklin, 21, and 19-year-old phenom Katie Ledecky. The executives tasked with swimming’s long-term growth as a sport are counting on the Rio games to drive youth participation for years to come.

“If you look at the last 10-plus years of the sport, it has really been the golden era of the most marketable athletes in the history of the sport – Michael Phelps, Missy Franklin, Ryan Lochte, Katie Ledecky,” USA Swimming Chief Marketing Officer Matt Farrell told FOXBusiness.com. “It’s hard to look at an era of swimming that has been as strong and as deep and as successful as over the last several Olympic games in a row, so that has historically given us a nice boost in participation, a nice boost in membership.”

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The sport’s “golden era” has had a discernible effect on its financial fortunes. Driven by an increase in income corporate sponsorships, USA Swimming’s proposed budget for 2016 called for about $40.7 million in revenue against about $38.5 million in expenses – an increase from 2015, when revenue topped out at $34 million. Participation among high school students has grown steadily, from about 289,000 swimmers in 2008-09 to 304,000 swimmers in 2014-15, according to the National Federation of State High School Associations.

But like most sports that lack major media coverage, swimming is largely dependent on its biggest stars, as well as the Olympics’ global exposure and massive audience, to attract new participants. Farrell said USA Swimming saw a 7% increase in its membership after the 2004 Summer Olympics, an 11% bump after the 2008 games and a 13% boost after the 2012 Olympics in London. In non-Olympic years, growth typically tops out in the low single digits.

While established adult swimmers like Phelps and Franklin are the sport’s most recognizable figures, Farrell said the majority of USA Swimming’s active membership skews younger. Among the 2,800 swim teams that compose the organization’s membership, the average participant is 12 years old.

That makes marketing campaigns designed specifically for children and young teens – and their parents – crucial to USA Swimming’s long-term success. Farrell and his team have focused on partnerships and advertisements tailored to that audience.

Last month, USA Swimming teamed up with Disney Pixar (NYSE:DIS) for a campaign tied to the release of “Finding Dory,” the animation company’s ocean-themed movie juggernaut. The collaboration encouraged consumers to “just keep swimming” and to “find a swim team.”

In a separate campaign, USA Swimming released a commercial

“Something with Disney and ‘Finding Dory’ in particular is just right in the sweet spot of who our members are and the most avid swimming families across the country,” Farrell said. “So that’s what made that somewhat of an easy decision and an easy path for us to take – it just happened to be an Olympic year to give another boost.”

Farrell said the organization also attempts to collect a diverse array of corporate sponsors to maximize its public imprint. Rather than having a single exclusive sponsor, USA Swimming has sponsorship deals with Arena, Speedo and Tyr, among others.

USA Swimming’s biggest challenge is to find a way to fill the marketing void it will inevitably encounter when Phelps and the other athletes driving the sport’s “golden era” decide to retire – especially in non-Olympic years.

To meet that challenge, USA Swimming is exploring new opportunities, in social media and other burgeoning venues, in a bid to become less reliant on the mainstream media networks and the “Olympic bump.”

“Katie Ledecky and a Michael Phelps are once-in-a-generation type athletes,” Farrell said. “I think it’s going to make marketing the Olympic sport and swimming as a part of that, harder the next decade than it was the past decade. And that’s why the family appeal is so important, so that we’re not entirely dependent on that Olympic bump.”