Financial advisers may or may not agree with her plan, but for now, 16-year-old Olympic hopeful Melissa J. “Missy” Franklin is shunning corporate sponsors and turning down prize money.
“There was no financial analysis involved,” her father, Dick Franklin, said of his daughter's decision to remain eligible to swim on a college team next year by complying with NCAA rules prohibiting intercollegiate athletes from earning money from their sport.
Missy is a junior in high school, and will begin college in 2013, after the 2012 Olympics in London, where she is the favorite to win the gold medal in two events. Although the cost in lost sponsorship opportunities is hard to calculate, she has turned down $130,000 in prize money from swimming events, her parents said.
Both parents support Missy's decision, especially given the high cost of college. As an amateur under rules of the National Collegiate Athletic Association, Missy can attend the school of her choice on a full athletic scholarship, no matter what happens at the Olympics.
But “if she does well, makes the [Olympic] team and wins medals, [staying an amateur] will be a more difficult decision in the fall,” Mr. Franklin said.
Although there are no certainties in the world of professional sports, advisers who specialize in working with Olympic athletes said that the decision to pass up the cash could end up paying off when Missy finally does turn professional. Her value will skyrocket if she wins a few medals, and if so, she will be far more valuable to corporate interests as the excitement starts building prior to the 2016 Olympics in Brazil, and the decision to go pro would probably be made near the end of her sophomore year of college.
If Missy gives up her amateur status then, she won't be the first swimmer to bail out of college sports. Swimmer Amanda Beard turned pro at age 19, after her sophomore year, giving up two remaining years of NCAA eligibility and her spot on the University of Arizona's swim team.
Reader opinion on a story about Missy's decision that ran in The Wall Street Journal recently was mostly split between those who called it noble and those who thought it was foolish, but one adviser who built a business based on Olympic athletes brushed off the naysayers.
“It's easy for people to have that knee-jerk reaction,” said Evan Morgenstein, president and chief executive of PMG Sports, which represents athletes holding a combined 102 Olympic medals, including swimmers Dara Torres and Janet Evans.
“Do the math on the education: A scholarship is worth $200,000 to $400,000, depending on the school. And the reality of the $130,000 she passed up is that taxes would take much of it,” Mr. Morgenstein said.
Missy's choice could end up being a shrewd business decision.
“If she turned pro today, she could have some marketing opportunities before London, but she would be negotiating those deals before she ever achieved that success, and the value of those deals would reflect their speculative nature,” said Peter Carlisle, managing director of Olympics and action sports at Octagon.
Among Octagon's many Olympic athlete clients is 16-time medal winner Michael Phelps, who went pro at 16, the same age Missy is now.
“It may look like she is losing, but in a way she is preserving future value if she is able to perform,” Mr. Carlisle said.
Even so, her mother notes that in a single four-day competition, Missy turned down $75,000, about the same amount of money her mother earned last year as a part-time physician.
Mr. Franklin admitted that he is ambivalent about Missy's staying the course if she does well at the Olympics this summer.
“If there is a cascade of corporate offers, and if the numbers truly start to ratchet up, as parents we have to say, "We know you want to swim for college, but this money could set you up for life,'” he said.
On the other hand, “you could argue that we will create a pent-up demand for her as a brand” by waiting, said Mr. Franklin, who has years of executive experience with Fortune 500 companies.
Advisers agree that demand will grow if Missy is successful in London, but added that it is hard to evaluate whether the increase in value will make up for the deals she will have skipped between 2012 and 2015 or so, when demand would be growing for her to decide in the run-up to the 2016 Olympics in Rio de Janeiro.
“There is risk on both sides,” Mr. Carlisle said.
But he added that money isn't the only variable to keep in mind, and because Missy is doing so well, his inclination might be to say, “"If it ain't broke, don't fix it.'”
“When you do turn pro, you get an agent and support team, which can be helpful, but with that comes expectations. How that is going to affect a teenager is hard to tell,” Mr. Carlisle said.
The entire money situation will become moot if Missy meets the general expectation that she will do well beyond 2012.
Mr. Morgenstein pointed out that swimmers have longer careers than most elite athletes.
Ms. Torres, for instance, competed in five Olympics and is training for London — at 45.
“If [Missy] does well in 2012 and 2016, she has commercial appeal that will last for decades,” Mr. Carlisle said.
Ever since a visit to the Dolphin Research Center in Marathon, Fla., years ago, she has talked about someday working with the marine mammals, perhaps as a veterinarian, her mother said. Although nothing is set in stone, right now, Missy is considering a major in marine biology.
Once she turns pro, her corporate sponsors will be enthusiastic about helping her accomplish that dream, Mr. Morgenstein said.
“She could be a spokesperson for any of a number of aquatic-related nonprofits,” he said. “If she wants to work with dolphins, she can do that as a pro or not, but if she wants a voice, she needs to be a pro.”
lkuykendall@investmentnews.com
