• by Barry Janoff , Columnist, June 9, 2009

To paraphrase author Charles "Two Cities" Dickens, it is the best of times and the worst of times when it comes to using athletes in sports marketing. The economy has forced many companies to scale down their sports sponsorships, including previously big spenders in the automotive and financial categories.

General Motors, for example, ended its nine-year alliance with Tiger Woods in 2008, a year before their $7 million per year contract was to expire, even as its executives were visiting Washington to ask for a bailout. And the fact that many big-name athletes have been linked to situations that have caused concern among consumers -- including Michael Vick, Michael Phelps, Alex Rodriguez, Manny Ramirez, Barry Bonds and Roger Clemens -- has put all active players under scrutiny. Kellogg chose not to renew its deal with Phelps after a photo of the Olympic swimming hero holding drug paraphernalia became public, and Vick lost all of his estimated $35 million endorsement deals after he pled guilty to charges relating to a dog fighting operation.

But this, in turn, has opened up opportunities for retired players such as Cal Ripken Jr., Michael Jordan, Dan Marino (NutriSystem) and Patrick Ewing (Snickers) to parlay their former playing days into new paydays.

"The work Cal Ripken, Ripken Baseball and the Ripken Foundation conduct on a professional and grass roots level mirrors many of the initiatives State Farm supports nationally and locally," Mark Gibson, assistant vice president of advertising at State Farm, says of the insurance company's alliance with the baseball Hall of Famer, who also has deals with Holiday Inn and Under Armour. "It's a natural fit for State Farm and we are very excited for the opportunity to work with Cal on many different levels."

Under Armour echoed those statements when it signed a five-year deal with Ripken in April. "Cal is an iconic figure who represents the very best of sports," says Steve Battista, senior vice president/brand at Under Armour.

Although not nearly as omnipresent as he was during his playing days in the NBA, Jordan continues to remain a valuable marketing tool for the likes of Hanes, Gatorade and the NBA, which regularly includes clips of him from his playing days in marketing initiatives.

Jordan, currently part-owner and head of basketball operations with the Charlotte Bobcats, also is the driving force behind Nike's Jordan Brand in commercials, personal appearances and basketball shoe design, helping to push annual sales to close to $1 billion and earning Jordan himself a Top 20 status on Forbes' recent list of 100 most powerful celebrities.

Is it safer to use retired athletes vs. current ones? "The answer is yes but not just because they are retired," says David Schwab, vice president at marketing agency Octagon, Washington, D.C., and managing director at First Call, Octagon's celebrity acquisition and activation division. "It's because a retired athlete is typically older and more mature. [In some cases], they don't have a steady income stream [so] they care more about the project."

This is not to say that Madison Avenue is down on active athletes. Woods, even without GM, still earns about $100 million a year from endorsements. LeBron James makes more than $25 million in endorsements to pace NBA players, Dale Earnhardt Jr. leads the NASCAR pack with $22 million in endorsement earnings and Peyton Manning ranks atop NFL players with some $15 million in endorsements.

Can athletes come back from critical situations to reinvent their marketing status in preparation for life after retirement? Former heavyweight champ Mike Tyson has not been able to overcome his numerous indiscretions to become a player on Madison Avenue.

Kobe Bryant earned more than $60 million a year in endorsements before he was accused of sexual assault in 2003 (which was settled out of court). He now takes in about a third of that, but has been the focus of recent marketing campaigns from Nike and Coca-Cola's Vitaminwater (alongside James in both), and will be the cover athlete of EA Sport's "NBA 2K10" videogame this fall.

Ultimately, companies need to be careful about hiring any athlete, whether active or retired. According to Schwab, "Brands still need to perform proper due diligence on any talent to make sure they align with the company's goals, objectives and morals."

Editor's note: If you'd like to contribute to this newsletter, see our editorial guidelines first and then contact Nina Lentini.