Olympic Superagent Evan Morgenstein Gives Swimming World One of the Most Insightful Industry Interviews Ever

PHOENIX, Arizona, December 26. A week ago, Nathan Jendrick and Felipe Delgado produced a strong episode of Off the Wall on Swimming World Radio. However, Jendrick's one-on-one interview with Olympic superagent Evan Morgenstein, who owns PMG Sports, might have been lost in the shuffle.

The interview is so impactful and insightful that Swimming World is providing it some more time in the spotlight, including a full transcript of the incredible conversation.

Morgenstein goes in-depth on some controversial subjects with insight that very few people in the world possess, and Evan is one of those people. Morgenstein talks about the techsuit ban and how he believes that it hurt the sport of swimming.

Morgenstein also talks with an insider's knowledge about the pending battle to sign Olympic star Missy Franklin, and posits how Franklin's value actually might be lower at this point than it would have been if she turned pro prior to the 2012 London Games. Morgenstein also talks about how apparel companies have been concerned with putting together multiple-Olympic swimwear deals, and how this could hurt someone like Franklin on the open market.

Morgenstein then talks about SwimOutlet beginning to sign athletes, as well as how USA Swimming could fill the void caused by the techsuit ban by including revenue share deals where a percentage of any deal the national governing body signed would go towards professional swimming. Morgenstein, however, does explain that he doesn't believe an Olympic athlete union would ever work.

Morgenstein responds to a SportingNews.com article that called him the most polarizing Olympic sports figure, while he says the Ted Stevens Amateur Sports Act needs to go away. Morgenstein also compares USA Swimming running the sport of professional swimming within the U.S. tantamount to minor league or little league baseball controlling professional baseball.

Morgenstein also continues to push for revenue sharing, explaining how swimmers have nothing to stand on when they retire, unless they happened to make money on their own. Morgenstein dives deeper into the valuation of swimmers post-career, stating that people like Mark Spitz made their names during a time where the entire country paid attention to the Olympics.

Now, someone like Michael Phelps, in a celebrity-driven culture where the Olympics are battling reality TV for top television status, could earn considerably less in a post-swimming career unless he builds a lasting brand.

Morgenstein also offers a potentially scary outlook into the sport, stating that if the industry wants to continue to drive athletes out of the sort, they only need to continue to not pay them commensurate to their abilities.

To listen to the full interview, click on the Off The Wall episode on Swimming World Radio below and skip to the 41:50 mark. Or, you can read the full transcript of the impactful, insightful interview below.

(Note: This is an automated service where some typos and grammatical errors may occur.)

Nathan Jendrick: Evan. Thank you very much for joining us.

Evan Morgenstein: My pleasure Nathan.

Nathan: Evan you work with some of the biggest names in our sport of course legends like Dara Torres and Mark Spitz, but of course athletes these days and in London, we have got Cullen Jones and you worked with so many athletes that I would say the vast majority of deals that swimmers get come because of the work that you do. Now before we get into specifics can you give us just a general idea right now of how the market is for swimmers?

Evan: Oh it is terrible. I mean if you were a swimmer looking to make this a career. There could be a worse time to do it. You know unfortunately when the thieves at FINA made a decision that they were going to get rid of the techsuits. What they did was they almost bankrupted several of the swimwear companies and they have never recovered from that because they were so vested in that, but they actually hurt the sport and hurt the popularity of the sport. People love Olympics sports like swimming because of world records and although there were a couple of world records broken in London comparative to Beijing there was virtually no records broken and that is a shame. Technology changes in every other sport.

You know I noticed people don't want go back to the 1950s they love going to you know drive-in movies and you know the past is great, but the fact is when it comes to technology you can't stop, you have to keep moving forward and this isn't cheating right, you know the Lance Armstrong's of the world, this is technology and technology and shoes rackets whatever changes in every sport. Yet FINA singularly changed the sport and then once that happened the apparel companies had millions of dollars of inventory they couldn't sell.

So what happened, they stopped signing athletes because they said well unless you are the biggest of the big or we already have you on the contract. There is no reason for us to sign new athletes so, so many athletes. Even athletes with Olympic medals didn't get a power deal this time around and it is just absolutely a sham.

Nathan: And of course you were known for scoring Cullen Jones a huge deal with Nike and now they are out of the market at least when it comes to those high margin techsuits, but as far as players in the apparel game went, how much did losing Nike alone hurt swimming?

Evan: Oh it is devastating. It was devastating because of two reasons. One Nike pays some of the highest fees of any company because that is you know what Nike does. If they want somebody they will pay what they have to, and I have always had respect for that because their evaluation and on talent. It is just different than everybody else's, but number two there is no leverage. I mean so you have Speedo and Arena signing people, very few people and then you have got everybody else signing maybe 1 or 2 year max.

So that just got to the market place because you know Arena's building their brand backup in the U.S and they have had several American swimmers a number of them are mine unlike Eric Shanteau, Aaron Peirsol and have got Rebecca Soni and Janet Evans, but they don't have a ton of athletes and Speedo has made a decision that for the most part they are going to go after biggest of bigs and then there is this other monolith that is sort of looming over the apparel industry you know which is Missy Franklin.

So every apparel company will tell you that they want to see if they can set themselves up to sign Missy, but you know what is that going to take and that does affect companies even though she went to college. There aren't many people in the business of things saying she is going 4 years to college and because of that you know they are saying well maybe 2014 or 15 and how are we going to budget accordingly so she you know, they can pay her the money that she needs to sign with them.

So there is all these factors that most people don't think about that are affecting the valuation and opportunity you know the market place for them to be able to actually earn a living.

Nathan: Well you brought up Missy Franklin that were some questions I had for you pertaining to her for a little bit later, but since you mentioned her let's go ahead and talk about her first before we get into what her potential is even in the market which as you say is awful right now.

From your personal opinion how much if you had it targeted, do you think someone in your position could have netted someone like her after the kind of performance that she had in London.

Evan: Well look I have this conversation with many people which is I think she would have been worth more prior to the Olympics than post Olympics. Because the Olympic sponsors although I think she probably would have gotten and had a lot of companies interested in signing her, having her for 4 years. The reality is that the hype of a summer Olympics is more valuable than the post-Olympic payout.

I mean just look right now, if you could name 5 athletes that have signed endorsements since the end of the Olympics in swimming I would give you a buck because you can't. You can't name 5 swimmers that have scored endorsement deals since the Olympics.

Nathan: But with someone like Missy, what do you think if you have to target it all are we talking did she miss out on a million dollars 2 million, 5 million?

Evan: Oh I mean look the apparel companies. See here is the thing, the apparel companies know where they are. You know before the suits went away she would have been with a million a year, just in a swimwear deal. Since the suits went away, it is going to be some lower subset of that.

You know the other thing is people are nervous. You know long-term contracts, you know the contracts like a Katie Hoff or Ryan Lochte got, you know these deals that will go over 2 or 3 Olympic games, you know that makes companies very nervous, very nervous because anything can happen. I mean you just don't know.

Nathan: I mean seeing the interest that we saw Mark Gangloff for example ended up signing a bit of a unique deal with a company like SwimOutlet. Are you thinking that perhaps working with sales companies like that might be the new frontier or do you think that, that is like a one of spending and it isn't something that athletes can expect to be a part of in the future?

Evan: SwimOutlet is just an animal to itself and how they do business and what their focus seems to change on a regular basis of a focus on their own swimwear brand or are they focusing on building out other people's swimwear brands and so they you know looking to support swimmers are they looking to leverage a swimmer's relationship of existing swimwear companies? It is all over the place.

I don't look at SwimOutlet as a bastion for opportunity with athletes. They have done some stuff, we have never done anything with them, but you know they have done some stuff with athletes. So I would say that that is not going to fill the void. It looks like nothing is going to fill the void.

The only way that the void would be filled is if USA Swimming did like the NBA signed deals where a percentage of revenue they generate per deals goes back to athlete programs. That is how it works in NBA, a certain percentage of the rev that comes in from each sponsorship is then spent against athlete programs. But that is never going to happen because they don't have the strength to tell the sponsors what to spend money on.

Nathan: Right and you have of course been known as a huge advocate to your athletes. There has certainly been no secret about that. It has been well covered especially in the lead up to the Olympics, now something that I pulled before you and I got on the line. A SportingNews.com article from July, they told the story of you having a few adult beverages at a Hilton Bar in Dallas during a media summit and you had made some comments. It mentions about the USLC in your opinion exploitation of athletes apparently it was to some people who worked for them.

You in the same article you were also called the most polarizing figure in the Olympic business and you are quoted in that piece also as having described swimmers as indentured servants. Now this is back in July post London seeing where athletes are, has your opinion since then changed at all?

Evan: Well of course not, what has changed. Nothing has changed for the Olympic athlete. The condition of the Olympic athlete in fact I just signed 5 winter athletes and I am starting to read athlete agreements that the federation of these athletes are signing and what they are being required to do in terms of giving up marketing rights and I am absolute positive that these are all violations of the Ted Stevens Amateur Sports Act, which by the way antiquated document needs to go away.

It is unfortunate that Ted died in a plane accident in Alaska but you know unfortunately you know the people that are keeping this act alive in memory of Ted are doing the athletes no favor. So the reality is the system is broke, the analogy I make to everybody is this.

Think about any NGB. You have got the best athletes in the world so take Major League Baseball, but as part of the management of Major League Baseball the organizing group is also taking care of Little League so the analogy is that Little League Baseball is running MLB would that ever work? Of course not, but that is the way it works in the Olympic movement.

The minor leagues are running the major leagues and the major leagues are meant to feel like they somehow owe something because they take up a majority of the budgets of the governing bodies. Well unfortunately the governing bodies have sponsorships mostly because of a national team.

Now sure big sports like swimming and gymnastics you know have hundreds of thousands of kids, but when it comes right down to it you can leverage hundreds of thousands of kids in lots of ways. You sign on with an NGB because they have lead athletes and you want to associate with our success.

Nathan: Correct, now you talk about reading these agreements and giving up rights between that and what you know your professional opinion, what do you see as the limiting factors preventing swimming from going more mainstream and getting more sponsorship dollars down to the athletes? Now whether that is the NGB, FINA and NBC and broadcast the Olympics or even athletes themselves, what do you see as the biggest problem that we have from letting our athletes making money of the sport?

Evan: Well, there is no specific problem. I mean there is a limitation. NBC is in business for NBC. I mean they are clearly out there for one purpose and one purpose only to sell advertising opportunities so they don't care about the athletes. I mean look you know all these organizations are all you know the greed is rampant in the Olympic movement.

They always blame the agent. The agent is so greedy it is such bologna. The fact is the things that I am fighting for and the things that I spent my career fighting for and the things that I continue to put my company at risk to fight on behalf of the athletes for are things that I never make a dime on.

So if the athletes make $5,000 a year versus plus rate you know revenue that they make of the sport of swimming now. Well guess what, I don't make any commission on that. If the USOC triples the bonus that they pay for Olympic medals I don't make any money on that.

If there is a stipend that is generated from the billions that are made by the IOC I don't make any money on that. If there is a true split of television revenue as I have called for like in all the major sports at the level of 50 to 55% of total revenues towards the athletes, I don't make any of that.

So it is great that everybody calls me a dirty you know money grubbing bum, but when it comes right down with the things I fight for and the things I spend money on and the things that I spend money on with my attorneys I don't even make any money on. So I sleep well tonight because I know that my hands are clean in this thing. I know where the bad guys are and I don't feel like I am one of them although it is easy to point the finger at me. “Why can't you just shut up and let things happen the way they happen?”

I am just not comfortable with that. You know it is not okay with the status quo when people are basically dedicated in their lives you know to the fulfillment of their dreams and goals of wanting a gold medal and as soon as they are done the day they are done, they have no insurance, right. They have nothing. It is a pat on the back and thanks very much and we will replace you on the team.

It is insane.

Nathan: Now there has been a lot of talk of course on the Internet, you know everyone is a keyboard warrior who has an opinion about everything and some are great and some are not so great, but one that is kind of recurring is the idea of a whether it is a right term or not, a union with the best of the best get together. The athletes get together and say, “Hey, we want a fair shake at this. We are making USA Swimming of the money. We are making the USOC. We are making NBC the money. Everyone says, “Well why don't the athletes just do that?”

What are your thoughts on that on why it is not being done and would it work?

Evan: It will never work. It is a great try. I appreciate what the track athletes are doing. It is never going to work. Here is why it is never going to work.

First and foremost, you can't have a union because the athletes are independent contractors so a union for what? You can't form a union if you are not employees of somebody. You are the kind of contractors, you can form an association of some sort, but you can't form a union and therefore you know you are not protected under the laws of the country. That is the first thing.

The second thing is it is the problem of the athletes. Look I have been doing this forever and I can't tell you how many athletes that I have had conversations with about what we need to do and everybody should say no to the athlete agreements and when it comes right down to it.

Unfortunately, the saddest part of what I have ever done in this business is there are too many athletes that are cheap and they just get hurt and the other part of it which is really sad is that if you had an athlete that is willing to risk their career in swimming and say “No, I am not going to accept this, this is not okay. I think the conditions of how the assets are treated are not okay and I am going to stand shoulder to shoulder with the fencers, the archers, the table tennis players.”

Well, see what happens in the end if that was the example the reasons why they stand shoulder to shoulder and don't break lines in football is because you never know you may end up on a team with a bunch of the guys that stood on that picket line you crossed. Not a good place.

If you are in the Olympics, when are you going to ever see a tennis table player? When are you going to ever see an archer? When are you ever going to see a team handball player? So the reality is that there is no shared experience and the other thing is if you are one of the top 3 sports swimming gymnastics and track, you certainly feel like you are worth more. So they are going to divvy up the pie you want more. Well if you are – actually the dedicated same amount of time to make sure that you can play the best ping-pong in the world you are going to say “The hell with that, I am just as equal as them because my gold medal is just like theirs.”

The IOC knows it. That is why they just continue to go down the path. They go down, because they really don't feel that there is any threat to anything that they are doing.

Nathan: Right. Now I think you have already answered this but just that it hit on the head specifically we have so many great athletes in the sports, so many gold medalists obviously with a swimming being one with the lion's share of Team USA's Olympic medal count.

You have household names, lots of familiar names and then this isn't making any money, but household names. Now still because of that type of recognition when athletes retire from swimming even if this was a better economy.

Now you have athletes like Dara Torres and Rowdy Gaines, legends of the sport. They have built their brands, but for other Olympians even individual gold medalists. Even in a better economy, do you think it is even reality that these people can go from being on top of the sport to building a business in a life out of it later on?

Evan: No, very few people can actually continue to earn at the level they earned while they were competitively swimming with what they were going to earn post swimming, very few. It just doesn't work that way.

By the way that is not an Olympic issue, that is just a reality because in the world of celebrity right because if you are an athlete and a lead athlete you are a celebrity whatever level. The people that get paid most are the ones that are the most relevant to society and to corporate America. So if you lack relevancy because you are just not out there as much as you were before even in a different capacity. Your valuation is going to go down and you are going to see less company's going to work with you.

That is a natural core of things, but look if you look at a client like Mark Spitz or Bruce Jenner who have been out of their sport decades, they continue to earn 6 and sometimes 7 figures, forget about TV shows or anything like that just in terms of speaking endorsements because they actually built their brands during a time where there were 3 channels. There were 2 wire services and everybody pays attention to the Olympics.

I tell people all the time you know Michael Phelps could win 10 gold medals unfortunately half of America is watching Extreme Makeover, you know, the household edition. I mean it is just a different world that we live in. There are many, many more choices for information and what you spend your time on so it is hard to build icons.

Michael Phelps is an icon he will endure the test of time. Well, Ryan Lochte I don't know. You know there are a lot of athletes out there. Well Natalie Coughlin, I don't know, but Michael absolutely will. He is the one athlete you can guarantee that will endure beyond you know this Olympics, the next Olympics and the ones beyond that because nobody is ever going to win more medals than he has won.

Nathan: Great, now Evan, I know you have got to get going so I have one last question for you. We would love to talk that swimming could one day get to even a quarter of the publicity and revenue that one of the big 3 sports getting. I don't know whether that will ever happen that is up to certain individuals, but you. As anyone knows the bigger sport, the more that can hopefully filter to the athletes.

Now let's put you in the shoes of the, let's say you are Chuck Wielgus too. Let's say you are running USA Swimming to move the sport forward, to make everybody more money from the teams to the athletes all the way up to the NGB.

Evan: Right.

Nathan: If you were in charge, what changes would you make to move the sport forward?

Evan: Well there is only one way to do it and the unfortunate part of what needs to be done is that it is never going to happen and what needs to happen is there needs to be a true partnership. See what everybody is afraid of in the Olympic movement, and by the way I love Chuck and I think Chuck does an unbelievable job and swimming is the best run sport in the Olympics, and I still would love a million other things to be done and Chuck knows it because we have talked about it.

But if there is any way to create more value, more money. More opportunity for both the sport and the athletes you have to get rid of this silly athlete agreements, this is ridiculous. You have to have a true partnership. So if you were going to company X, Y and Z Procter & Gamble, Johnson & Johnson Coca-Cola Pepsi, whomever it is whatever the company is and you said that you had the support of majority if not all of your national team and they were going to be included in whatever deal you did.

What would the deal look like if you are asking that for $250,000 to $500,000 and you have no access to athletes whatsoever, but a deal is being delivered with literally 25 of the best athletes in the world that you are going to get social assets from, you are going to get appearances, trade shows being at the ability to utilize them online or advertising marketing TV campaign. What does that deal look like?

Have you truly reached in the sport of swimming, having to be a 2, 3, 4 million deal, I mean, and then you have got some significant cash. Now you have got deals that are going to be substantially higher and the truth is then there becomes a partnership. The problem is the reason why partnerships don't create themselves like that it is about control, control and greed.

How can I control you know the money coming in and how allocate it where I want to allocate it? That is unfortunately how that works. I mean look at deals like BMW, BMW is a great sponsor. They do a great job with certain athletes and then they offer other Olympic athletes $500 to go to appearance at a dealership.

Well that is nice except for Olympic Gold Medalists are actually accepting $500 to do appearances at dealerships. I find that just absolutely absurd. The valuation of an Olympic Gold Medal has to be more than $500. It is not BMW's fault. They are doing what they are supposed to do. I don't fault them at all. I think BMW does a phenomenal job marketing. They do great campaigns.

I just think that you know companies have to recognize that people can't sustain their careers on $500 appearances and you know I have talked to an apparel company recently, and they want to offer athletes you know bonuses on performance only and I said “Why bother?”

You know if you want to bleed an athlete to death. If you want an athlete to not perform don't give them any money. It is simple. If you want athletes to leave the sport, continue not to pay them. If you want the best athletes in the world, then pay them and pay them like they should be paid or otherwise you know what maybe London was the last Olympics we saw that many Americans at the top of the medal stand.

There are always going to be the Missy Franklins, but what do you do about all those other athletes who are making significant money? Are they going to get out and now we are going to leave you know the Olympic gold medal dreams to a lot of athletes that maybe aren't ready to perform at that level, but they can do it because they are in college or high school?

I hate to see that but if they want to get rid of the professional athlete boy they are going the right direction.

Nathan: Yeah, it is funny you mentioned the offers that offer the $500 and less for appearances. [Olympic gold medalist Megan and I] get some of those letters at my house. We make the same comments.

Evan: Right.

Nathan: Yeah, and you are right. It is because it is, this company is realizing, hey nobody else is offering anything so we offer something. Well you know what they say 100% of something is better than 100% of nothing so it is unfortunate, but Evan I know you got to run.

I just want to thank you so much for your time for your insight. It is definitely something that every swim fan at least has an idea on opinion on and I think having on the show really let's people know the straights that our professional athletes are in because there is this perception that “Oh, an Olympic Gold medalist must be a millionaire” unfortunately that is far from the truth. So Evan, again thank you so much for joining us and we wish you and your athletes absolutely the best going forward.

Evan: Thanks Nathan, great talking to you.

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