Gay Pro Athletes Get Backing of Nike, NHL as Sponsors Await

April 12 (Bloomberg) --By the time former Phoenix Suns executive Rick Welts’s I-am-gay announcement appeared on the front page of the May 15, 2011, New York Times, he already had revealed his secret to friends, co-workers and business associates.

Among those told before the article was published were NBA Commissioner David Stern and senior executives at Nike Inc (NKE)., the world’s largest sporting-goods company whose roster of team-sport athlete endorsers includes Kobe Bryant of the Los Angeles Lakers, Robinson Cano of the New York Yankees and Joe Flacco of the Super Bowl-champion Baltimore Ravens. Nike asked Welts to deliver a message to anyone thinking about becoming the first openly gay athlete in major U.S. team sports -- the company wants him as an endorser.

“They made it clear to me Nike would embrace it,” Welts, 60, now president of the National Basketball Association’s Golden State Warriors, said in a telephone interview. “The player who does it, they’re going to be amazed at the additional opportunities that are put on the table, not the ones that are taken off.”

According to Bob Witeck, 61, a gay-marketing strategist and corporate consultant, the first openly gay team-sport athlete -- provided he’s a recognizable name -- would earn millions in endorsements and speaking engagements from companies seeking to capture more of a U.S. lesbian, gay, bisexual and transgender adult population whose annual buying power he pegs at almost $800 billion.

Photographer: Rocky Widner/NBAE via Getty Images

Rick Welts smiles at a press conference to introduce him as the new President and Chief Operating Officer of the Golden State Warriors in Oakland on Sept. 27, 2011. Close

Rick Welts smiles at a press conference to introduce him as the new President and Chief... Read More

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Photographer: Rocky Widner/NBAE via Getty Images

Rick Welts smiles at a press conference to introduce him as the new President and Chief Operating Officer of the Golden State Warriors in Oakland on Sept. 27, 2011.

“We’ve passed the tipping point to where national advertisers are no longer afraid of the gay market,” said Mark Elderkin, chief executive officer of the Fort Lauderdale, Florida-based Gay Ad Network.

The National Hockey League isn’t backing away from the issue. Yesterday, the league aligned itself with a gay-rights organization in a partnership aimed at fighting homophobia in sports.

Themed Advertising

American (AMR) Airlines Corp., Macy’s (M) Inc., Ikea Group and Amazon.com (AMZN) Inc. are among the companies that have used gay-themed advertising. American, which has employed Witeck as a consultant for 20 years, in the mid-1990s created a gay-targeted sales group called the Rainbow Team. In 2010, American ran billboards in New York showing two men on a beach with the slogan: “Here’s to his-and-his beach towels. Proud to support the community that supports us.”

Witeck says a gay athlete endorser makes most sense for a company in the beverage, automotive, financial or technology fields. “There’s higher reward than risk right now,” he said. “The first time you do something you get most of the benefit.”

Cuban's Hypothesis

Billionaire Mark Cuban, owner of the NBA’s Dallas Mavericks, sees it that way, too. That’s why he wants gay basketball players to know that his team values inclusion.

American Airlines (AMR1) pays the Mavericks to put its name on their arena. Cuban says he’d be honored to have a gay player on his roster, noting that athletes today are too enlightened for it to create a problem in the locker room.

“And,” he wrote in an e-mail, “it would be a marketing goldmine for all involved.”

Cuban’s hypothesis may soon be tested.

Former Baltimore Ravens player Brendon Ayanbadejo, a gay-rights advocate, attended a meeting last week at National Football League headquarters during which three organizations with ties to sports and the gay community brainstormed how the league could prepare for an openly gay player.

Ayanbadejo, 36, said in a telephone interview that in his discussions with football players who are contemplating coming out, the subject of a joint announcement has been discussed.

“It’s not concrete that it’ll happen,” said Ayanbadejo, who was released by the Ravens on April 3 and is pursuing a Master of Business Administration degree at George Washington University in Washington. “My cause is to be an ally and make the environment ready so that if it does there’s a safe haven.”

NFL Combine

Ayanbadejo said “there’s a lot of work to do” in the NFL. The league last month was told by New York Attorney General Eric Schneiderman that it must take steps to ensure teams don’t discriminate against players based on sexual orientation. The directive came after three players who attended the scouting combine said they were asked questions on whether they had girlfriends or were married. The NFL investigated and said it found no specific violations.

Ayanbadejo and Minnesota Vikings punter Chris Kluwe on April 4 received the Parents, Families & Friends of Lesbians and Gays Straight for Equality in Sports Award.

Drew Tagliabue, executive director of PFLAG’s New York City chapter, said in a telephone interview that businesses like Nike are wise to seek diversity advertising.

“The companies are marketing to America,” said Tagliabue, whose father, Paul, is a former commissioner of the NFL. “It’s a dollars issue.”

Navratilova's Losses

Today’s athletes have opportunities that weren’t available to openly gay tennis players Billie Jean King and Martina Navratilova, 56, a fitness ambassador for the American Association of Retired Persons who has said being out cost her about $10 million in endorsements. Navratilova couldn’t be reached to comment through her marketing representative.

Nike Chairman Phil Knight said the sponsorship of a gay athlete would not be an issue.

“If it was the right athlete at the right time,” Knight said in an interview yesterday while walking with Tiger Woods’s mother along the 17th fairway of Augusta National Golf Club during the first round of the Masters Tournament. “That’s what the game has always been about for us. It doesn’t matter if the athlete is gay or not.”

Make no mistake, said former NBA player John Amaechi, who retired in 2003 and four years later announced he was gay, teams and leagues are embracing diversity because it’s good for business.

Business Angle

“Teams are not interested in diversity as a warm and fuzzy concept,” he said. “It’s about winning. The business angle is the important angle.”

High school, college and professional sports, from the locker room to the field of play to the owner’s suite, historically haven’t embraced diversity, said the 42-year-old Amaechi, who works as a consultant and whose clients include investment banks and universities.

Former NBA player Tim Hardaway responded to Amaechi’s coming out by telling a radio host he hated gay people and didn’t want one as a teammate. Hardaway apologized.

Gay Slurs

The day after Welts told Stern about his sexual orientation, the Lakers’ Bryant used a gay slur while lambasting a referee during a nationally televised game. He was fined $100,000. A month later, Joakim Noah of the Chicago Bulls directed a gay slur at a fan. He was fined $50,000. Bryant and Noah apologized, and NBA players then appeared in anti-homophobia public service announcements. Bryant earlier this year scolded one of his Twitter followers for using a gay slur.

Amaechi said he didn’t come out while playing “because I would have lost my job.”

Rutgers University basketball coach Mike Rice did lose his job after ESPN aired a video that showed him physically and verbally attacking players at practices while using gay slurs. Rice’s initial punishment was a suspension and $50,000 fine levied by Athletic Director Tim Pernetti, who has since resigned.

“Sports are a rough-and-tumble space,” said Witeck, the marketing strategist. “Boys on fields and courts will do and say a lot of things. But that window is shutting quickly.”

A majority of U.S. senators now say they back the right of gays and lesbians to marry, including three Democrats who about a week ago reversed their earlier opposition.

Momentum Building

Advocates said momentum has been building since President Barack Obama and the Democratic Party platform backed same-sex marriage, as did voters in Maine, Maryland and Washington in November. A March poll by Hamden, Connecticut-based Quinnipiac University (78104MF) showed U.S. voters backing same-sex marriage, 47 percent to 43 percent, a reversal from its July 2008 survey in which 55 percent were opposed and 36 percent were in favor.

The U.S. Supreme Court last month heard challenges to a California referendum that outlawed same-sex marriage and to the federal Defense of Marriage Act, which prevents the federal government from providing benefits to married couples of the same sex. A ruling is likely by June.

Super Bowl

Gay rights became a storyline during Super Bowl week when Ayanbadejo used the platform to call for marriage equality. San Francisco 49ers cornerback Chris Culliver, meantime, during a radio interview before the most-watched U.S. sporting event said gay players wouldn’t be welcome in the locker room. He apologized the next day. “The derogatory comments I made were a reflection of thoughts in my head, but they are not how I feel,” he said. “It has taken me seeing them in print to realize that they are hurtful and ugly.”

The NHL’s partnership with the Denver-based You Can Play Project includes training and education for teams, players, media and fans, said Patrick Burke, the organization’s founder and son of former NHL executive Brian Burke. He started the organization in 2012 after his younger brother, Brendan, who was gay, died in a car crash.

Team Acceptance

“All of the major sports are at a point where a player would be accepted by his team and management as long as he’s a contributing player,” Patrick Burke said in a telephone interview. “Now it’s just a matter of time.”

He declined to comment on the endorsement opportunities.

“The financial benefits do exist, but only if the player wants to do that,” he said.

There won’t be any shortage of opportunities for the gay athlete that wants to cash in by coming out, said Bob Dorfman, executive director at San Francisco-based Baker Street Advertising.

“The first openly gay athlete could do quite well,” Dorfman wrote in an e-mail. “I can’t see a company putting their whole endorsement budget into one gay athlete, but as part of a stable of athlete endorsers, the first openly gay one would be a welcome and profitable addition.”

Ayanbadejo, like Welts, the gay sports executive, has heard from companies seeking to align themselves with the first openly gay player. People have pitched books, documentaries and movie scripts, he said.

“There’s going to be a monetary gain by a lot of people,” he said. “Hopefully it’s the players who come out.”

To contact the reporter on this story: Scott Soshnick in New York at ssoshnick@bloomberg.net

To contact the editor responsible for this story: Michael Sillup at msillup@bloomberg.net

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