Bong Hit Seen Round the World Won't Derail Mazda

The Japanese Car Giant Will Stick by Deal With Michael Phelps but Instructed the Olympic Swimmer to Apologize to His Chinese Fans

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BEIJING (AdAgeChina.com) -- Chinese seem pretty, well, relaxed about the marijuana controversy surrounding Olympic swimmer Michael Phelps, 23, which is good news for Mazda Motor Corp., which just signed a major endorsement deal for mainland China with Mr. Phelps in January 2009.

The photo of Mr. Phelps, who won a record eight gold medals at the 2008 Olympic Games in Beijing in August 2008, inhaling from a bong at a college party in South Carolina emerged during Spring Festival, as the Chinese New Year holiday is called in the mainland.
Michael Phelps
Michael Phelps
Most Chinese were on holiday when the image was published, limiting the impact of gossip around the office water cooler.

More importantly, in light of the natural and man-made disasters that have struck China over the past year--the Sichuan earthquake, the financial crisis, unrest in Tibet and just this week a major fire in downtown Beijing--"no one cares about pot or a photo of Michael Phelps smoking from a bong," said a marketing consultant in China, who asked not to be identified.

While Mazda executives with millions riding on his popularity probably do care, they have decided to stick by the American swimming sensation to relaunch the Mazda 6 in China. But the company did instruct Mr. Phelps to apologize to his Chinese fans and beg for their forgiveness in a video that is now running on online video sites in China such as Youku.com.

Details of the deal, which was orchestrated by DMG Entertainment in Beijing, were not disclosed, but the car maker agreed to pay Mr. Phelps at least $1 million to become the brand spokesperson for in the No. 1 growth market for Mazda. The car maker is based in Japan but Ford Motor Co. holds a controlling interest in the company.

The landmark agreement is believed to be the largest single sponsorship deal for a western celebrity in China to date. It was signed in early January 2009, less than a month before the photo was published in London's News of the World on January 31.

Mazda declined to comment, but an executive familiar with the deal said it "will not affect the Phelps/Mazda relationship. He will not be dropped."

The bong photo has caused considerably more attention in the U.S., where Mr. Phelps has faced a barrage of criticism. He has been suspended for three months by USA Swimming and his credibility as a role model for children has gone up in smoke, say many parents, costing him a lucrative sponsorship deal with Kellogg Co.

"We originally built the relationship with Michael, as well as the other Olympic athletes, to support our association with the U.S. Olympic team," a Kellogg spokeswoman said in a statement. "Michael's most recent behavior is not consistent with the image of Kellogg. His contract expires at the end of February and we have made a decision not to extend his contract."

Subway, which is popular with college students, has decided to stick by Mr. Phelps, but the sandwich chain is putting the first series of ads on hold, until some of the controversy blows over.

Subway said in a statement, "Like most Americans, and like Michael Phelps himself, we were disappointed in his behavior. Also like most Americans, we accept his apology. Moving forward, he remains in our plans."

Subway and Mazda may have to revisit their decision, however, if Mr. Phelps is charged in connection with his admission that he smoked marijuana at a party at the University Of South Carolina in Columbia in November 2008.

Contributing: Emily Bryson York

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