Why Under Armour athlete Michael Phelps is wearing Nike on the cover of Sports Illustrated

Michael Phelps, the most decorated Olympian of all time, has been sponsored by Under Armour (UA) since 2010. It was a huge score for the brand, which is based in Baltimore, where Phelps grew up. Having Phelps in its stable meant a fresh round of attention and buzz for Under Armour when Phelps surprised the world by returning to the Olympics.

But this week, Phelps is on the cover of Sports Illustrated, resplendent in Olympic glory, with six medals hanging on his neck, and a Nike swoosh on his pants.

Under Armour executives can’t be pleased.

Why did this happen?

The most obvious reason, and something many fans may not know, is that Nike (NKE) is an official sponsor of the U.S. Olympic Committee this year, and also, for the first time, an official “supplier” of Team USA, which means it gets exclusive uniform rights to Team USA track & field. (But not swimming or golf, which is why Phelps can wear his own MP brand swim cap when he races; the rules vary sport by sport and, to many critics, seem arbitrary and confusing.)

Nike is not an official Olympics sponsor, the highest level of sponsorship, which big consumer brands like McDonalds, Coca-Cola, Panasonic and P&G have paid in the neighborhood of $200 million for.

Under Armour, which is not an official Olympic sponsor either, is not allowed to run advertisements during the Olympics that refer to the Olympics. Instead, it wisely produced a glitzy advertisement with Phelps that it began running back in March. The ad shows Phelps training rigorously in and out of the pool, and does not mention the Olympics, but it’s clear what he’s training for.

The Under Armour ad has received a lot of praise. Having Phelps on the cover of Sports Illustrated with the two other biggest American stars of this year’s Games, swimmer Katie Ledecky and gymnast Simone Biles, is a step back for Under Armour.

As part of Rule 40, the U.S. Olympic Committee’s marketing restrictions, during the Olympics, athletes are forbidden from posting on their social media about their non-official sponsors unless they don’t overtly refer to the Olympics in the same post. (In other words, Phelps can tweet “I love Under Armour,” but he can’t tweet, “Thank you Under Armour for helping me swim well at Rio.”)

All Team USA athletes, regardless of their sport, are required to wear Nike at medal ceremonies and at official USOC events, like press conferences. Before the Sports Illustrated photoshoot, Phelps had just come from a USOC press event. In addition, the photoshoot happened inside the main press center, which is not a competition venue but likely falls under USOC rules regarding sponsors.

None of the three athletes on the cover changed clothes for the photoshoot after they arrived, Yahoo Finance has learned, and no one present asked them to. Phelps’s agent was present at the shoot.

It’s likely that Phelps thought he had to wear Nike, and not Under Armour, during the Sports Illustrated photoshoot. An Under Armour spokesperson, and Phelps’s agent, both told Bloomberg that Phelps had to wear Nike because of USOC requirements. And it’s likely that all are correct—that the same rules the USOC applies to official press conferences also apply to photoshoots at the Games.

Bloomberg, citing three anonymous sources, is reporting that they all may have been mistaken, and that Phelps didn’t have to wear Nike at the shoot—in which case, he made quite a mistake. Yahoo Finance has reached out the USOC for clarity and has not yet heard back.

Phelps has told Adweek in the past, “I don’t know another brand” apart from Under Armour, and that he has “literally never tried on a pair of Nike shoes.” That loyalty, and the fact that he was wearing Under Armour sneakers at the photoshoot, suggest that Phelps was likely wearing Nike warmup pants only because he believed he couldn’t be photographed in Under Armour. And experts suggest he was right.

If he did make a mistake, it is a reminder that the USOC’s aggressive enforcement of its sponsor rules leaves many athletes concerned about protecting their eligibility, and erring on the side of caution rather than risk a violation.

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Daniel Roberts is a writer at Yahoo Finance, covering sports business and technology. Follow him on Twitter at @readDanwrite. Sportsbook is our recurring sports business video series.

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