Michael Phelps' Sponsors Sticking With Him After Bong Photo... UPDATE: Kellogg Dropping Phelps

***UPDATE Feb 5th, 6:34 pm***

Ad Age is reporting Thursday afternoon that Olympic champion Michael Phelps is being dropped by one of his sponsors over the now infamous photo of him smoking from a bong. Initially it appeared Phelps would be fortunate enough not to lose any of his lucrative sponsorships, and he received reassurance from both Speedo and Omega on Monday. But now his luck appears to be changing:

One bong hit seen around the world and Olympian Michael Phelps is watching at least one contract go up in smoke. Kellogg will let the swimmer's contract expire at the end of the month.

"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."

Keep reading .

Read all about Michael Phelps' bong photo and the fallout .

AP , February 2nd:Two of Michael Phelps' leading sponsors expressed support for the Olympic great Monday, a day after he apologized for being photographed in a British newspaper inhaling from a marijuana pipe. Luxury Swiss watchmaker Omega termed Phelps' actions a private matter and "nonissue." Swim wear manufacturer Speedo called the 23-year-old American a "valued member of the Speedo team."

Phelps acknowledged "regrettable" behavior and "bad judgment" after the photo appeared Sunday in the tabloid News of the World.

Speedo gave Phelps a $1 million bonus for his record eight gold medals at the Beijing Olympics. Phelps joined Speedo in 2001, a year after making his Olympic debut in Sydney. He dominated the Beijing Games in the company's high-tech LZR Racer suit.

"In light of Michael Phelps' statement yesterday, Speedo would like to make it clear that it does not condone such behavior and we know that Michael truly regrets his actions," Speedo, which is based in Nottingham, said in a statement to The Associated Press.

"Michael Phelps is a valued member of the Speedo team and a great champion. We will do all that we can to support him and his family."

Omega said it was "strongly committed" to its relationship with Phelps, calling his Beijing accomplishments "among the defining sporting achievements in the history of sport."

"The current story in the press involves Michael Phelps' private life and is, as far as Omega is concerned, a nonissue," the company said.

The News of the World said the picture was taken during a November house party while Phelps was visiting the University of South Carolina. Under World Anti-Doping Agency rules, an athlete is subject to sanctions only for a positive test during competition periods.

"Michael Phelps is a great Olympic champion," the International Olympic Committee said in a statement to the AP. "He apologized for his inappropriate behavior. We have no reason to doubt his sincerity and his commitment to continue to act as a role model."