Using a 2d Sprite under a 3d Model.

I have a model created in Blender for a character with a sprite as a child of the character that I would like to animate. I'm making a turn based strategy game in which I would like to be able to click a character and turn on a "selection circle" beneath the character, much like the way a circle appears underneath a selected unit in games like Star Craft. The selecting of the character(the circle turning on/off) works fine. However, I have a 32 sprite animation that I would like to apply to the selection circle to give it a bit more life. The steps I've take are as follows:

I put my character into the scene

I add the selection circle sprite to the character as a child

I add an animation & animator component to the selection circle

I open the animation window and create a new clip

I drag my 32 sprite sheet to the window

I make sure the "play automatically" check box is selected

When I play the animation in the editor it works fine, but at run time the animation is not present, only a single sprite appears when I select my character. I've noticed that there is warning that appears in the console that says "animation must be marked as legacy" there are about a bazillion questions on here already explaining how to fix this... I.E. Change to debug mode and change animation type to 1(Legacy). I do not see this option anywhere in the inspector when I have the sprite selected. I can change to debug mode but there is nothing under the heading or an component that resembles animation type. I'm using Unity 5. Please, any help would be appreciated.