Woods in no danger of losing sponsors
Tiger Woods isn't just the world's best golfer; he's a businessman who has leveraged prize money, appearance fees, endorsements, licensing agreements and golf course design deals into more cash than any athlete has ever generated. Woods was the PGA Tour's career earnings leader by the age of 24, and passed $1 billion in overall cumulative income earlier this year; ESPN The Magazine has estimated that he will earn more than $6 billion by the time he hangs up his putter.
And as Woods tries to repair the marital, physical and public-relations damage his first scandal has caused, one thing is clear: His corporate partners have his back.
Many observers have asked whether Woods' late-night car wreck and alleged infidelities will affect his current endorsement deals, which comprise nearly 90 percent of his annual income. The answer is: Not so far, and probably not at all. For example, Woods is in the middle of a five-year deal with Nike worth more than $100 million, and on Wednesday that company issued a statement saying: "Nike supports Tiger and his family. Our relationship remains unchanged."
Reaction was nearly identical from Gatorade, where Woods inked a five-year pact reportedly worth up to $100 million in 2008. PepsiCo, Gatorade's parent company, put out a statement that said: "Tiger and his family have our support as they work through this private matter. Our partnership continues."
Electronic Arts, Gillette, NetJets, TLC Vision -- all of them also have deals with Woods, and all also issued statements supporting him. No sponsors have dropped him. So the world of sports business is rapidly converging on one conclusion: "Over the medium- and long-term, the events of the past week will do absolutely nothing to damage Tiger's appeal to current or future sponsors," says Peter Marino, president of Dig Communications, a public-relations agency.
Why is Tiger Teflon? It's not just because his near-universal recognizability makes his endorsement so valuable. It's specifically because his core fan base is precisely the group of Americans least likely to care about the marital indiscretions of a successful guy who travels a lot: upscale men.
Woods' appeal always has been rooted in the factors that combine to make him uniquely excellent at his craft -- the story of his childhood, his competitive nature, his commitment to greatness. Being lovable has never been an essential part of that mix.
"Tiger's cuddliness quotient isn't too high," says Marc Ganis, president of SportsCorp, a sports business consulting firm. Rather, Woods resonates with golf fans who admire him and want to be like him, and most of them are middle-aged and upper-income men, or young men who aspire to be upper-income by the time they're middle-aged. Whatever they say in public or at the dinner table about how Woods has behaved, those men are not likely to turn their backs on Woods for reportedly messing around with women. And as they go, so go the companies that sell to them. "Tiger's fans are male consumers," says Marino, "and his sponsors are companies trying to reach those consumers, not married women or soccer moms."
Then there's the nature of Woods' offenses, which, beyond smashing a fire hydrant, apparently are confined to his marriage. Which makes his mistakes potential ongoing tabloid fodder for sure, but not corporate deal-breakers. "Some women, and for that matter, some concerned men, may be indignant," says Ganis. "But which of the men who work for any of Tiger's sponsors is going to be the first to stand up and throw stones? Anybody who did that would put himself and his own company under tremendous scrutiny."
Woods' behavior could limit the ultimate size of his endorsement universe, as corporations that market themselves as family-friendly might be reluctant to strike new deals with him.
"If Tiger was going to be my only face to the world, I might think he's a little bit radioactive now," says one sports media executive who asked not to be identified because he does business with some of Woods' sponsors. Then again, marital trouble might make it easier for some fans to identify with him.
"Tiger certainly has been one of the most private individuals among anybody who is well-known," says Marino, "and this may actually humanize him."
But those are arguments about how Woods will fare with casual fans and with companies loosely connected to golf. Like New York Yankees slugger Alex Rodriguez, Woods is easy to admire but hard to love -- and eminently capable of making the world refocus on his athletic greatness simply by playing up to his abilities. And when he resurfaces as a superhuman golfer, Nike will want him in Nike caps and shirts and shoes, AT&T will want the AT&T logo on his bag and Tag Heuer will want him wearing a Tag Heuer watch when he holds his trophies aloft.
"Tiger's all about maximizing value for his corporate partners as well as himself," says Ganis. "If any of his sponsors get cold feet, Tiger will say, 'Thank you,' and tear up his contract with them. And they will be the worse for it."
Peter Keating is a senior writer for ESPN The Magazine. His online archives can be found here.
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