Tiger set to cash-in again
Woods’s return for the US Masters offers him a chance to begin rewriting a story dominated over the past several months by revelations about his private life and subsequent apologies to his wife and fans.
Since a late November car accident exposed his personal life, Accenture, AT&T and PepsiCo’s Gatorade brand have dumped Woods as a spokesman, costing the golfer an estimated €18.6m to €26m in annual compensation according to sponsorship research firm Navigate.
If Procter & Gamble’s Gillette or LVMH Moet Hennessy Louis Vuitton’s Tag Heuer –both of which have dropped Woods from their marketing – also stop paying the golfer, the loss could stretch to €36m, Navigate said.
Woods earned a reported €74m annually from endorsements before the scandal. A Masters win, or even a strong showing, however, would be the first step to recovery, analysts said.
“It’s a short-term loss,” Boston University advertising professor Chris Cakebread said. “Once he gets his game back he will recoup most of his losses if not exceed them.
“There’s really nobody else in that game who has the star appeal that he does.”
Many sponsors have stood by him, including athletic shoe and clothing maker Nike, videogame publisher Electronic Arts and trading card and memorabilia company Upper Deck.
While spokesmen for Woods have not addressed his lost endorsement deals or whether new agreements are in the works, the golfer told a news conference on Monday that he understood why some sponsors had dropped him and hoped to show he would be profitable for those that remain.
“Hopefully I can prove to the other companies going forward that I am a worthy investment, that I can help their company grow,” he said.
A strong showing by Woods this week and going forward, as well as a scandal-free future, should mean a relatively quick rebound, analysts said.
“It’s harder to be king of the hill, get knocked off and then get back up, than it is to climb your way up,” said Marshal Cohen, analyst at market research firm NPD Group.
“But all it’s going to take is for Tiger to play well and his value as a spokesperson for a product not only goes right back to where it was… but even may increase.”
NPD is updating a February poll that found while one-third of US consumers said their opinion of Woods had declined, most planned no change to their purchase behaviour based on the scandal. Cohen said the new results would be similar.
Cohen also said the blemished, more human Woods might even attract new types of sponsors he had not previously.
“Brands from Nike and EA Sports all the way through Accenture and AT&T clearly had to take a step back and distance themselves from Tiger,” said John Haegele, chief executive of marketing firm Van Wagner Sports and Entertainment.
“If he wins, the timeline for people putting things in the past could accelerate a little bit.”
In the short term, any new deals may be for less money and fewer years with companies whose products focus more directly on golf, analysts said.
However, a return to past dominance by Woods would surely lure blue-chip companies back over the next several years.
Certainly, the reputation of the world’s first $1billion (€747m) athlete has been stained. In the latest Davie Brown Index – used by corporate clients to determine a celebrity’s ability to influence consumers – Woods’s appeal ranked 2,398th, down from 96th before the scandal.
EA Sports is releasing the finished version of its online Tiger Woods golf game this week and still plans to roll out the next version of its Woods console videogame in June.
There also have been reports that Nike is filming a TV ad with Woods, although a company spokeswoman would not comment. In the end, analysts agreed winning cures all.
“It’s like the Yankees,” NPD’s Cohen said. “You love to hate them, but then when they win everybody loves them again.”
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