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Everybody's talkin': Woods' time-out to hurt Tiger Inc.

Millions in endorsement deals, sponsorships in question

Posted: December 12, 2009 6:19 p.m.
Updated: December 12, 2009 6:00 p.m.
 
Everybody's talkin' about the millions of dollars in endorsement deals Tiger Woods risks losing by giving up golf for an "indefinite" period of time. Some say he'll suffer; others say he's already a billionaire, so BFD. What's your take? Leave a comment below the article. -- Ed.

MILWAUKEE -- When Tiger Woods' break from golf ends, he's unlikely to regain his crown as one of the world's most valuable pitchmen, even if he gets back to winning tournaments and convinces people he's changed.

America loves comeback stories, but his future ad opportunities are likely to be limited to sports product endorsements, significantly reducing his earnings power.

That was the meaning from Gillette's announcement on Saturday that it won't feature Woods in its ads for an unspecified period of time. It was the first major sponsor to distance itself from Woods since he announced late Friday he was taking an indefinite leave from golf to save his marriage after allegations of infidelity.

Woods' time-out and request for privacy may give sponsors the cover they need to pull their ads indefinitely and distance themselves from allegations that Woods had trysts with mutliple women.

AT&T said it was evaluating its relationship with the golfer. Representatives from Accenture won't say what its plans are regarding Woods, whom the consulting firm has used to personify its claimed attributes of integrity and high performance. But its Web site no longer displays on its home page an image of the golfer that had been there as recently as Thursday.

Companies often use athletes and celebrities in image ads not to sell products but to ride the coattails of their perceived qualities in the hope that it will rub off on them. Those kinds of ads are now likely gone forever for Woods as Tiger Inc. has self-destructed, costing him hundreds of millions in future endorsement fees.

Before the Nov. 27 car accident that exposed Woods' alleged serial infidelity, 91 percent of the opinions expressed about him on the Internet were positive, according to Zeta Interactive. As of Saturday, Woods' positive rating online had fallen to just 41 percent.

That's bad news for Accenture. The global consulting and outsourcing firm lauded its connections with Woods in a 2006 news release, saying its "Go on, be a Tiger" campaign had boosted its image significantly.

"The world associates Tiger with high performance. He embodies the relentless pursuit of perfection," James E. Murphy, Accenture's chief marketing and communications officer, was quoted as saying in that release. The company didn't return requests for comment on Saturday.

Gillette, which uses the slogan "The best a man can get," said it won't air advertisements featuring Woods or include him in public appearances. Woods was hired by Gillette in 2007 and has been in ads for Gillette Fusion Power razors with titles like "Phenom" and "Champions" with other stars including tennis great Roger Federer and footballer Thierry Henry.

"This is supporting his desire to step out of the public eye and we're going to support him by helping him to take a lower profile," said Damon Jones, a spokesman for Gillette, a unit of Cincinnati-based Procter & Gamble.

He wouldn't say when - or if - the company would resume ads with Woods. Woods hasn't been seen in a U.S. prime-time television commercial since a Gillette spot on Nov. 29, according to research firm Nielsen Co.

No companies have cut ties altogether to Woods in the weeks since his marital troubles came to light, tarnishing the image of a man who spent 13 years in the public eye carefully cultivating a good guy image. But with the 33-year-old's decision to leave golf - at least temporarily - they're now forced to consider their future with him.

"They're going to hedge, they're going to buy some time to determine whether or not the situation will turn," said Rick Burton, former chief marketing officer of the United States Olympic Committee and now a sports marketing professor at Syracuse University.

Woods' agent, Mark Steinberg, said on Friday it would be "premature and inappropriate" to talk about Woods' specific business relationships. "Each sponsor has unique considerations and ultimately the decisions they make we would fully understand and accept."

Woods' array of endorsements helped him become the first sports star to earn $1 billion, according to Forbes. Michael Jordan, Woods' closest contemporary, was a distant second at $800 million, amassed during and after an NBA career that spanned nearly 20 years. Basketball star LeBron James has made public his desire to be the next athlete to earn $1 billion. Woods' time-out could mean more room for James and other athletes to snatch up more endorsements.

Nike Inc. said late Friday it supports his decision. Gatorade, a unit of PepsiCo Inc., said previously it supports Woods and said on Saturday it has no updated comment. EA Sports has been selling Tiger Woods video golf games for a decade, and its next edition featuring him comes out in six months, giving it time to see what happens. Watch maker Tag Heuer did not return a call Saturday.

All of these companies will be commissioning research to see how much damage - if any - Woods' scandal was doing to their brands, said Jonathan Bernstein, president of Bernstein Crisis Management.

The answer to that may lie in the nature of the product being pitched.

"The ones that would stand to lose the least are sports," Bernstein said. "The connection with a watch company or a clothing company is much more tenuous and probably more subject to damage than connections to Nike."

Woods' earnings prowess also has been cut short. "The sponsors who want to sign him up may be different," said Larry L. Smith, president of the Institute for Crisis Management. "It may be somebody who wants to market only to men or only to the avid golfer. There may be fewer cross-generational or cross-demographic sponsors."

Even for Nike, which built its golf business that generates $650 million a year in revenue around Woods, the timing of the scandal couldn't be worse. "Nike Golf is Tiger Woods," said Mike Paul, president of MGP & Associates PR. "This is the time of year that they should be selling golf clubs for Christmas."

Mary Le Beau is among the golfers now reluctant to buy Nike equipment or apparel tied to Tiger. "There's so many choices that you don't have to give up any quality to go with your conscience," said the 52-year-old marketer from Green Bay, Wisconsin.

Others at risk of becoming collateral damage include: The television networks that drove up the bidding to show golf tournaments and other professional golfers who have benefited from the quadrupling of prize money since Woods joined the U.S. PGA Tour in 1996.

The U.S. PGA's contracts with TV broadcasters NBC and CBS expire in 2012, with negotiations on a new deal likely to begin during the second half of next year.

As a measure of Woods' importance to the U.S. PGA, the average television rating fell by nearly 50 percent for a host of 2008 tournaments that Woods missed while he was recovering from knee surgery, according to Nielsen Co.

Expect Americans to cheer for him when - and if - he does come back, now that he's positioned himself as less than the champion he's always been known for being.

"We always root for the underdog," Smith said. "We all think that everybody has a chance to be successful. It depends how hard somebody is willing to work and what sacrifices they're willing to make."

Woods is golf to so many people. But even without him, people won't lose their interest, said Gary Lynch, sales associate at New York Golf Center.

"Icons come and go," he said. "This is a big story because of the financial aspect involved and because he set himself up to be a saint."

___

Emily Fredrix reported from Milwaukee. AP Business Writers Michael Liedtke in San Francisco; Rachel Beck, Damian Troise, Stephen Manning and Mae Anderson in New York; Sarah Skidmore in Portland, Oregon; and Ryan Nakashima in Los Angeles contributed to this report.

Copyright 2009 The Associated Press.

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