BackTiger Woods’ financial losses may be short-lived
Tiger Woods’ financial losses may be short-lived
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Chigao: Tiger Woods may have lost up to $35 million in sponsorship deals after his extra-marital affairs came to light, but any financial pain may be short-lived as the the world No. 1 returns to prominence on the golf course.
Woods’s return on Thursday 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 $25-35 million in (Rs111.25-155.75 crore) annual compensation, according to sponsorship research firm Navigate.
If Procter and 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 $50 million, Navigate said.
Woods earned a reported $100 million 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 firm 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 told reporters in Augusta, Georgia.
A strong showing by Woods this week and 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.
He 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, new deals may be for less money and fewer years with firms whose products focus more directly on golf, analysts said. However, a return to past dominance by Woods would surely lure blue-chip firms back over the next several years.
Certainly, the reputation of the world’s first $1 billion 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.
That puts him in the company of the likes of actor Gary Coleman and Fox News reporter and former talk show host Geraldo Rivera, compared with actor Matt Damon and late musician Frank Sinatra before the scandal.
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