Blog: Tiger out of the Woods!
But are his endorsements burning bright?
Apr 22, 2019 09:00:00 AM | Article | Sandeep Goyal
The 43-year-old Tiger Woods won his fifth Masters title last Sunday by one stroke. It is his first major victory in over a decade and just his second PGA Tour victory in more than five years. NBC’s coverage of the event, for the record, drew an unprecedented 4.3 overnight rating, up 187 percent compared to last year, demonstrating that the ‘Tiger Effect’ is still strong among sports fans worldwide. It was also a phenomenal win for his sponsors. During the final-round telecast, when he made a late charge, he generated a whopping US$23.6 million in exposure for various corporate partners, according to sponsorship analytics firm Apex Marketing.
Tiger Woods turned back the clock with his fantabulous win on Sunday at the PGA Tour Championship. Woods finished at 11 under to earn this much-awaited victory, capping a years-long comeback bid that included multiple back surgeries and a series of personal setbacks, including a highly publicized DUI (driving-under-influence) in August 2017. After ranking as low as 1,199th in world golf rankings as recently as last year, Tiger started 2019 ranked 666th in the world. Woods is likely to jump to No. 13 in the world with his win. But even with his epoch-making victory, the 43-year-old golfer, some say is unlikely to match the unprecedented business success he experienced before injuries and off-course scandals derailed his career. But that only time will tell.
After being counted as one of the most marketable global stars in any field of sport at the peak of his popularity, Woods lost many (in fact most) of his sponsors after an infidelity scandal in 2008. Subsequent injuries kept Woods away from steady performances on the golf course for most of the last decade and contributed to a major championship drought that extends back to more than a decade now.
During Sunday’s final round telecast on CBS, Woods’s position amongst the leaders was however a boon to the brands he currently endorses. Nike saw US$22.5 million in exposure, according to Apex because of the white Nike Swoosh on his red t-shirt. Monster Energy (sponsor of his bag) received US$960,000 in visibility, while Bridgestone (his golf balls sponsor) saw US$134,000 of gains in unpaid publicity. Those numbers got multiplied manifolds through the past week as highlights of his winning stroke and print media images of Woods’s win got carried globally across sports and news channels, and in newspapers worldwide. The PR visibility will jump exponentially at tournaments yet to come as Woods’ personal brand gets an even larger boost in viewership and attention.
At the peak of his career, Tiger Woods was making US$110 million per year as the world’s highest paid athlete, including US$30 million from Nike, according to Forbes. Last year the magazine reported his earnings were down to US$43.3 million.
Way back in 2008, Woods’ most prominent sponsor was Nike (they started to work together in 1996). Upper Deck had signed him on since 2001. AT&T, Accenture, Gillette, Gatorade, EA Sports (remember the famous Tiger video game), Buick/GM, TLC Laser Eyes and Tag Heuer were all brands associated with Woods at his peak. Of these AT&T, Accenture, Gillette and Gatorade dropped him immediately after his infidelity scandal broke out. EA never renewed his contract and let the video game fade away. TLC went into bankruptcy. Tag Heuer too stepped back when their contract ran out in 2011. Only Nike and Upper Deck stayed with him despite all the negativity and turmoil surrounding him.
As Tiger got out of the woods on Sunday, it was a defining moment as much for Tiger as for Nike. During a decade marred by marital trouble, substance abuse, multiple surgeries and inconsistent play, Nike was the only brand that consistently stood by him. Nike signed Woods when he turned pro way back in 1996 and built its golf business around his stardom. Those academically minded must read the research paper Economic Value of Celebrity Endorsements: Tiger Wood’s Impact on Sales of Nike Golf Balls by Kevin YC Chung, Timothy P. Derdenger, Kannan Srinivasan, Journal of Marketing Science, January 2013. It is a fascinating back-track from 2000 to 2010 of Woods relationship with Nike. The researchers recount how Nike’s golf ball division reaped an additional profit of US$103 million through the acquisition of 9.9 million units in sales from Tiger Woods’ endorsement effect. Tiger Woods endorsing the brand led to a price premium of 2.5%. As a result, approximately 57% of Nike’s investment of US$181 million in the endorsement contract was recovered just in US golf ball sales.
On Sunday, Nike tweeted an image of his trademark fist pump with the message “never stop chasing your crazy dreams.” The tweet drew more than 4,000 retweets and 22,000 likes on Twitter. So many years of patience of investing and staying with The Tiger of Golf was once again starting to deliver ROI for Nike! Moments after Woods’s final putt on Sunday, Nike Inc. also released a video congratulating Woods on the feat, and highlighting his push to pass Jack Nicklaus (Woods now has 15 major titles, three shy of Jack Nicklaus’s record 18). The video used audio from a 3-year-old Woods listing his golf aspirations. “To think a 43-year-old who has experienced every high and every low, and has just won his 15th major, is chasing the same dream as a 3-year-old," the video went on to say.
Interestingly, in 2016, Nike had announced it would stop making golf clubs, balls and bags. But Nike continued its sponsorship of Woods’ apparel. The red shirt he wore on Sunday, so well recognized by fans worldwide, continued to sport the Nike brand, but over the past 3 years Woods has had to seek new ball and club partners.
Well, soon as Woods won on Sunday, Bridgestone Golf announced Woods won the event using its golf balls, averaging 304 yards off the tee. Bridgestone Golf had signed Woods to a multi-year deal to play exclusively with Bridgestone balls in December 2016. The deal with Tiger Woods itself created a huge jump in sales. The golf equipment producer sold out of a year-long supply of special Tiger Woods-branded golf balls within 10 days thanks to signing of the endorsement. The balls are still on back order. And with Woods back on a winning trajectory, Bridgestone Golf is surely headed for an all-time bonanza.
TaylorMade signed Tiger Woods to a multi-year endorsement deal for his clubs and irons in January 2017. Three months later, Woods underwent a risky spinal fusion operation to relieve years of back pain. Woods’ return to golf was highly uncertain and consequently, his ability to promote TaylorMade’s equipment was always in question. TaylorMade therefore deserves a green jacket (given to the winner at the Masters) of its own for buying into the Tiger Woods brand at a low and riding it back to the very pinnacle of American sports. The irons Woods used on Sunday to shape some of his amazing shots: the TaylorMade P7TW are already whipping up a mania of sorts. The company is offering the P7TW irons for a cool US$1,999. The P730 irons fellow TaylorMade-sponsored athlete Dustin Johnson used at the Masters (he finished tied for second place) are selling for a much lower US$1,399. Well that is the Tiger premium. And it is only going to get steeper if Woods sustains his comeback.
Woods’ comeback is a big deal for golf. Big deal means really big deal. A child prodigy, he won his first Masters in 1997 at age 21, the youngest player ever to win the tournament. He is credited with reinvigorating the sport by drawing more spectators and inspiring more kids to play than ever before. But Tiger really hadn’t played himself in four years due to a back injury. After undergoing a fourth surgery just last year, he is finally back on the green, playing like his good old self and winning.
Back home in India, Pawan Kant Munjal of Hero Motocorp was an unlikely global sponsor of Tiger Woods, that too betting against form on a fading (some would have said faded) superstar. Pawan signed up Tiger in 2014, and renewed the deal last year. He has gone on record to say, “Tiger is one of the greatest athletes in the history of sports. His persona transcends geographical, cultural and generational boundaries. We have had a mutually rewarding association with him. As Brand Hero keeps expanding its global footprint across continents, our aim is also to take Golf to newer demographics and bring innovations to the game. Tiger will continue to play a valuable role in this exciting journey.” Well, Woods’ winning ways are surely going to light up Pawan Munjal’s heart, and also validate Munjal’s instincts in betting on the resurgent superstar!
Well for now, the Green Jacket (actual colour: Brilliant Rye Green: Pantone 342) is proudly back on Tiger Woods’ shoulders. But these shoulders also carry the hopes and dreams of millions of golf aficionados around the world. More importantly these shoulders carry the faith and trust of his corporate sponsors. Some of whom stayed with him through thick-and thin; others who deserted him when he needed them most. As a Tiger Woods resurgence looks eminently possible, one would be curious to see how Woods behaves in the days to come: with those who once shed him and now may want embrace him once more; with those that supported him all through; and with those new ones who may want to latch on to the hype and the mania that only Tiger Woods can trigger.