You've probably heard it by now. On Sunday night, Tiger Woods lost his first endorsement deal after consulting company Accenture announced it had terminated its deal with Woods effective immediately.
The fact that the company couldn't afford to quietly take down all those signs in the airport without making a statement said it all. The athlete who had the least risk tied to him three weeks ago was now toxic enough for Accenture to say it wants little to do with him.
Accenture's ditch was relatively easier because it involved a service instead of a product. As such, the direct revenue Woods brought to the consulting company wasn't as easily calculated as golf clubs, a video game or a sports drink.
While Accenture was the only business-to-business deal, Tiger's greatest issue involving his endorsement future is that, at this point, there aren't enough companies that can associate sales directly with his endorsement.
There's no AT&T Tiger iPhone, a Tiger Chevron diesel fuel, a Tiger Tag or a Heuer watch that's consistently on the market. There's not a Tiger specific Gillette razor or a way to figure out what type of business Tiger's NetJets ads bring in as compared to Roger Federer.
AT&T and Chevron , which have both publicly stated they are evaluating their options, can be grouped together. Their deals with Woods are tied to his foundation, an impressive organization that has raised tens of millions of dollars and has doled out a significant amount of money throughout the years. Both Chevron and AT&T have title sponsorships of Woods' golf tournaments and AT&T is on Woods' golf bag and is the title sponsor of the foundation's main event "Tiger Jam."
Both companies can certainly say that they haven't gotten what they paid for so far. Woods' injury last year kept him from playing in both the AT&T and Chevron events and, with his troubles this year, he failed to show up at the Chevron event. The foundation will likely suffer in the immediate future and hosting the "Tiger Jam" in its Las Vegas spot now seems out of the question. This all means that for AT&T and Chevron - sticking with Woods will probably require a reduction in fees.
With Gatorade and Tag Heuer, Woods is vulnerable due to the endorsement roster the two companies have amassed. Woods was protected in his Gatorade deal by the fact that there was a drink with his name and image on it. With Gatorade deciding to phase that out before the accident for next year, his value already has been significantly reduced.
Gillette doesn't have the same depth on its roster as Woods, Federer and Thierry Henry have been the faces of the brand. Gillette brilliantly crafted a statement which said to the public that it wouldn't make sense to use Tiger when he wasn't in the spotlight. It certainly will buy Tiger some time, but remember, the Gillette brand is owned by Procter & Gamble, which is more conservative than most. If Tiger stories continue to hit the front page of the New York Post, brand execs might start to get impatient.
Upper Deck hasn't commented on its deal with Tiger, and the company isn't expected to get too vocal, but that doesn't mean that business won't be impacted with Woods' absence. Thanks to an exclusive autograph deal with Tiger, the company got into the golf card business 10 years ago, but stopped in 2005. In September, Upper Deck CEO Richard McWilliam told Beckett.com that the company was hoping to bring back golf cards, with Tiger as the draw, as soon as 2010.
Without Tiger, Electronic Arts wouldn't have sold half the games they have with its golf franchise. Even with Woods out, it's hard to imagine that they won't stick with him at this point. Plus, the virtual Tiger might be the only Tiger we see play in 2010.
Nike is in a unique position as it's the only company that, as we speak, has more to lose than gain by dropping Woods. Their $650 million golf business has been the result of its partnership with Woods and even though there are other golfers in their stable, putting Anthony Kim in Tiger's current Sunday Red isn't going to grow the business. To boot, unlike other companies, Nike has experience in dealing with athlete troubles. It deftly navigated its deal with Kobe Bryant, literally signed days before the Lakers star was accused of sexual assault and kept the relationship quiet until Bryant's criminal case was dropped and civil case was settled. That being said, Nike has never seen the complexity of what they are confronted with given the twists and turns of this Tiger story.
The smallest deals are with NetJets and Lazer Eye Center. Deals like that are typically trade deals, which means that they're not really considered a part of the typical endorsement stable. If they don't want to use Woods any more, they'll likely just stop using him instead of making any sort of announcement.
History has shown that winning can turn an athlete around, but no one has come from so high and has been brought down as low as Tiger Woods has.
The question now is whether companies will choose to stick by Tiger and endure the barrage of bad publicity in an attempt to benefit from what, in the future, could possibly be a legendary comeback.
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