Marquis Athletes

March 19, 2010

Taming the Tiger

Filed under: News — marquisathletes @ 2:48 pm
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“Character” is defined as “the inherent complex of attributes that determines a persons moral and ethical actions and reactions.” In sport, this could mean the athlete who plays hard, plays fair, wins with class and loses with grace. In “real life,” this usually means the person you’d like your kids to look up to as a role model.

If you’re an athlete exhibiting character on the playing field, do I necessarily want my kids looking up to you in “real life?” Not if you’re Tiger Woods.

For years, Tiger enjoyed a squeaky clean image–not only was he the greatest golfer in the world, but he was good looking, broke down color barriers in his sport, had a beautiful wife and adorable kids, and made approximately a bajillion dollars a year in endorsements. That’s the kind of character we want our kids to look up to, and many of us adults looked up to him as well. Then November 27th happened. And some cracks appeared in the flawless fascade.

And then–well, you know the rest. The cracks kept multiplying and growing, and 21 days later, Gatorade dropped their sponsorship. The “Tiger” Gatorade was no longer–they decided to focus on their other athletes. Three days later, Accenture removed him from their website–now they just sponsor golf events and support charities. Six days later, AT&T ended their agreement with Woods–perhaps so their customers would focus on their Olympic sponsorship instead. These sponsors decided they’d already experienced enough value destruction as a result of this scandal, and decided it was in their company’s best interest to separate themselves from Tiger Woods.

Nike, on the other hand, defended Tiger, calling the scandal “part of the game.” Close your ears, kids! EA Sports stuck by him as well–but they did put a largely unknown golfer on the cover with him of “Tiger Woods PGA Tour 11.” Just in case?

Earlier this week, Tiger announced that he’d return to golf for the Masters. Nike, EA Sports and CBS are ecstatic. The President of CBS News & Sports boldly predicted Tiger’s return to golf would be the biggest media event other than the Obama inaugeration in the past 10-15 years. UBS raised estimates on Nike’s value because “demand is expected to increase worldwide.” “Tiger Woods PGA Tour 11” will be released in June. If Tiger does well at the Masters, which he probably will–he is Tiger Woods after all–Nike and EA Sports could make out very well on their gamble of sticking by Tiger.

But how long will it last? If we’re all just confusing Tiger’s athletic character (he’s just such a GREAT golfer!) with his personal character (the guy did just get out of sex addiction rehab a few weeks ago and rather than continue to work on his demons or, I don’t know, his marriage, he’s getting ready for the Masters), then will he be in the same situation a year from now? Will his sponsors once again be thinking about dropping him from his contract under a morals clause violation? Do they even care if he’s back on the cover of US Weekly? Do Nike and EA Sports have anything to lose by his indiscretions? Was the whole sordid incident merely a media boon for them and the Tiger Woods brand?

Time will tell, of course. Kobe Bryant came back from a charge of sexual assault  and went back to being an amazing basketball player. His sponsors came back. Maybe Tiger’s sponsors will, too. Preliminary research, however, points out that Tiger’s core-sports related sponsors (i.e., EA Sports, Nike & PepsiCo/Gatorade) already lost 4% of their aggregate market value after the incident. Gatorade made the decision that 4% was enough of a loss, especially in light of Tiger’s decision to take an “indefinite leave” from golf, and they ended their sponsorship. But now he’s back. Maybe he’ll win the Masters by some huge margin, smile nice for the cameras, garner enormous ratings, and sell lots of golf clubs and video games. Maybe his wife and kids will even attend. Either way, I still don’t want my kids confusing his athletic character with his personal character.

It’ll be interesting to see what his past and present sponsors decide. And it’ll be interesting to see what type of benefit AT&T receives, as an event sponsor for the Masters. Yesterday Bloomberg.com reported that analysts have already estimated AT&T’s ads grew 43% in value after Tiger’s announcement. And they didn’t even have to pay his sponsorship salary.

Danielle Marquis is a sports agent and adjunct graduate finance professor at University at Albany. Her students are currently analyzing the effects of Tiger Woods’ indiscretions on the value of his sponsors’ companies.

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