Tiger Woods's sponsors must weigh current situation against future returns

Tiger Woods’s sponsors must weigh current situation against future returns


Accenture announced in just three paragraphs on Sunday that the company will not continue its sponsorship agreement with Tiger Woods, but the statement could have been even shorter.

In the middle of the second paragraph is a sentence that editors would call a “buried lead,” and in it lies the heart of the dilemma now facing some of the most recognizable names in corporate America.

“Given the circumstances of the last two weeks, after careful consideration and analysis, the company has determined that he is no longer the right representative for its advertising.”

Three weeks ago that statement would have been unfathomable. Tiger Woods’s public image was spotless and he seemed to embody what millions of people around the world wanted to achieve: Excellence. But multiple women have now stepped forward to say they engaged in affairs with the world’s richest athlete, and Woods himself has admitted “infidelity.” His status as a corporate pitchman is undeniably tainted.

The rest of his sponsors — including Nike, Gatorade, Gillette, AT&T, Tag Heuer and EA Sports — will now have to consider one very tough question. Is the downside of associating with Woods during this scandal offset by the potential upside of a partnership after he returns from his self-imposed “indefinite break” from golf?

The biggest unknown is AT&T. After Woods and Buick walked away from a reported $7 million deal,
AT&T’s logo appeared on his golf bag during the 2009 season. But AT&T
doesn’t use Woods in ads, and his image doesn’t appear on the company’s website, so a break would be relatively easy. This holiday season, will AT&T’s
association with Woods send holiday shoppers (especially women) to Verizon,
Sprint or T-Mobile for their cell phones? Possibly. You can bet AT&T will be
looking hard for a negative Tiger effect.

Watch maker Tag Heuer said it will continue its association with Woods.

It’s hard to imagine Nike Golf without Tiger Woods. It’s a $650 million business, and the Victory Red line of clubs was inspired by Tiger’s tradition of wearing the color on Sundays. The new Victory Red STR8-Fit Tour drivers, fairway woods and hybrids are set to be released in early 2010. Some professional players — like Paul Casey and 2009 British Open champion Stewart Cink — have already started using them. Take Tiger out of Nike Golf, and the company’s whole identity would have to be rebuilt.

Gatorade recently announced that it would discontinue Tiger Focus. The decision was announced a few days before Tiger’s car accident, however, and since then Gatorade, a division of Pepsi, has stated its support.

Gillette announced on Saturday that the company is maintaining its relationship but is planning to pull ads featuring Woods for the time being. The company seemed to be taking a wait-and-see approach: “In the midst of a difficult and unfortunate situation, we respect the action Tiger is taking to restore the trust of his family, friends and fans.

“As Tiger takes a break from the public eye, we will support his desire for privacy by limiting his role in our marketing programs.”

With tennis star Roger Federer and soccer stud Thierry Henry still available to pitch razors and shaving cream, Gillette can afford to let the dust settle.

Another version of the most popular golf video game ever made, EA Sports Tiger Woods PGA Tour, is slated to be released next summer. Much has already been invested in its development, and the company said in a recent release that it’s not planning a change. “We respect that this is a very difficult and private situation for Tiger and his family. At this time, the strategy for our Tiger Woods PGA TOUR business remains unchanged.””

That’s what we know now, but the unknowns facing Tiger’s sponsors are much harder to figure out. When (if?) he returns to golf and starts winning tournaments again, can he return his image and brand to the level of excellence they once represented?