With Mark Steinberg’s split with IMG official and with the company’s announcement of a reorganization of its golf division, the focus is now on Tiger Woods.
IMG has confirmed that Woods is free to leave with the agent who has represented him for a dozen years.
But will Woods leave with Steinberg?
“I'm committed to both, with IMG, and Mark's my agent,” Woods said Tuesday before news broke of Steinberg's departure.
If Madison Avenue laid odds, it would heavily favor Woods leaving with Steinberg. While more than one media outlet is reporting Woods will leave, Woods has yet to confirm he’ll do so.
“With most professional athletes, the relationship with their agent is typically a personal one,” says Andrew Zimbalist, an economics professor who specializes in sports at Smith College in Northampton, Mass. “It’s a matter of comfort. I don’t know Tiger Woods or what’s going on in his head, but my instinct tells me if he’s comfortable with Mark Steinberg, he’s going to stay with him. They’ve gone through wars together. If he wasn’t comfortable with him, he wouldn’t have stayed with him as long as he has.”
There’s some speculation within the industry that Steinberg could join Creative Arts Agency if he wanted and take Woods with him, but Zimbalist says industry instincts point away from that.
“My guess is that Mark Steinberg feels like he’s a big enough name that he can start his own agency,” Zimbalist said. “I think it’s reasonable speculation he is going out on his own.”
With Woods in tow, Steinberg has considerable options.
Steve Rosner, co-founder of 16W Marketing, which represents Phil Simms, Howie Long, Cal Ripken and Nick Faldo, said Steinberg’s decision likely hinged on knowing Woods would join him before he decided to leave IMG. Rosner sees Steinberg with four options:
1. Steinberg could set up his own sports representation/marketing business with Woods as his star client.
2. He could go into business with Woods, striking out on their own as partners.
3. He could join an established, smaller company where Steinberg could negotiate more freedom and power than he had at IMG and benefit from the company's established resources, or could even negotiate part ownership in the company.
4. He could join another large conglomerate.
“My guess is that at this point in his career, Tiger wants more control of his destiny,” Rosner said.
Rosner isn’t privy to the deals Steinberg negotiated for Woods with IMG, but he said IMG would continue to take a percentage of the deals inked under its umbrella through the life of those contracts, unless Steinberg negotiated specific provisions to the contrary, should Woods leave the company.
If not for the scandal that beset Woods, and now the injuries plaguing him, Steinberg might be striking out on one of the richest ventures in sports representation and marketing history.
As it is, Steinberg may be setting up his own shop with a damaged product with an uncertain future.
CNBC reported that IMG financial records showed that Woods lost between $23 million and $30 million in endorsement income last year. Woods lost Accenture, AT&T, Gatorade and Gillette as sponsors in the wake of personal woes that unfolded in Woods' life late in '09. The Associated Press and CBS Sportsline have reported that Steinberg’s been actively seeking a sponsor for Woods’ golf bag since last fall with no takers yet to his terms. Still, Woods continues to make an estimated $70 million annually in endorsements.
“I don’t think these two are going to go hungry,” said Paul Swangard, managing director of the Warsaw Sports Marketing Center at the University of Oregon, in reference to a new Steinberg/Woods venture.
Swangard said he wasn’t surprised by news of Steinberg’s departure.
“I don’t think it really had anything to do with IMG,” Swangard said. “I suspect it’s just Mark Steinberg thinking he has a better way of doing things.”
A better way to manage Woods even with their new challenges.
“While we would describe Tiger as a distressed product, he’s still a premium brand,” Swangard said. “If you were going to strike out on your own with Tiger Woods, you would be able to do some pretty good things. And being on their own, they’re going to be able to do some things they might not be able to do with IMG, possibly push the envelope as sole proprietors of a business, if they wanted, things IMG might be averse to doing, or things that might conflict with businesses that IMG has.”
Of course, Swangard said the reach of a new Steinberg/Woods business would be linked to Woods' success on the course. Woods hasn’t won a tournament in 18 months. The value and extension of current deals with Nike, EA, Upper Deck and other companies depend on Woods’ success on the course. Woods’ knee and Achilles injuries cloud the picture.
Business decisions are no small matters for athletes who resemble small corporations. Trusting a new business model for a successful professional golfer can be as daunting as trusting a new swing. There’s bound to be new demands and challenges for Woods in changing course with so many uncertainties in his game affecting his business.
While Woods is financially set for life, so much of his legacy hinges on the continued success of his brand.
As rich as Woods is, there’s still pressure to win.
As Woods thrives, so do his business partners and the charitable endeavors linked to the Tiger Woods Foundation.
“I think everyone feels he needs to win soon,” Swangard said. “The core brands maintaining associations with Tiger, led by Nike, are dependent on his ability to be a good golfer. If Tiger isn’t the player he was, there’s clear risk in that.”
Follow Randall Mell on Twitter @RandallMellGC