News of Tiger Woods’ endorsement deal with Rolex bodes well for his bruised brand. But if he’s going to attract more sponsors, he’s going to have to start winning again.
Momentum appears to be swinging his way again in the corporate world with reports that he’s also in negotiations with Frys Electronics for another potential deal.
Forbes reported earlier this week that even with a diminished portfolio, Woods is still the world’s most valuable sportsman with a brand worth $55 million, which is $29 million more than the next athlete, tennis star Roger Federer.
Still, business analysts see Woods’ nearly two-year winless streak as the greatest obstacle to rejuvenating a portfolio that has lost five major endorsement deals since news of his marital infidelities broke almost two years ago.
Gillette, Accenture, AT&T, Gatorade and Tag Heuer all ended deals with Woods in the wake of his sex scandal.
Analysts see Woods’ slumping play hindering his search for a new sponsor for his golf bag more than any lingering concerns about his personal life. AT&T’s logo came off Woods’ bag shortly after news of the scandal broke. Woods has been playing with his foundation’s logo on the bag.
The Rolex signing, and Fry’s interest, loom as evidence big business is willing to bet Woods will return to the winner’s circle.
“The Rolex announcement is significant in that it’s not an endemic golf sponsor he signed with, not a golf club or equipment company, but a company in position to choose an athlete from almost any sport,” said Paul Swangard, managing director of the Warsaw Sports Marketing Center at the University of Oregon. “Tiger appears to have returned to the consideration set for those kinds of companies.
“Does it mean a bunch of other brands will come knocking at his door immediately? Probably not.”
“His inability to come back and perform well limits his crossover appeal,” Swangard said. “So much of his success with brands like Gillette, with financial services companies, is really rooted in him being a world-class athlete and personality. Unfortunately for him, the news continues to center on how he’s not the player that he once was.”
Swangard points to NBA star Kobe Bryant’s strong rebound from personal scandal being tied to his continued athletic excellence.
“Kobe came out and scored 81 points in a game after the controversy, won NBA titles,” Swangard said.
Andrew Zimbalist, an economics professor at Smith College in Northampton, Mass., who specializes in sports says Woods appears to have done the work required to persuade most consumers he’s reformed his personal life, but his game still needs rehabilitation.
“It’s definitely the winning,” Zimbalist said of corporate restraint in investing in Woods again. “As long as he’s behaving himself sexually, I really believe most people are willing to forgive and forget, although you will always have those people who won’t.
“What most people loved about Tiger was that he was a spectacular golfer who did remarkable things nobody else did, who was terrifically consistent, who was uncanny in his ability to enter a field of 150 players and finish first or second just about every time. That’s why we love sports. We love seeing people pushing up against the boundaries of human capability, of transcending limits and challenging the real dilemma we all have, which is our mortality. That’s what Tiger was doing. Now, he’s an average golfer.”
Average doesn’t excite corporations looking for spokespersons, but the potential Woods will rediscover his greatness intrigues companies like Rolex.
“They’re getting in early, so to speak,” said David Carter, executive director of USC’s Sports Business Institute. “They’re betting on the come, that he will rehabilitate not just his image, but his game, and that they’re getting in at a time when they’re part of the re-ascension to the top.”
And when they’re likely getting a discount rate.
“I’m an economist,” Zimbalist said. “What we believe as economists is that commodities, goods and services, have a price responsive to supply and demand. You can sell most goods and services, but the real issue is what people will pay.
“A big issue in this is we don’t know the terms of the Rolex deal. We don’t know if Tiger is getting paid $1. We don’t know what his obligations are. For me, there’s an unanswered question in this announcement. What is his market value now? We don’t know. The Rolex deal is a positive step, but is it a major step or modest step? Without knowing what the contract is, what his promotional responsibilities are, we can’t say how much of a rebound this is, but it is a rebound.'