First, the talk was about the great potential of Tiger Woods, the golfer.
Now, with the green Masters jacket around his shoulders, people can talk about the potential of Tiger Woods, the pitchman.
And the potential is enormous.
When Woods was named Sportsman of the Year by Sports Illustrated magazine last December, the Masters champion said he had “no desire to be king of the endorsement money.”
But that was long before last weekend, before he won the first major tournament he played in as a pro, shattering records in the process and becoming the first minority player to win what is considered golf’s most prestigious trophy. The magnitude of that win is a gold mine in the making for shoe and apparel-maker Nike Inc., which signed a five-year, $40 million deal with Woods last year.
Woods, who also has a $20 million arrangement with the golf manufacturer Titleist, now is the highest-paid endorser by Nike.
“In terms of sports marketing, his impact is enormous. It’s the greatest contribution I’ve seen from this sport,” Philip Knight, Nike’s chief executive officer, said of Woods’ Masters victory.
“We’re very happy with our investment.”
Brad Cohen, a Wall Street analyst who follows the company for Sands Brothers & Co. in New York, said Woods’ victory has paid off “over and above their investment” for Nike.
Nike stock, which has been in a steady downward trend for two months, rose $1.50 Monday, closing at $56.50.
On the surface, Woods’ victory is a commercial coup for Nike.
“They have obviously picked the most visible icon in the world of golf,” said Nye Lavalle, managing director of Sports Marketing Group/Dallas. “The value to Nike is that they will benefit from increasing interest from young kids who hated golf, who found golf boring, who found it an old fogey sport.”
But, Lavalle said, this is not simply a matter of flooding the television screen with catchy ads and hoping Woods continues to dominate the game.
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“The real question is how will the golf industry create opportunities for youngsters to learn the game? How do you make it affordable for this generation?” Lavalle asked. “Will golf take advantage of this, or will they keep it an elitist sport?
“Nike definitely has a stake in how the industry responds.”
Beyond Nike, though, the possibilities for Woods appear limitless.
“Anything that (Michael) Jordan has done is fair game,” said Sean Brenner, editor of the Chicago-based Team Marketing Report.
That would include anything from cars to fast food to underwear. A credit card or airline could be in the offing, and Woods’ youth could open new doors, such as video games. He also could earn hefty appearance fees for corporate golf outings, said Bill Allard, president of Pro Serve, a sports marketing service.
The trick is whether Woods will want to start selling more of himself.
“I think he’s going to be very selective because of the upbringing he’s had,” Allard said. “He understands the need for balance and the need to continually perform on the course. But I’m sure he’ll have his pick of several blue-chip companies.”
Jordan has been an A-list advertising property since 1984, his rookie season in the NBA, and reportedly will earn $40 million this year from endorsements, which include Nike, Chevrolet, Hanes and Gatorade.
Woods’ age–21–makes him a natural draw for young people and for sponsors eager to establish early relationships with customers.
“It’s not so much that he’s black,” said Lavalle, who noted that Woods’s mother is from Thailand and his father is black. “He’s young, and all the kids can relate to him. All the other golfers are like country club boys, rich and pretty. Tiger didn’t come from a country club background. That’s what’s really done it. Nobody perceives him as a spoiled little rich kid.”
“He clearly gives Nike or Titleist that extra edge in the African-American and Asian-American communities,” Brenner said. “He appeals to kids who may never have picked up a driver before, and what he’s wearing on the course may become the next hot fashion item. Maybe before, those kids wouldn’t have shown interest because everyone else in the sport is white.”
Woods will make only a portion of his off-course income from his current contracts–estimated at more than $12 million–but his $8 million from Nike still is more than the previous benchmark for golf contracts. And Woods eventually may surpass Jordan as the king of all endorsements because Woods could be competitive for three or more decades.
“There’s never been anybody like Jordan,” Brenner said. “But Tiger has much more longevity. Look at golfers like Arnold Palmer and Jack Nicklaus. They’re still among the top-earning endorsers in sports.”