The sex scandal surrounding golf icon Tiger Woods has put sports marketers in the rough. They face a difficult choice. If they stick with him, they risk alienating consumers put off by the lurid allegations about Woods' private life. And there's the prospect of yet more allegations after they've affirmed their support.
Dump him now, however, and you risk missing the upside of one of the potentially great comebacks in sports. What if, after Tiger's hiatus, he emerges contrite, marriage repaired, and his game better than ever? Woods, who earns more than $100 million annually in endorsements, could actually become more valuable after this mess. "It'll be a tale of redemption and forgiveness," says Marc Ganis, president of SportsCorp, a consulting firm. "I guarantee you that somebody has already written the freaking script."
Each of Woods' sponsors faces a unique set of considerations while formulating a postscandal Tiger plan. Here, TIME ranks Woods' sponsors on a scale from those most likely to break up with him to those most likely to stand by their man.
Game over. The consulting firm was the first to cut ties with Woods. "They had no choice," says Ganis. "Accenture tied their whole corporate image to Tiger Woods. To them, he represented competitiveness, the ability to judge things well and the ability to act appropriately." One out of three doesn't cut it here. Accenture's position is unique in that it sells a business service and all firm-client relationships are built on trust. As it turns out, Woods isn't as trustworthy as we might have thought. Plus, Accenture's "Be a Tiger" ad taglines were turning the company into a joke.
2. Tag Heuer
The Swiss watchmaker, a unit of Euro luxury conglomerate LVMH Moët Hennessy Louis Vuitton, has said that "in light of recent news, including that Tiger Woods has decided to take an indefinite leave from golf, over the coming weeks we will assess our options with Tiger Woods ... regarding our long-term relationship." Translation: We're waiting to see if this gets worse. Tag removed Tiger placards from stores across Australia (a big golf market), although the company insists that move was unrelated to the scandal. Tag headlines a group of companies whose association with the legend is not about golf but about creating buzz around the brand. Will any of Tag Heuer's customers refuse to buy a pricey Swiss watch because Tiger is a pitchman? Probably not. But the company's initial skittishness doesn't bode well for Woods' Tag prospects. "They've already gotten their brand equity out of Tiger Woods," says Ben Sturner, founder and CEO of the Leverage Agency, a New York Citybased sports-marketing firm. "He's not going to help them now."
Here's another brand whose public statements about Woods have been a bit ominous. "We are presently evaluating our ongoing relationship," the company said. Says Ganis: "AT&T has to be a little nervous. The company is reaching out to a broader, more Middle American demographic than some of the others." AT&T offers a commodity, phone service, and Tiger's golf bag is basically a billboard for it. This is one company that can probably afford to drop Woods from its roster.
Like phone service, razors are a commodity (and not exactly hip ones either). Plus, Gillette has a huge market share. So the company can play it either way. If Gillette holds on to Woods what, you're not going to shave because he's a bit of a hound? Alternatively, if Gillette dumps Woods and misses out on his triumphant comeback, it's doubtful that consumers will start switching razor brands (unless, perhaps, he endorses Bic out of spite). Yet Procter & Gamble, Gillette's parent company, is no fan of controversy. "P&G is known as being a traditional, conservative company," says Sturner. Plan on seeing more Roger Federer and no Tiger while he takes his hiatus from golf.
PepsiCo, Gatorade's parent, has said it will drop its Tiger Focus drink whatever the heck that was though the company insists it made that decision before the scandal. Gatorade is noncommittal about its 2010 plans. The company's "G" rebranding campaign has been a total disaster. So it can cut some losses, save some money and perhaps appease some shareholders by letting Tiger go. However, Woods reaches Gatorade's core market, the sports fans who emulate their heroes. The ones who, as the company famously framed it in the early '90s, want to "be like Mike." If Tiger rebounds, a whole new generation of fans will want to be like Tiger. Gatorade can't lose them.
6. Electronic Arts
A company like EA, a videogame maker, is in a much more precarious position, since it actually makes a Tiger-branded product. The company's Tiger Woods PGA Tour golf game, which features a virtual Woods walloping 300-yd. drives, has been a popular franchise, generating more than $110 million in sales. So if EA gives Woods the hook, it will have to totally change the face of the product. Somehow, a Phil Mickelson game just doesn't carry the same cachet. "They are not going to drop the product line," says Ganis. "They've got too much invested in it." EA has publicly supported Woods.
7. Upper Deck
On Tuesday, in its first public statement since the scandal broke, Upper Deck, a trading-card and memorabilia company, said it is standing by Woods. "Tiger and his family have our full support," said Richard McWilliam, founder and CEO of Upper Deck. "We look forward to his eventual return to the PGA Tour." Upper Deck, which has created Tiger Woods trading cards and collectibles like a Tiger Woods bobble head, has an exclusive licensing agreement with Woods. Upper Deck has no good reason to back out of the arrangement. If Woods catches fire again, the company's Woods items should fly off the shelves.
Without a doubt, the swoosh will stand by Woods. Nike has backed Woods since his 1996 professional debut and reportedly pays him $30 million per year. "I think he has been really great," Nike chairman Phil Knight told the Sports Business Journal this week. "When his career is over, you'll look back on these indiscretions as a minor blip, but the media is making a big deal out of it right now." Woods' sexcapades and subsequent absence from the Tour might not hurt Nike's $650 million golf business as much as you think. Golf accounts for less than 4% of Nike's revenues. And according to Matt Powell, an analyst at SportsOneSource, a market-research firm, Woods-branded Nike apparel is just 10% of the overall golf business. The big money is in golf clubs and golf balls, which for the most part don't carry Woods' name. "I don't expect to see any material impact on Nike," says Powell.
Besides Nike, several other Woods sponsors may escape unscathed. Sure, the ugly headlines are a p.r. disaster. But who knows if any business will be materially impacted by the Woods scandal? Bottom line: sponsors shouldn't overreact. "You can't just look at today," says Ganis. "There's just so much to this story that has yet to be written."