Dec 15, 2009
Tiger's troubles seen swiping sports sponsorship market
Dec 15, 2009
By Ben Klayman
CHICAGO (Reuters) - Tiger Woods has just made life a whole lot tougher for athletes looking to score big deals to pitch a company's products or services.
The lurid, unrelenting media coverage of the world No. 1 golfer's fall from grace over a sex scandal will hurt the multi-billion dollar sponsorship market as companies shy away from individuals whose behavior they may feel they cannot control, experts said.
"If Tiger can go off course, basically anybody can," said Marc Ganis, president of sports consulting firm Sportscorp Ltd. "There was no athlete who was viewed as safer than Tiger a month ago. This is going to have an impact."
Woods, 33, last week admitted to "infidelity" in his marriage to his Swedish wife Elin Nordegren as allegations of multiple extra-marital affairs rocked his life and career.
The golfing icon, the world's first billionaire athlete who is believed to be the wealthiest sports personality on the planet, said on Friday 11 December he would take an "indefinite break" from pro golf, sending shockwaves through the sporting world.
Talk of how Tiger's troubles will affect the sponsorship market picked up steam after Accenture Plc said on Sunday 13 December it was ending its six-year sponsorship deal with Woods.
"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," the technology outsourcing and consulting firm said in a statement.
As the world watched open-mouthed, Woods' carefully cultivated image crumbled in the short space of two weeks as a parade of up to 13 women -- from cocktail waitresses to porn stars -- came forward to say they had had flings with the married father of two. The allegations emerged after Woods was involved in a minor November 27 car accident at his Florida home.
The star golfer was estimated to earn about $100 million a year in endorsement deals before his unwelcome troubles.
Accenture's move away from Woods came a day after Procter & Gamble's Gillette said it would limit the use of Woods in its marketing. AT&T Inc has said it is evaluating its relationship with him.
Swiss watchmaker Tag Heuer, a unit of LVMH Moet Hennessy Louis Vuitton, told the U.K. Press Association it was undecided about maintaining its deal.
Some analysts said Woods' troubles could lead to greater interest in deals where companies sponsored leagues, teams and even sports stadiums instead of individuals, who pose a higher risk of scandals, bad behavior or poor play.
"BUILDINGS DON'T TEXT"
"Buildings don't get injured, they don't get in trouble and they certainly don't text racy messages to other buildings," said Rick Horrow, a sports lecturer at the Harvard Law School.
He was referring to text messages at least one of Woods' alleged mistresses said she received from the golfer.
"The $12 billion a year endorsement and spokesman industry may take a direct hit," Horrow added, saying past cases with athletes charged in high-profile scandals had already led companies toward shorter deals that were easier to terminate.
"This takes due diligence and caution to a whole new level," Horrow said.
But Sportscorp Ltd's Ganis expects Accenture to be the exception, as it had so closely tied its image to Woods.
Gillette's vaguer suspension on use of Woods is seen as the more likely model other sponsors will follow until the media storm blows over.
The main outcome Ganis expected was shorter deals, not fewer, or for less money. "The expectation is Tiger's coming back and when he comes back he's going to be bigger than ever; certainly at least the first few tournaments," he said.
Not everyone is abandoning Woods.
Nike Inc Chairman and co-founder Phil Knight said the scandal was "part of the game" in signing endorsement deals with athletes and he did not back away from the athletic shoe and clothing maker's relationship with the golfer.
Knight told Street & Smith's SportsBusiness Journal in an interview published on Monday 14 December Nike checked out Woods' background before signing its deal and "he came out clean."
"PEOPLE STILL LOVE CELEBRITY"
Companies cannot get such background checks right all the time and "there's always a risk," Knight said. However, he signaled no move to distance Woods from Nike, which has founded its global golf business on Woods' reputation and play.
"He's been really great," Knight said. "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."
Other sponsors include PepsiCo Inc's Gatorade, Electronic Arts Inc, TLC Vision Corp, Upper Deck and Berkshire Hathaway Inc's NetJets, all of which previously said they planned to stick with Woods.
A move away from sports stars toward other celebrities, including reality TV show and Hollywood stars has already occurred over the past decade, said Doug Shabelman, president of Burns Entertainment, which matches celebrities with corporate sponsors.
The scandal surrounding Woods only speeds that up, but linking with an individual is still the best way to get your message across, he added.
"People still love celebrity," Shabelman said.
(Reporting by Ben Klayman, editing by Pascal Fletcher and Jackie Frank)
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