Tiger Woods and EA Sports Stay Friends to Stay Profitable
$1 Billion Asset
Moore's candor is refreshing. EA, based in Redwood City, California, says it's partnering with Woods the golfer, not Woods the man, and what he does off the course is none of the company's business. The logic is clear: As a golfer, Woods walks on water. The Associated Press recently named him Athlete of the Decade. He's won the most tournaments of any pro since Jack Nicklaus, and his Website says he's earned more than $100 million in prize money. Forbes last year said that his endorsements had helped him earn $1 billion, and while Woods denied that figure, there's no doubt he's made a very good living at this game.
But the golfer's days as a blue-chip corporate endorser may be over. AT&T (T) and Accenture (ACN) both dropped him after the Thanksgiving scandal hit the news. Procter & Gamble Co.'s (PG) Gillette unit, and Swiss watchmaker Tag Heuer, a unit of LVMH Moet Hennessy Louis Vuitton, had both been eager to associate with Woods before the scandal blew up; today, Woods's presence can be barely felt in their ads.
EA Needs Woods, Too
EA, though, beyond still being interested in Woods the golfer, has little choice other than to stay the course. The company's shares have slumped more than 65% over the past three years, As Bloomberg News notes, market research firm NPD Group estimates that EA's Tiger Woods PGA Tour franchise has raked in $675 million since 1998. In June, the company launched Tiger Woods PGA Tour 10 and plans to introduce its newest version this summer. Shares of EA rose on the news.
EA is not the only member of the Tiger Woods fan club. Nike Inc. (NKE), Upper Deck sports cards, Warren Buffett's Berkshire Hathaway's (BRK.A) NetJets, and TLC Vision Corp. are, so far, standing by their man. And work on a Tiger Woods-designed golf course in Dubai continues. With friends like these, Woods may not need real friends.