What Tiger Inc. needs to do to save a $100 million-a-year empire
It will be a tough act, maybe tougher than winning all those golf tournaments. But Tiger Woods is a big business that used to generate $100 million a year and gave him a $1 billion net worth, as I posted. That's a very good living. Unfortunately, the money will stop rolling in unless Tiger puts the rumors of extramarital activity behind him.
The reason is simple: Companies pay endorsements because they want to be associated with a winner. That reputation makes it easier to convince people to buy their products. And naturally, when that winner turns into a loser, the companies want to run away from the loser as fast as they can.
Sponsors aren't suggesting that Woods has lost his skill as a golfer. It's just that Tiger's Clintonesque bimbo eruptions aren't going over so well with those sponsors' target demographics. That may help explain why the last ad featuring Tiger went off the air on Nov. 29, and Gatorade has stopped selling Gatorade Tiger Focus sports drink.
This trickle of leaks in Tiger's money pipeline could quickly turn into a torrent. So the question he faces is what he ought to do to keep that from happening. So far, it looks like he wants to go into a cocoon and hibernate until the story passes. But the media has too much at stake -- particularly given how much public interest there seems to be in this topic.
So, Tiger needs to take control of this story. For example, Mike Paul, the president and senior counselor at MGP & Associates, a public relations firm in New York, suggests to the The New York Times that Tiger should have gone on Oprah to admit what he did within a day or two of the news coming out.
Can't Go Back Now
Every day that goes by when Tiger says nothing is a day that the public's appetite for contrition gets filled with mockery from TV comedians. And that's not good for the companies that sponsor him.
Tiger is probably mourning the loss of his life before those bimbo stories started last month, but there's no way he can turn back the clock now. So he needs to do a media tour with his wife. He ought to admit to what he did, ask for forgiveness and commit himself to his family and his golf game.
Sure it'll be uncomfortable -- but there's a $100 million-a-year pot of gold for him if he can keep that rainbow of endorsements going.
Peter Cohan is a management consultant, Babson professor and author of nine books, includingCapital Rising (due in June 2010). Follow him on Twitter. He has no financial interest in the securities mentioned.
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