Nike turns its back on Tiger Woods' woods after bootie-bogey
It signed Woods to a five-year, $100 million endorsement contract in 2002 to help it break into the lucrative golf equipment market. By 2008, it had grown into nearly $725 million business, up 12% from the previous year.
Then came the news that Tiger had been teeing it up in twosomes far from his home course. Now Nike is calling a mulligan by removing Tiger's name from a new line of clubs inspired by Tiger's trademark wearing of red on Sunday.
According to the Wall Street Journal (subscription required), Nike's Victory Red STR8-FIT Tour fairway woods will not carry the Tiger endorsement. The company is already struggling to regain sales after they dropped in 2009 to $648 million, down $77 million.
Since Tiger's accident didn't occur until the end of November, his bootie-bogey can't be blamed for much of last year's decline. Any 2010 shortfall, however, will probably be blamed on him.
The golf industry is also wondering what financial impact Tiger's absence from the tour will have. When Tiger plays, television viewership doubles. Fellow pro Sergio Garcia believes he'll be back soon, although how long he'll remain at a sex addiction clinic is an unknown.
Also unknown is how long it will take for him to rehabilitate his image. Basketballer Kobe Bryant of the Los Angeles Lakers was charged in 2003 with sexual assault by a woman who was not his wife. By 2007, Bryant was back earning an estimated $16 million shilling for companies such as Nike, VitaminWater, and the NBA '07 video game.
One thing Tiger may want to keep in mind, though: Kobe's wife didn't divorce him, and the charges were dropped after an out-of-court settlement, so the damage to his reputation was short-lived. Who knows what long-term damage could have come from a messy divorce?
Even if Woods does regain some semblance of public esteem, he is unlikely to garner the kind of endorsement dollars he did before the recession. Many companies are dropping or reducing the bucks they throw at pro athletes, perhaps because so many besmirch their reputations with just plain stupid actions (I'm looking at you, Gilbert Arenas).