by Candi Sparks
Good news travels fast. Bad news travels even faster and seems to hang in our collective consciousness longer. The Tiger Woods sex scandal that began unraveling in November, 2009 may hang around for some time, with far reaching financial implications for his family, friends, business associates and the world of golf. In addition to a tarnished reputation, Tigers’ cumulative financial losses may stick around a long time.
To understand the effects of the scandal in financial terms, lost revenue affects business partners, sponsors and broadcasters which to date are estimated at 48.8 million, and that is not counting his own personal loss of income as his ranking slips and endorsements wane. With his own piece of the pie diminishing, Tiger also made a settlement payment to his now ex-wife and will provide ongoing support payments for his children.
The public was fascinated with Woods even before his life began to unravel. According to Brand and Engagement Executive Robert Passikoff “Woods is one of the few human brands.” Unfortunately his human behavior also led to his downfall. Regrettably, the Woods’ scandal also occurred during an economic downturn. Although revenues may have dropped during this period without the scandal going public, Woods is receiving negative press for these losses. Although some of these areas are attributable to Tiger, his personal life has become a convenient game of “pin the tail on the donkey” by blaming every loss on Tiger.
After reviewing internal documents, a confidential source at CNBC reported that Woods’ management company, IMG, lost $4.6 million in commissions on Tigers’ endorsement deals. The $4.6 million loss on Tiger’s endorsements would mean that the golfer himself lost in between $23 million and $30 million in deals last year.
According to Kantar Media, golf programming is down $7.2 million from the same period in 2009. Analyst Dereck Baine anticipates that based on Woods’ trouble revenues from golf on cable alone could be down as much as 20% this year from the $140 million. Although advertisers ING, Mercedes-Benz, Northwestern Mutual, RBC and Viagra are sticking with Woods thus far, last year his departure from the game from November until April of this year reportedly cost $35 million in lost revenue sponsors. Canceled title sponsors include Verizon as the title sponsor of the Masters in Hilton Head, S.C. and UBS for sponsorship of the Players Championship. Accenture, AT&T and Gatorade also got cold feet. However, the impact of these changes might not be felt for some time. Hopefully we have all learned a lesson from Tiger. The value of a good name is priceless.
Candi Sparks is the author of the “Can I Have Some Money?” books series.
