Will this weekend be the most important in the history of sports? Who knows, but it's the weekend that Tiger Woods returns to professional golf at the game's most storied and telegenic tournament, the Masters. No pro athlete has ever been ensnared in a scandal as dramatic and humiliating, and no pro athlete's comeback has even been as hotly anticipated.
Woods will confront two major questions as he walks the immaculately groomed fairways of Augusta National in Georgia: Can he still compete at the highest level? And will he be the endorsement bonanza he was before he wrecked his Cadillac last Thanksgiving and saw his monumental sex addiction become endless fodder for the ultrasonic, telephoto metabolism of the tabloid Web?
The first is a no-brainer: He's Tiger Woods, he'll win again, and he'll win again often. But the second question is more troubling, because it forces us to take a hard look at whether Woods' value as a corporate pitchman ever added up to the $100 million it was estimated he made every year as the face of Nike Golf (NKE), AT&T (T) Accenture (ACN), EA Sports (ERTS), General Motors, Gatorade, Gillette, Tag Heuer and others.
Woods has almost never failed to deliver on the course. His record speaks for itself, and as Jonathan Mahler explored in a recent story in the New York Times Magazine, his playing has elevated pro golf and, more directly, the PGA Tour in its financial fortunes. Prior to the scandal, there were times when it seemed as if the Golf Channel had become the CNBC of the links, based mainly on the Tiger effect. As PGA veteran Tim Herron insisted during a post-round interview when I covered the 2004 U.S. Open, his life as a golf pro had been made immeasurably better by Woods because Tiger had brought so much more money into the game. He did an outstanding job of selling golf, even as he jousted with the PGA Tour.
But on the second question, it's clear that he was never worth the vast sums he was paid to endorse cars, razors, and sports drinks. His experiences with pre-bankruptcy General Motors and Gatorade, a brand owned by PepsiCo (PEP), are cases in point. General Motors signed up Woods in 1999 and attempted to use him to refresh the brand image of Buick, its stodgy near-luxury brand. At the time, Buick was the title sponsor for four PGA Tour events. Over the next eight years, Woods probably earned around $7.5 million a year to carry the Buick logo on his bag and appear in Buick ads in various media.
But almost as soon as Woods began working for Buick, the brand's sales plummeted. In the early 1990s, Buick sold more than half a million cars. By 2007, it had dropped to less than 200,000"”despite Woods making Buick television commercials and showing up in countless print ads and at numerous events organized by GM. Some of this precipitous decline was due to the Buick product mix and to GM's ongoing loss of market share as it endured a never-ending assault from Toyota (TM). But the company also struggled to translate Woods' bold, aggressive competitive style meaningfully into marketing angles for a division that had become widely perceived as building AARP-mobiles.
By the time it ended it deal with Woods in 2008, GM had thrown more than $80 million down a hole. Or, more accurately, into Woods' bank account. On balance, however, this was less than the $100-million, five-year contract he signed with Gatorade in 2007 to develop "Tiger Focus," a sports drink from the definitive sports-drink brand that ... was aimed at golfers? Golf is the only major sport that people routinely play while drinking beer. Gatorade perhaps believed that Woods was the most marquee jock it could find to construct a new product around. But it shouldn't have surprised anyone that even before the sex scandal, Tiger Focus was a complete bust. Woods' cavalcade of mistresses simply provided PepsiCo with cover to escape an atrocious deal.
The only companies that have truly benefited from relationships with Woods' are Nike and Accenture. The latter, once the consulting arm of Arthur Andersen, a firm laid low by its involvement with Enron, leveraged Woods' steely approach to competitive challenges but also his conservative, trustworthy image to reinstill client confidence. When the Woods scandal broke in 2009, Accenture was the first to dump him.
Nike is a different story. CEO Phil Knight built a golf brand from nothing on Tiger's back: from zero in 1996, when it first signed Woods to a $40-million deal, to $600 million in annual sales by 2007. Nike never wavered in its support of Woods during the scandal, and, pointedly, when he finally broke cover and was seen hitting golf balls again at Augusta earlier this week, Nike had replaced AT&T on his bag (AT&T dropped Woods soon after Accenture). But while Nike has, for example, been able to carve out a chunk of the lucrative golf ball market with Woods on the team, the chunk still only amounts to about 10 percent; Fortune Brands' (FO) Titleist/Acushnet still rules that realm with more than half the market. Fortune Brands also dominates the glove and shoe markets with its FootJoy brand.
So while there would be no Nike Golf without Woods, it hard to imagine that Nike Golf will survive very long without him. Luckily for Nike, he's unlikely to retire for at least a few decades. But after almost 15 years of trying to sell golf equipment, Woods has proven that he really can't do it very well. And while Woods has been golf's No. 1 player for years now, Nike remains a second-tier brand, languishing beneath the sports' three big names: Titleist, Callaway, and TaylorMade.
The problem is much bigger than a Thanksgiving SUV wreck; cracks have long been evident in the kind of monolithic marketing that was Woods' and his management's specialty. The Tiger scandal actually occurred at a critical moment for the whole idea of the globally famous celebrity jock as corporate pitchman. The financial crisis demonstrated that banks and brokerages were not, in fact, the sober bastions of trust they had pitched themselves as "¦ in TV commercials during golf tournaments. And the highly fragmented nature of modern marketing was making the idea of paying millions to be associated with the presumed allure of a single sport personality seem foolhardy. Pennzoil could tap into Arnold Palmer's bootstrapping background and easily admired manner.
But in Tiger's era, Facebook and Twitter were beginning to define marketing as driven much less by brands and more by intricate relationships with products. Woods, as the scandal demonstrated, was distant and secretive, obsessively devoted to his privacy, for good reason. His on-course feats could be associated with only one story: the brand as something heroically Tiger-esque. Meanwhile, the Web was making it possible to have thousand of simultaneous conversations not just about Woods' infidelity but about whether the companies his represented sold good or bad stuff.
Few observers doubt that Woods will rehabilitate his game. But whether he can transition from being a massively overpaid representative of companies that relied on their brand identity above all else isn't hard to predict. He can't. No one can. "I hope I can prove I'm a worthy investment," he said on Monday at his Masters press conference, when asked whether he felt that he could become a dominant corporate pitchman again. He'll need to prove that he's a lot more than just that.
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