It’s in His Game: Why Nike and EA Have Stuck With Tiger Woods

It’s been a strange week for Tiger Woods. Just as rumors and photos of him attending rehab for sex addiction at a Mississippi clinic surfaced, one of his few remaining corporate sponsors, video game publisher Electronic Arts, demonstrated it wasn’t just sticking by Tiger, it was doubling its bet on him. On Thursday, EA Sports announced not just one new Tiger videogame, but two: the latest installment of its long-running golf game, Tiger Woods PGA Tour '11, slated for a June release on the Nintendo Wii, as well as a new online  version, marking one of its first forays into internet gaming. Even as Tiger’s marketing death spiral continues, he is still a bankable brand for the few remaining companies that have stuck  with him.

"We didn't form a relationship with Tiger so that he could act as an arm's length endorser," EA Sports president Peter Moore said earlier this month in a blog post. "Regardless of what's happening in his personal life ... Tiger Woods is still one of the greatest athletes in history."

True enough. This was actually supposed to be the year that Tiger Woods became the first athlete to earn a billion dollars. Last September, Forbes speculated that he already had. But if Tiger wasn’t a billionaire by the time he crashed his Escalade into a fire hydrant and palm tree on Nov. 27, chances are he won’t be any time soon. The world’s most bankable athlete is now corporate kryptonite. The $100 million in endorsement deals he used to rake in each year has surely plummeted.  

Gillette was first to bail. Then Gatorade canceled its line of Tiger Focus drinks. Gatorade’s parent company PepsiCo insists the move was made pre-Rachel Uchitel, because the drinks weren’t selling, which is either not true or the luckiest product-fail ever. Accenture came next, severing its ties with Tiger, whose image permeated every orifice of the consulting company. Tag Heuer dropped him on Dec. 13, “for the foreseeable future,” which was apparently just 10 days, because on Dec. 23 the Swiss watchmaker reconsidered, saying it “stands with Tiger.” Fair enough, but don’t hold your breath for the next Tag ad featuring Tiger. On Jan. 1, AT&T made its first order of business in 2010 to end its sponsorship of Woods. Then, in what almost seemed like piling on, GM asked for its free cars back, including that damaged Escalade. Ouch.

Which makes the fact that Nike and EA are his two remaining big sponsors all the more interesting. Their support shouldn’t be mistaken for charity, but rather a function of how deeply-invested they both are in Tiger. Amid the car and watch and drink companies that flocked to him in the last decade, Nike and EA were always the two big mainstream sponsors most tied to Tiger’s performance on the golf course, rather than to some extrapolated sense of excellence and luxury other brands built up. Nike didn’t say, buy this car because Tiger drives it. It said, buy this golf club because he won the Masters with it. Just as EA didn’t try to sell us the watch Tiger wears on the golf course, but rather the experience of being him on the golf course.

That commitment to the core of what makes Tiger Woods Tiger Woods, put Nike and EA in perfect position to capitalize on the success of his 14 Major PGA tournament wins, and decade-long status as the world’s best golfer. But it’s the same commitment that now has them bearing the brunt of the financial fallout. According to a Dec. 29 study by two economics professors at UC Davis, the Tiger sex scandal has erased between $5 billion and $12 billion of shareholder wealth in the companies that sponsored him. The core sports-related companies suffered the most. Both Nike and EA lost 4.3 percent of market value, according to the study. That’s nearly $250 million for EA, and a whopping $1.3 billion for Nike Golf.

But what to do if you’re EA and Nike? Extricating themselves from Tiger would be virtually impossible at this point. There was no such thing as Nike Golf when Nike signed the then-21-year-old Tiger to a $40 million endorsement deal in 1996. Nike Golf now owns a double-digit share of the lucrative golf-equipment market, generating an estimated $600 million in annual revenue. Without Tiger Woods, there would be no Nike Golf. He is the brand. So Nike’s only choice is the one it has chosen, to stand by him.

Same goes for EA and its Tiger videogame franchise. The new online version, and the console installment set for June will be the 14th and 15th iterations of the game, which now includes a version for the iPhone. Market research firm NPD estimates that since 1998, the franchise has grossed $670 million for EA. Even though you can play as him in the game, EA realized that somehow, "Jim Furyk PGA Tour" just doesn’t have the same ring to it.  

The only thing that Nike and EA can do is to keep supporting Woods in public, while privately hoping for two things: One, that the worst of the Tiger scandal is over. And two, that Tiger ends his self-imposed hiatus from golf this spring, and gets back to doing what he does best: being the best golfer the world has ever seen. The era of Tiger Woods being able to sell watches and consulting firms is most certainly over. But assuming he hasn’t lost his swing, he can still sell golf. As soon as he gets back to playing it, the safer EA and Nike’s investment in him will be. 

Join the Discussion