How Will Accident Affect Tiger Woods' Blue-Chip Endorsements?

Ensuing Media Storm Could Hurt Deals With Brands Like Gillette, Nike and AT&T

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NEW YORK (AdAge.com) -- Could Tiger Woods be looking at a $100 million fender-bender?

Tiger Woods has endorsement deals with Nike, Gillette and AT&T, among others that total $100 million annually, according to Forbes.
Tiger Woods has endorsement deals with Nike, Gillette and AT&T, among others that total $100 million annually, according to Forbes. Credit: AP
The squeaky clean image of golf's greatest player and the sports world's most lucrative endorser took a hit over Thanksgiving weekend -- no pun intended. Mr. Woods was involved in a single-car accident, but the timing, the circumstances, the aftermath and the ever-churning rumor mill quite possibly have endangered his own brand and his estimated nine-figure annual endorsement deals with several blue-chip companies.

"I think this incident ultimately will have a negative effect on the Tiger Woods brand," said sports marketing expert Robert Tuchman, exec VP of New York-based sports and entertainment marketing company Premiere Global Sports. "Regardless of the facts, there are brand marketers who might pass at looking at him now. I think as this situation unfolds and how he handles himself will determine the long-term effects to his image. The best thing he can do is be completely honest and open about the situation and what took place."

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What took place is this: At 2:25 a.m. on Friday, Mr. Woods drove his Cadillac Escalade out of the driveway of his home, hit a fire hydrant, hit a tree at a neighbor's home and suffered facial lacerations. He drifted in and out of consciousness and, according to reports, his wife, Elin, used one of his golf clubs to smash the back window of the vehicle and pull him to safety. He was treated and released at a local hospital, and police said alcohol was not a factor.

The rumors
But the story has taken several bizarre twists in the ensuing 72 hours. To wit: The incident came two days after the publication of stories in both the National Enquirer and Star magazines that linked Mr. Woods to a romantic involvement with a New York City nightclub hostess. It is not known why Mr. Woods was out, or where he was going, at 2:30 in the morning.

Gossip website TMZ.com quoted unnamed sources as saying the accident took place after a "domestic issue" in the home, and that Mr. Woods' wife had caused the cuts to his face and the smashed window even before he left the home. TMZ has also since reported, again using unnamed sources, that Mr. Woods told a friend he had to buy his wife a "Kobe Special," a reference to the $4 million diamond ring that NBA star Kobe Bryant purchased for his wife after he was accused of sexually assaulting a 19-year-old hotel worker in 2003. Mr. Bryant was not convicted in the assault but admitted cheating on his wife in what he said was consensual sex with the hotel employee.

Mr. Woods and his wife have declined to meet with police for three consecutive days, although Mr. Woods finally released a statement Sunday on his website saying: "This situation is my fault, and it's obviously embarrassing to my family and me. I'm human and I'm not perfect. ... This is a private matter and I want to keep it that way. Although I understand there is curiosity, the many false, unfounded and malicious rumors that are currently circulating about my family and me are irresponsible. ... My wife, Elin, acted courageously when she saw I was hurt and in trouble. She was the first person to help me. Any other assertion is absolutely false."

Mr. Woods' desire for privacy will likely fall on deaf ears. As of Sunday evening, there were 7,492 articles on Google News regarding the accident, not to mention numerous blog posts and rumor-mongering.

One of the biggest issues has been his refusal to meet with police who are investigating the accident, although by Florida law he does not have to subject himself to an interview. "When I put on my criminal defense hat, I'm on Tiger's side when it comes to that. He does not have to talk to the police," said New York attorney Jonna Spilbor, who regularly appears on Fox, MSNBC and CNN as a legal analyst. "People are making it appear that he needs to participate in this investigation when in fact he does not. From the criminal aspect, he's doing exactly what he's entitled to do -- nothing."

But from a public relations aspect, Ms. Spilbor said, "He's damned if he does and damned if he doesn't. He can't win for losing on this. The public has already put the pieces of the puzzle together in its own mind -- the wife scratched his face, she bashed in the window [before the accident] and no matter what he says, that's what the public is going to believe."

Mr. Woods has endorsement deals with Nike, Gillette, Accenture, AT&T and American Express, among others, that total $100 million annually, according to Forbes. As of Sunday evening, only Nike had put out a statement, saying Mr. Woods had the company's "full support."

Selling trust
"Among the things Tiger Woods sells is trust. And although it may be his prerogative to forgo interviews and discussion about the events of the last few days, it certainly sends a message that is inconsistent with his overall positioning in the marketplace, one also built on performing under pressure," said David Carter, principal with the Los Angeles-based Sports Business Group and executive director of the Sports Business Institute at the University of Southern California. "Despite this, it will take far more than a single incident -- one in which each of us may not know for sure how we ourselves would respond -- prior to inflicting lasting harm on his brand."

"Corporate sponsors should hold their position and support him until, or if, other information becomes available to consider other decisions," John Rowady, president of Chicago-based sports marketing agency rEvolution, said. "The risks and responsibility of being an iconic athlete are incredible in the new, global, social-media age. Tiger Woods is still the poster child for handling it all with integrity until he tells us otherwise."

In a poll on the sports website yardbarker.com, more than 4,000 people responded to the question asking "If you ran a company, would you want Tiger to endorse your product now?" Some 66% (2,687 votes) voted yes while 34% (1,390 votes) said no as of late Sunday evening.

"The timing and the seemingly never-ending news cycle has not helped Tiger, but unless there is something much more sordid than what has come out it will not hurt his marketability," said Robert Boland, professor of sports marketing at New York University. "It's doubtful any of his current endorsement deals would be threatened as of now."

Joe Favorito, New York-based sports marketing and branding consultant, said unless something bigger emerges, "The guy remains the meal ticket for thousands of people who rely on golf for their livelihood. There is no way that changes unless there is something really egregious that we don't know about yet."

Still, Mr. Favorito added, "Is the whole thing a little bizarre? Yes."

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