Tiger Woods: The Price of a Celebrity Endorsement

Nike's holding him, Accenture's ditching him, and nary a buyer's in sight: of all the burns levied against Tiger Woods, the worst on his wallet is his status as an endorser's hot potato. With news that a former doctor of Woods's is under investigation for shuttling steroids, the golfer has hit reputational—and marketplace—rock bottom. So is now a good time for lesser companies to swoop in on the Woods brand family? For insight, NEWSWEEK's Sarah Ball spoke with Bob Boland, an attorney who has negotiated more than 100 athlete and endorsement contracts, and who is now a professor of sports management at New York University's School of Continuing and Professional Studies. Excerpts:

Tiger Woods: buy, hold, or sell?
He's a hold right now. He can have tremendous value as a comeback story, if somebody has a long-term deal with him. The people thinking about dumping him versus the people thinking about keeping him break down into two different buckets. Do they have a long-term contract, in which case the price of getting out is probably not worth getting out for? I think that's one of the reasons that Tag Heuer decided to hang onto him: I've heard they had a six-year deal with him. For them, it's probably advantageous to wait and see what happens. If you had a short-term deal, and I heard the Accenture deal was under one year, then they get brownie points for getting out now.

But once there's certainty that he's coming back, he's a 'buy'?
I'd want to have greater certainty. I might begin the conversation with his representation now [if I'm a prospective buyer].

What's the vetting process? If Tiger's philandering was the worst-kept secret on the PGA Tour, as it's reported to be, it seems as though someone didn't do due diligence.
The vetting process only works if you're looking for these things. If you really were vetting, I don't know that you'd buy into any current athlete. There's always the possibility of something happening. I don't know that you'd buy anyone who was living if you really were concerned about the vetting. My colleague at NYU and I wrote a column on why naming rights for stadiums were dead, and we thought that maybe the next phase is to name them after somebody who's no longer with us, whose values are timeless: Jackie Robinson, Tom Landry, Arthur Ashe. We thought Tiger Woods was in that category, but what he really is is just a 34-year-old human.

Tiger was recently crowned the first billion-dollar athlete, mostly on the strength of his endorsements. Will he ever touch that success again in his lifetime?
I don't think he'll ever get quite back to that level. I think he'll recognize that, too. But what he's done more than hurt his own earning power is hurt the PGA Tour. What he's hurt is money going into sports and money going into golf. Already, the tour had become a tale of two cities: tour events that Tiger played, and tour events he didn't play. I think you're going to see sponsorship dollars move away from everything but the four majors and maybe a fifth or sixth event, and the rest will be off. Money that was going into sports over the next year or two will suddenly cite the economy and bail out. I think the impact of the scandal is much greater on people who are not Tiger Woods, strangely enough, than on Tiger Woods himself. The same story as Wall Street. Dick Fuld has money. Grandmas in Topeka don't.

If you're the PGA Tour, what do you do to stanch the bloodletting?
They struggled before and had warning when he was out with the knee injury. But they were so euphoric about having him back that they didn't prepare for the future. I think what you'll find is that they'll look at cutting events again to keep sponsor dollars up. They'll run fewer events, make them more valuable, and make the tour more accessible to other players. The worst thing that happened to Tiger in this whole deal was that this wasn't in the heart of a golf season, or on the eve of a golf season. The fact is that this came at the end of a competitive season, and that he wasn't going to play in a meaningful tournament for six months. Because of that, he hasn't been able to turn it back into a golf story—a story about Tiger the Golfer.

But will sponsor dollars flow like never before to the tour when he comes back? People are gonna watch the hell out of his return.
People are gonna watch the hell out of it, yes. It'll flow asymmetrically, I think: it'll flow in the form of TV ratings, in the form of sponsorship of majors or events where there's a secondary story, and he'll move from being No. 1 to 1A. But, yeah, there'll be a lot of interest in Tiger coming back. The one thing we love in America more than anything is to see somebody fall, but we love to see him rise again.