Since he announced his “indefinite” break from golf yesterday at around 7p ET, Tiger Woods may have watched hundreds of millions (if not ultimately billions) of dollars disappear less than 24 hours later.
After Woods’ press release, Accenture yanked the golfer’s image from its website, AT&T said it was now “evaluating” continuing its relationship with Woods while this morning Gillette said it is discontinuing using Woods in its marketing campaigns. Earlier, Gatorade dropped its signature Woods product from all store shelves.
Yes, we’d seen some cracks in the dam before the announcement, but now more and more sponsors are actively dropping Woods from their marketing plans.
Next question: Why haven’t sponsors dropped Woods altogether to save the tens of millions they will continue to pay him for now doing nothing?
Emily Steel and Suzanne Vranica of the WALL STREET JOURNAL have a case study on why sponsors are not tearing up their endorsement contracts with Woods:
Marketers can get burned by reacting too quickly to a publicity crisis. A unit of Italian apparel maker Fila Holding dropped Sacramento Kings forward Chris Webber as an endorser in 1998, only to be sued because he had merely been charged with—not convicted of—marijuana possession. Fila was ordered in 1999 to pay Mr. Webber $2.61 million in lost endorsement fees. The athlete went on to work for a rival.
I feel safe in saying that besides Nike, which relies completely on sales from Woods products to keep its Nike Golf division going, virtually all of Woods’ sponsors will not renew their agreements with the golfer.
Because of the prospect of being ensnarled in a cancellation lawsuit, those same sponsors will just ride things out with Woods anonymously, cutting checks to the golfer that amounts to free money - rather than drop that same coin in attorney fees with no guarantee of a win in court.