Tiger Woods’ personal life may be out of the prime time news headlines at the moment but the financial consequences of what he allegedly did are now becoming clear.
I’m talking about the effect on business, not only the value of the many sponsorship contracts Woods has but also predictions on the effects on the sport of golf itself resulting from these events and Woods’ withdrawing from the sport entirely for the foreseeable future.
Quoting a Bloomberg report, Brand Republic reports today that the cost of the Tiger Woods scandal to TV networks and sponsors will be more than $220 million in lost revenue.
According to that report, Wood’s decision to take a break from golf could reduce tournament crowds by 20 per cent. TV audiences could shrink by up to a half, with Nike – the only major Woods sponsor to publicly state its commitment to the golf celeb – standing to lose up to $30 million in sales.
[…] CBS Sports executive producer Rick Gentile said: "It is not so much a ripple effect as it is a tsunami. The aura is gone." During October, $576.4 was spent on weekend golf broadcasts, according to TNS. When Woods was out with a knee injury in 2008 and early 2009, weekend television audiences sank by 47 percent, according to data from Nielsen.
In stark contrast to Nike, main sponsor Accenture very clearly stated its reasons for cancelling its sponsorship of Woods.
To add further mud to the already-cloudy water, Brand Republic’s report also has this about what the consequences may be if there’s a divorce:
[…] A messy divorce will likely further damage the Woods’ brand image and his value to advertisers. An unidentified source told People magazine in the US that [wife Erin] Nordegren had already met divorce lawyers to discuss her pre-nuptial agreement and she could win half of the estimated £337.5m Woods has earned in the five years they have been married.
Messy indeed.
Related post:
- The Hobson and Holtz Report – Podcast #508: December 10, 2009 – discussion on how Tiger Woods could rebuild his reputation.
7 responses to “The $220m effect of Tiger Woods’ fall”
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Hi Neville,
This is in interesting to read. One of my colleagues posted a similar article but looking at it from the social sentiment perspective. So couple this with the $220 million Bloomberg report and you have a very interesting and compelling piece.
You can find it at:
http://infegy.com/buzzstudy/tiger-woods-measuring-the-real-damage/
if you wanted to take a look.
Thanks,
Gray.
RT @jangles The $220m effect of Tiger Woods’ fall http://bit.ly/4rJiuI
Neville, I just listened to the podcast with your advice for Tiger – how sound! Get it all out in the open and get back to what you do best – playing golf.
It’s astounding that one man can have such a potentially devastating affect on a global sport, I hope for his sake and for golf (a game that I love) he heeds your advice and quietly goes about restoring his status as the greatest person ever to play the game.
When considering if there is any way back, I think and hope there is; he isn’t the first global figure to be involved in such scandal, and wont be the last. I recall thinking it was the end for Bill Clinton, David Beckham and even Wayne Rooney but all seem to be doing rather well at the moment.
As for golf, I remember some years back Tiger wanted a share of the TV revenue from the tournaments that he played and, as far as I can remember, it was ‘laughed out of court’, maybe it wasn’t such a brash request after all!
After dominating Golf world for some times he should take rest for a while. This is one of the worse time for him. I am a big fan of Tiger Woods and I hope he comes back stronger then ever.