The $100 Million Car Crash

Quinn Rooney / Getty Images Tiger Woods’ accident—and the questions surrounding it—translates into big money issues for the greatest product endorser in sports history. Gerald Posner discovers what’s at risk.

Tiger Woods is a money machine, and while many fans might think he earns most of his money by winning golf tournaments, it’s his outside commercial endorsements and ventures that bring in 90 percent of all his money. He’s made an estimated $1 billion in endorsements in his 13-year career, the most of any athlete ever, far eclipsing Michael Jordan’s athlete-as-mega-business model of the 1990s; Sports Illustrated estimates he’s now bringing in almost $100 million a year pitching products.

What this all means: Tiger Woods is not dealing just with medical recovery, marital strife, and legal headaches following his car crash early Friday morning. Enormous financial issues are at stake.

Even if Tiger takes a 10 percent hit on his endorsement income going forward, that’s $10 million a year, or $100 million over the next decade. A very expensive domestic incident.

Tiger Woods has become the $100 million-a-year man not only by consistently winning major championship titles, but also translating that into a winning image off the court. He was one of the most recognized faces on the planet, without a whiff of scandal in his wake. No steroid accusations, tabloid pictures of late night partying, strippers filing paternity suits, police reports, or any of the other issues that have turned many famous athletes into endorsement pariahs. The worst thing that’s been said about him is that he needs to better control his often-petulant temper on the golf course—a trait that his boosters have pointed to as part and parcel of being supremely competitive.

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Talking to some experts on sports endorsements and the value of celebrityhood, none who wanted to be seen jumping on Tiger at a vulnerable moment by being quoted by name, the consensus is that only some of Tiger’s commercial moneymakers are at current risk. But some damage has already been done to his long-term brand.

Let’s break down the numbers.

Unless the story turns out to be far more sordid than what is hinted at now, it appears Tiger is safe on his deals with Accenture, a global management, consulting, and technology-services firm that sponsors him. Ditto, his arrangement with the EA videogame series, Tiger Woods PGA Tour. It’s a top seller, and buyers are unlikely to be swayed by whether or not he was cheating on his wife.

The same is true for Tiger Woods Design, which Forbes estimates contributes about $10 million annually to his income. In this company, Tiger lends his name to farflung projects—general golf-course developments—under construction from Dubai to North Carolina. A course in Mexico is expected to begin construction in a few months.

However, some of his largest endorsements—brands with more mainstream images—could be threatened if Tiger dithers and the personal story gains a tawdry steam. With a large pool of athletes to choose from, large companies are extremely reticent to tie their products to anything with the whiff of scandal.

His biggest moneymaker is Nike. Tiger wears Nike clothing from head to toe, and with the exception of his putter, uses only Nike clubs and balls. Sales of golf equipment to wannabe Tiger duffers is an enormous business for Nike. Woods signed a new multiyear deal with Nike in December 2006, and though the terms were not released, his five-year deal in 2001 was widely reported to be worth $100 million. Another company susceptible to changing public opinions about a celebrity endorser is Gatorade. In March 2008, Gatorade introduced Gatorade Tiger, Woods’ first licensing agreement and his first deal with any beverage company. Golfweek reported that the deal was for five years and could pay Woods as much as $100 million. Woods even picked out the flavors himself: cherry blend, citrus blend, and grape.