Corporate World Ambivalent About Tiger Woods

As there appears to be little doubt among sports media and public relations experts that Tiger Woods’ silence has increased the already severe damage to his name and reputation, his sponsors seem to be split on whether to continue its support of the world’s most well-known athlete or to cut ties and hide.

Of Woods’ major endorsement deals to this point:
• Accenture has flat out dropped him
• Gillette, TAG Heuer and Gatorade have suspended its ads and stated they are reevaluating the relationship
• Nike and EA Sports has stated it is standing by him

So with such different reactions by the large corporate names, it poses the question: “What’s the right move? How should a Tiger Woods sponsor, or any sponsor in a similar situation, now react?”

As a corporation, deciding which athlete or celebrity to endorse your brand name is a lot like investing in a stock – You do the necessary research, invest the appropriate amount of money and hope for the maximum ROI (return on investment).

Sometimes the investment pays off and your spokesperson delivers big returns over a long period of time. While other times your spokesperson’s athletic performance declines or their personal life suffers a scandal, and your brand name gets hurt.

For almost 15 years Tiger Woods has been the IBM of celebrity endorsers. Since his professional debut in 1996, Woods has served as the premier name in celebrity endorsements – both nationally and internationally – generating billions of dollars for his corporate partners.

But with the recent scandal in his personal life, any brand connected to Woods has to take a strong look at its investment and decide if it should “ride out” the storm or “dump it” and cut its losses.

Just like a stock, there’s always a chance Woods can rebound and return his image to a remunerative level.

Kobe Bryant’s sexual assault scandal in 2003 sent sponsors running for the hills, knocking each other over in order to dump the Los Angeles Lakes superstar.

But remarkably, over time, Bryant has regained his status as a bankable athlete pitchman. Bryant has maintained, even raised, his level of play since the incident and the embarrassing episode is all but forgotten.

So maybe Woods will recover as well.

Or maybe not.

The scandal is still only a few weeks old so nobody really knows for sure how Woods will ultimately emerge once all the dust settles. But as the story gets seedier by the day and Woods continues to refuse implementation of any crisis management or basic public relations action, his image is sinking faster than stock in Enron.

The safest move for any corporate brand is to sever ties and no longer allow Tiger Woods to be involved with its image. When in doubt you error on the side of caution. A corporation’s brand and image is too important to gamble on a person who’s obviously led a reckless life.

But just deciding to drop Woods is not enough. The manner in which you do so must be handled carefully and professionally or you’ll end up with a public relations fiasco of your own.

Accenture, the global management consulting and outsourcing company, almost immediately reacted to the Woods’ scandal. The company announced it was ending its six-year relationship with him and quickly removed all images and mentions of Woods in its marketing and promotional materials.

By denouncing the golfer and acting swiftly Accenture garnered hundreds of thousands (maybe millions) of dollars of positive publicity and strengthened its brand and image.

The one brand, however, that may want to stick with Woods is Nike. The undisputed leader in the sportswear and sports equipment industry has aligned itself with Woods since he turned pro. Nike has been, by far, the most recognizable corporate name associated with Woods.

The two have been wrapped together in the public eye for so long that the image of Tiger Woods sinking a thrilling putt is practically synonymous with the Nike Swoosh. With such a strong commitment and brand recognition, Nike will be associated with Woods in most people’s minds regardless of whether its sticks with him or not.

So Nike might as well support the embattled golfer and stay with him for the long haul. Although it would be wise for Nike to subtly and quietly curb any advertising or marketing which features Woods for the time being.