Tiger's cat is out of the bag. Without saying exactly what he did, Tiger Woods revealed recently that he "let my family down and I regret those transgressions with all my heart." Tabloids sketched the rest: a cocktail waitress, a party planner, an angry wife, a golf club, a car crash, the cops.
At least Woods won't fret the fall of his business empire. Over his golf career he has earned a cumulative $1 billion from prize money and off-the-course deals. The taxman and his agent have taken their respective shares and we estimate that Woods net worth is $500 million. Barring a catastrophic injury (or a divorce from wife Elin that results in a massive settlement) Woods is still on track to become a billionaire within the next decade.
Yes, the bulk of the $130 million he earned in 2009 came from corporate America, notoriously loath to be associated with any hint of scandal. But his sponsors, including Accenture, Electronic Arts, Nike and Upper Deck, have long-term deals with Woods. Nike has built an $800 million (sales) business on his back. The Tiger Woods EA Sports PGA Tour series--now in its 12th incarnation--is one of the most popular videogames on the market. PepsiCo launched a line of Gatorade Tiger sports drinks last year. None of them are about to walk away over his "transgressions."
Who should be worried? His PGA rivals. In 1995, the year before Woods joined the Tour, the top golfer, Greg Norman earned $1.7 million while the No. 100 ranked player, Paul Azinger earned $182,595. This year those numbers were $20.5 million (Woods) and $838,707 (Ted Purdy). Total prize money has gone from $70 million to $275 million. When Tiger wins, there is more money for everybody to go around.
The top three TV ratings in the history of the US Open were all Woods victories, in 2000, 2002 and 2008. The ratings during the fourth round of the 2008 US Open where Woods competed on a torn knee ligament and a double stress fracture in his leg beat those of Game 5 of the NBA Finals played the same day between the Los Angeles Lakers and Boston Celtics.
The second half of 2008, when Woods was recovering from knee surgery, gave a glimpse into the future of the PGA Tour without its best player. It was not pretty. Padraig Harrington won the 2008 PGA Championship in thrilling fashion with Woods on the shelf. Yet despite the close finish ratings were off 55% from the previous year, when Woods took the title. Ratings for the Tour Championship also took a nosedive with Woods out. This year they increased 83% with Woods back in action.
Woods might be even bigger outside the US He appeared at the Australian Masters last month. It was his first appearance Down Under in 11 years. The Australian government put up half of his $3 million appearance fee. Over the four days, 100,000 fans showed up and the government estimated that Woods’ appearance was worth $20 million. It is good business doing business with Tiger Woods.
The difference between Woods and everyone else is that he brings in casual fans that drive up ratings and interest at major golf tournaments. No one else can touch Woods’ star power. E-Poll Market Research tracks the awareness and appeal of celebrities. Woods’ awareness is 82% (sure to rise in their next poll). The next highest current golfer is Phil Mickelson at 25%. From there the drop-off is steep: John Daly (16%), Sergio Garcia (11%) and Harrington (7%). Companies and tournaments know that the fastest way to reach a broad audience is to partner with Woods.
Tournament sponsorship money from car and financial service companies is drying up and the PGA Tour needs Woods at the top of his game more than ever to drive interest. Total prize money was down $5 million this year and is expected to be flat in 2010. Look at what has happened to the LPGA Tour which lacks any major star power. The number of tournaments dwindled from 34 in 2008 to 27 this year. Next year only 24 events are on the schedule.
PGA Tour Commissioner Tim Finchem has been in charge of the Tour since 1994 and has profited as well from the Tour’s growth since Woods’ arrival. He earned $5.3 million last year. No doubt he and the PGA Tour pros should have only one thought in mind right now: Save Tiger.