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Tiger Woods' troubles make sponsors wary

| Tuesday, Dec. 15, 2009

The self-destruction of Tiger Inc. is calling into question whether companies can afford the risk of signing multimillion-dollar contracts with celebrity endorsers.

Done right, celebrity endorsers can help boost both the sale of products and their maker's image. But Woods' hasty and stunning downfall shows how quickly things can sour when a superstar athlete's life choices are exposed in a negative light by today's real-time tabloid news culture.

Woods and his advisers spent years cultivating a good-guy image to go along with his winning ways, which is how he became sports' first -- and perhaps last -- $1 billion earner. It's also what has made his fall even more jarring.

"The billion-dollar athlete might be a thing of the past," said Laura Ries, president of marketing consulting firm Ries & Ries. Companies "want a safe choice, and it seems like there's almost no safe choice out there."

Most of Woods' $100 million in annual earnings came not from tournament winnings but from companies like Accenture that wanted to be associated with his persona. These image ads are the types that are least likely to endure. Ultimately that could mean few other sports figures will follow in Tiger Woods' footsteps.

"There has to be trust, and he's just taken a grenade to any kind of traditional agreement that you'd normally have," said John Sweeney, director of sports communication at the University of North Carolina at Chapel Hill's School of Journalism and Mass Communication.

Accenture severed ties with Woods on Sunday, two days after he announced an indefinite leave from golf to work on his marriage after admitting infidelities. It said he was "no longer the right representative" of the company's values.

That's not surprising, because the global consulting firm had pinned its entire identity on the golfer and bragged that he embodied Accenture's values of perfection and integrity.

AT&T said it is also is evaluating its relationship with Woods, as is Swiss watchmaker Tag Heuer.

Cincinnati-based Procter & Gamble's Gillette brand announced over the weekend it was distancing itself from him by not airing ads featuring Woods. Nike, PepsiCo Inc.'s Gatorade and EA Sports say they are standing by him.

Other companies are likely to use the implosion of Tiger Inc. as a warning that they must closely scrutinize all off-the-field behavior of any sports star they're considering hiring and just how much benefit they're getting.

Even then, they'll likely be wary of ads that bank on a celebrity's image and instead go for that star's endorsement of a product.

"Brands continually will come back to individuals who they believe will help them sell more product," said Rick Burton, former chief marketing officer of the United States Olympic Committee and now a sports marketing professor at Syracuse University. "The capitalism of all this is if Tiger can help somebody sell a brand in the future, they're going to use Tiger."

Additional Information:

Who's in, who's out

Here's a look at how Tiger Woods' top current sponsors are reacting to the golfer's indefinite break from the sport, a move his spokesmen said he made so he can fix his marriage:

• Dropped: Consulting firm Accenture dropped the athlete Sunday, saying he was 'no longer the right representative' of the company's values, including integrity and perfection.

• Distanced: Swiss watch maker Tag Heuer, a unit of LVMH Moet Hennessy Louis Vuitton, said Monday it is assessing its options. Gillette, the Procter & Gamble Co. unit that uses the slogan 'The best a man can get' in its marketing, said over the weekend that it won't air ads for its Fusion razors that include Woods or include him in public appearances. AT&T said it is evaluating its relationship with the golf superstar.

• Still supporting: Nike Inc. and EA Sports have said they plan to continue their relationships with Woods. Gatorade, a unit of PepsiCo Inc., which decided before the car crash that precipitated Woods' withdrawal from golf to drop its Woods-branded beverage, has offered public statements of support.

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