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Original Issue

Stuck in The Rough

Tiger Woods ran off the road in Florida five-and-a-half years ago, and the impact is still causing a sports marketing traffic jam

IN EARLY 2010 agent Max Eisenbud was in the process of negotiating a deal with Porsche for his client, Maria Sharapova. The discussions moved ponderously. Decisions that were usually made by a company's chief marketing officer required board approval. Like a tennis ball lolling across a net, documents moved back and forth. Eisenbud didn't need to be told why the process was slow: This was early fallout from the Tiger Woods scandal.

In November 2009, Woods had been revealed as a serial philanderer, a humiliating fall from grace. Equally embarrassed were a roster of large international corporations that had paid tens of millions each year for the right to associate with Woods and his reputation for dignity and decorum. When Accenture designed a campaign around Woods, the company did not envision it being spoofed in a sexualized Internet meme.

Back to Sharapova: She finally got her Porsche deal, but it took nearly a year, and Eisenbud says that the contract was packed with lengthy morals clauses and rights that would terminate the association at a whiff of scandal. "Tiger was so squeaky clean, a lot of major, blue-chip companies were scared to align themselves with athletes. If this could happen to him, who can you trust?" says Eisenbud, who works at IMG, Woods's previous agency. "But here's the thing: This [climate] hasn't changed. That fear never totally went away."

We can argue about what impact the events of Thanksgiving 2009 have had on Tiger's golf game. His aura may have vanished that night, or maybe, physical decline is the root cause of Woods's majors drought—which will reach 27 if he doesn't win this week's Masters.

But his chilling effect on sports marketing is unmistakable. Start with Woods himself. According to Golf Digest, he earned $55.1 million in 2014, most of it from endorsements. That marked his lowest annual take since 2000 and is a long way from his high of $122.7 in '07 and well below his career average of $72.1. Even more, the types of companies Woods represents have changed. The blue chips—AT&T, Accenture, Gatorade and Gillette—fled after the scandal. Nike remains, but Woods's website also lists Kowa (a Japanese manufacturing conglomerate), NetJets and MusclePharm (a "sports nutrition brand"). Recently Woods announced deals with Sol Republic headphones and Hero, a motorcycle and scooter company based in India.

Yet however many tens (hundreds?) of millions he cost himself, the negative impact he's had on colleagues' earning potential is, cumulatively, much deeper. The market has held up for some established stars, such as Phil Mickelson, Tom Brady and Peyton Manning, but not for all. Albert Pujols, maybe the best baseball player of the last decade, makes only $2 million off the field. And younger athletes such as Mike Trout, Bryce Harper and Russell Westbrook have endorsement portfolios that don't seem equal to their accomplishments and name recognition.

Meanwhile, as companies became cautious about jocks, other celebrities stepped up. Once, it was considered equally gauche and career-hindering for Hollywood actors to shill for products. At most, stars might jet overseas to shoot a commercial—then pray no one in the U.S. would see it. That ethos has softened, and now Catherine Zeta-Jones can endorse T-Mobile or Matt Damon can appear in a Super Bowl ad for Nationwide and we think nothing of it.

"Celebrity has become so fragmented," says Doug Shabelman, president of Burns Entertainment & Sports Marketing, a Chicago-area firm that matches celebrities with endorsement opportunities. "You have reality stars, bloggers, YouTube stars, chefs—everyone from the Duck Dynasty guys to Rachael Ray. And they're competing for the deals that used to go to athletes."

Shabelman adds that Woods isn't solely to blame. "Lance Armstrong and Kobe Bryant, they contributed to this too." Still, Woods went to great measures to construct an image of decorum and restraint. That veneer was shattered. And, years later, countless other athletes continue to pay a financial price. A Tiger Effect, you might call it.


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