Business of Sports

Who Benefits From Tiger Woods' Scandal?


1. All Tiger, All the Time As widespread titillation and fallout from the Tiger Woods scandal continues, and mainstream media and the tabloids alike keep their vigil outside the gates of Woods' Isleworth (Fla.) home, we realize we've turned the page in the playbook on how the media treats sports figures, as opposed to Britney Spears or the Octomom. And after listening to sports marketing and crisis management experts pontificate endlessly over the past week in seemingly every media outlet known to man—and weighing those opinions against our own—we've come to a couple of other conclusions. Namely, Woods' sport category and male-centric endorsement deals (Nike (NKE), Gillette), are in no danger, as long as he returns to the golf course fueled by the competitive fire that has driven him his entire life. If any deals are in jeopardy it is the nonsports contracts (Tag Heuer, American Express (AXP), and Accenture (ACN), which are more closely tied to his image and reputation than to his on-course abilities. A Los Angeles Times online poll run on Friday asked the question, "Has your opinion of Tiger Woods changed in light of recent events?" Of 2,344 total votes, 63.7% of respondents replied that they had lost respect for Woods, with 36.3% holding the opinion that "no, his private life is none of my business." Likewise, as reported by SportsBusiness Journal, the Davie Brown Index, which assesses celebrity attributes in such categories as aspiration, notice, trendsetter, appeal, influence, trust, and endorsement, found that fewer people "aspire to be like" Woods since his accident was reported the day after Thanksgiving and allegations of extramarital affairs surfaced. Woods' scores in the "aspire" category fell from 77.18 to 63.38, while his "influence" dipped from 76.29 to 74.58 and his "endorsement score" fell from 77.67 to 71.70. Contract LeverageWhile these dips in popularity are relatively small, at least for the moment, any drop in status could potentially give Woods' existing sponsors more leverage in their next round of contract negotiations. Sponsors may also cite contractual morality clauses as a reason to hold him to a smaller contract next time around. One of the potential biggest losers in the Woods scandal? His Tiger Woods Foundation, the beneficiary of the just-completed Chevron World Challenge, which has benefited more than 10 million youths since its 1996 inception, according to the foundation's Web site. Tiger Woods Foundation grant programs support 100 charities annually, and the Earl D. Woods scholarship fund has handed out more than $2 million in total, in $5,000 increments. Besides the Chevron World Challenge, other events supporting the Tiger Woods Foundation include the Tiger Woods AT&T National golf tournament in Washington, D.C., in July and TigerJam Presented by AT&T (T), a springtime concert event at the Mandalay Bay resort in Las Vegas. "Character education" is one of the "three priorities" of Tiger's Action Plan, a character development program designed for youth aged 8 to 17 and promoted by the foundation. One of the great ironies of this program at present is that its existence could be the reason foundation backers cite if they decide to withdraw their support. As we mull all this over, we're also wondering: Who stands to benefit from this crisis? One clear possibility is the PGA Tour's San Diego Open (formerly known as the Buick Invitational), held January 28-31 and widely considered to be the first tournament Woods will play in 2010. The tournament failed to pick up another title sponsor after Buick stepped away, and the overwhelming media attention the event is likely to get should Woods commit as expected may help it land another title sponsor. Another beneficiary could be CBS, scheduled to broadcast that event and, as The Washington Post put it, "sitting on a ratings mother lode." 2. December is the Season for a Bowl Full of…Football. NCAA Matchups Set Let the debates begin. In the aftermath of invitations issued for the 34 college football bowl games to be contested between Dec. 19 and Jan, 7, culminating in the Citi BCS National Championship Game that will pit Alabama against Texas, sports pundits will be coming out of the woodwork to decry the number of bowl games and complain loudly about the BCS and our lack of a national college football playoff. Regardless, the games are set, nothing on the BCS front will change this year (or anytime soon), and the 30 host cities are looking forward to welcoming football fans and reveling in the millions of dollars that bowl-related spending brings each year. Not only the cities benefit, of course—NCAA football conferences count on the TV revenue windfall that bowl season brings, and even coaches of 6-6 teams get a bonus for being bowl-bound. Of the 34 college bowl games being contested this year, it's notable that only four—the New Mexico, St. Petersburg, Texas, and International (held at the Rogers Centre in Toronto)—have no corporate name attached. Four facilities will benefit from hosting two games apiece (the Rose Bowl and Qualcomm Stadium in Southern California, the New Orleans Superdome, and the Florida Citrus Bowl in Orlando). Fourteen contests will be held in NFL stadiums, and two in Major League Baseball parks—meaning alcohol will be allowed, a constant point of contention among NCAA brass. Special FlightsAs always, fan interest in the games and economic impact will vary wildly. For some communities outside the big-time sport map, such as Albuquerque, El Paso, Boise, and Birmingham, hosting a college bowl game provides the best opportunity all year to draw attention from the global business community and attract tourist dollars. For other cities, the bowl games are merely gravy, further boosting community pride and providing novel platforms for sponsor activation. JetBlue Airways (JBLU) is introducing new flights called Hook'Em Shuttles, which will ferry passengers nonstop between Austin and Long Beach on Jan. 6 and 9 to accommodate University of Texas Longhorn fans attending the BCS National Championship Game at the Rose Bowl on Jan. 7. Back home, Ole Miss and Oklahoma State will be the matchup for the AT&T Cotton Bowl's debut in new Cowboys Stadium on Jan. 2. Other sponsors for that event include American Airlines, the Hilton Anatole Dallas, and Dr. Pepper. Televised by Fox, the AT&T Cotton Bowl has been played at Fair Park in Dallas since 1937 and has an estimated economic impact of $30 million. In Tampa, Raymond James Stadium will once again play host to the Outback Bowl, featuring Auburn vs. Northwestern on New Year's Day. The event, now in its 24th year, was known as the Hall of Fame Bowl until Outback Steakhouse assumed the title sponsorship in 1995. More than 65,000 fans typically attend the week of events around the Tampa Bay area, generating an estimated annual economic impact of $40 million per year. PR OffensivePolitical debate surrounding the BCS continues. After several hearings on Capitol Hill on supposed injustices of the BCS system over the past few years, the BCS hired Ari Fleischer Communications to launch a PR campaign for the system and a new BCS executive director, Bill Hancock. (A recent Gallup poll indicates that 85% of college football fans disapprove of the BCS.) Meanwhile, a group of political operatives in October formed the Playoff Political Action Committee to raise money and provide a fund-raising backbone for playoff supporters in Congress. Coaches share the college bowl spotlight every bit as much as players do. But unlike the team, they stand to directly benefit financially. Alabama coach Nick Saban will earn a $135,000 bonus for reaching the BCS title game, a tidy sum that jumps to $335,000 if he wins. At Texas, head coach Mack Brown could make an additional $450,000 if the Longhorns take it all. Compare that with Clemson, where coach Dabo Swinney will earn only an additional $20,833 for taking his team to the non-BCS Gaylord Hotels Music City Bowl on Dec, 27 (although he did get a $10,000 bonus for achieving eight regular season wins.) Sadly, as 68 teams prepare for their bowl appearances, Northeastern and Hofstra universities have folded their football teams, citing rising costs and lack of interest. Northeastern dropped its program after 74 seasons, while Hofstra's board of trustees voted unanimously to cut their team following its 69th season.
Rick_horrow
Rick Horrow is a leading expert in the business of sports. As chief executive officer of Horrow Sports Ventures, he has been the architect of 103 deals worth more than $13 billion in sports and urban infrastructure projects. He is also the sports business analyst for CNN, Fox Sports, and the Fox Business Channel. Karla Swatek is vice-president of Horrow Sports Ventures and co-author of Beyond the Box Score: An Insider's Guide to the $750 Billion Business of Sports (2010). Horrow is also the host of Sportfolio, a new program on Bloomberg TV that airs Wednesday nights at 9 pm ET.

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