iStock.com/Robert Way
January 23, 2024
Should Nike Have Walked Away From Tiger Woods?
The end of Tiger Woods’ contract with Nike brought to a close one of the lengthiest and most lucrative brand deals in the history of sports. Did it have to end?
The split comes amid rumors that Nike could be exiting the golf category. The world’s largest sports brand got out of the equipment category — golf clubs, balls, and bags — in 2016 amid declining sales. In a December analyst note attained by Footwear News, Williams Trading’s Sam Poser called out reports that Nike may be further licensing out its golf footwear and apparel business while parting ways with other golf stars such as Rory McIlroy.
The move could fine-tune Nike’s focus on team sports, fitness, and running, although Poser felt downplaying golf by Nike “will do long term damage to the brand.”
Woods has earned over $500 million from the 27-year partnership, and Nike could be ending the contract as a cost-saving move. In December, Nike announced a $2 billion cost-reduction plan as part of a broader effort to reinvest in innovation to regain top-line momentum.
Stymied by injuries, the 48-year-old’s last major win was at the Masters in 2019, representing his 15th major but only his first in 11 years. Nike stood by Woods through his ups and downs, including an infidelity scandal in 2009 that played out in tabloids and saw AT&T, Accenture, and Gillette drop the sports personality as a spokesperson.
“Tiger, you challenged your competition, stereotypes, conventions, the old school way of thinking,” Nike said in a statement on Instagram. “You challenged the entire institution of golf. You challenged us. And most of all, yourself. And for that challenge we’re grateful.”
In a statement posted on his X account, Woods thanked Nike co-founder Phil Knight and the brand’s staff for supporting his “many amazing moments and memories” over the years while noting that “there will certainly be another chapter.” Market reports are speculating that Woods may be fronting an apparel line from TaylorMade, his equipment sponsor.
Nike could have signed Woods to a lifetime contract similar to deals reached with Michael Jordan, LeBron James, and Kevin Durant of the NBA as well as soccer phenomenon Cristiano Ronaldo.
Risks of parting ways include missing another comeback. Nike is estimated to have earned $22.5 million from brand exposure during Woods’ final round of the 2019 Masters, according to Reuters.
Eric Smallwood, the founder of Apex Marketing, estimates that Woods provides more exposure for Nike than the NBA stars due to golf’s slower pace. He told CNBC, “Golfers have longer longevity.”
Discussion Questions
Will Nike eventually regret its decision to end its contract with Tiger Woods?
What did Woods’ sponsorship mean for Nike, and how important is the golf category for the brand?
Poll
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Gene Detroyer
Professor, International Business, Guizhou University of Finance & Economics and University of Sanya, China.
Paula Rosenblum
Co-founder, RSR Research
Patricia Vekich Waldron
Contributing Editor, RetailWire; Founder and CEO, Vision First
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Golf is a relatively insignificant area for Nike, especially when compared to the company’s other sporting segments. It is also a market where they face more competition from other dedicated golf brands. If they are pulling back even further from the previous retrenchment in equipment, then it is hardly surprising that they are ditching sponsorships. Tiger Woods is a phenomenal name, but there is no point having a strong name in a sports arena Nike is not intending to grow. Given the cost of the sponsorship it likely wasn’t good economics to leave in place just to promote the Nike brand in general.
Does Nike need to (defensively) channel Edith Piaf – Je ne regrette rien ?? No: the world will recognize this is “strictly business”; a sports contract is pretty much 100% based on performance, and the reality of that performance is made clear by the numbers Tom cited. Indeed the risk was more likely in the other direction: a nostalgia-tinged continuance might have ended up looking more like charity than recognition. I think Nike’s record of relationships with athletes, save for one or two miscues, is something most companies would love to have had.
Tiger Woods should be considered in the same category as a Michael Jordan – a generational talent that transcended the sport. There’s little doubt that the ongoing investment in maintaining the relationship, and the lack of direct revenue to support it were a big part of the calculation. If Nike has no designs on the golf category, then this simply may be the most practical outcome. However, with the evolution of the sport on the LIV tour, as well as other new formats for golf play and competition, it may be that golf evolves into something even bigger that Nike may want to be part of. Tiger has a truly global brand. I would also add that Tiger’s son Charlie is emerging as a huge potential star of the future, so the end of the Tiger contract could impact future prospects with Charlie.
You are correct about generational talent. The differnece is buyers want the latest “Air”, a brand in itself, which has meaning long after MJ retired.
Backing off of golf (and thus Tiger) is one thing. I’m amazed that Tiger’s not-insubstantial personal travails didn’t cause so much as a speedbump in the relationship. He skated in a way that few have. In any case, Nike has freed up beaucoup bank that can be directed elsewhere.
It’s not about walking away from Tiger. It’s a decision to walk away from golf that said, Tiger is more than golf. He is an ambassador to the world of sports. So maybe the decision should consider more than the exposure at the final round of a golf tournament.
A 27-year partnership is an amazing feat in modern sports marketing. One could call this ‘rarified air’, and both Tiger and Nike came away from this relationship with countless benefits. I do think Nike’s slow pull away from golf is unfortunate. Who doesn’t like watching the final round of a major tournament on a lazy Sunday, as one of Nike’s golfers like Rory or Tiger or Scottie Scheffler, wearing the one and only logo on hat, shirt and pants, make their incredible shots and give us tremendous excitement all the way to the 19th tee.
Who doesn’t like watching the final round of a major tournament? Fewer viewers every year.
“Nothing personal Tiger. It’s just business.” I’m sure this was a difficult conversation and conclusion for both parties. But if Nike is indeed exiting the category, then it very quickly gets pretty simple. And life will go on for both parties. Nike will do just fine without golf and Tiger will have abundant opportunities available for his next chapters.
I actually give Nike credit for making a tough call. The decision sounds like it was highly focused on the customer, and not on the icon. It’s a recognition of an evolving market and a pragmatic, if painful, prioritization of investment opportunities. Not all parent brands would have come to the same conclusion.
Sixty percent of Nike’s revenues are international. Nike is a world brand.
This is a fairly easy decision for Nike. Golf is not what it used to be. In the 1930’s it was the world’s 4th most popular sport. Today, it doesn’t make the top 10 in viewership.
Football (soccer) leads the owrld with a billion more fans than second place cricket. Where would you put your money?
As for golf, demographics are not favorable. Every year the average fan and player gets older. Millennials show little interest. Millenials value speed and efficiency in their life and spending more than four hours on a golf course, doing basically the same gesture over and over again, is not fun for them. Pickleball anyone?
Everyone seems to applaud Nike’s moves and I guess they’re paying off, more or less. But it strikes me that the company has had 4 (approx) complete changes of direction in the past decade. That can only work for so long. Is it a retailer? A brand? Which are its flagship stores? How “rare” should the product be?
The answer has changed so many times that I’m completely flummoxed.
Nike is no longer in the golf equipment business (Golf Clubs and Golf Balls), so I do not think they will regret this in the least. I mean, what was Tiger promoting-golf apparel evidently, and that line does not need Tiger to maintain it. The time was definitely right for this to happen.
There’s a life cycle for all partnerships and product lines. Big global brands like Nike are smart to evaluate high-profile deals and to clearly communicate changes to the market.
Tiger Woods is irreplaceable to the Nike Gold brand. The Nike Sunday Red will be worn by his son, Charlie Woods, at Augusta in the near future.
It is true that there will be other Nike athletes. Tiger Woods’ next chapter will have an impact, wherever he goes.
No relationship will be more memorable than the one these two enjoyed over the past two-plus decades. It can’t have been an easy decision for either side, especially given the length of their relationship. A memoir by Phil Knight, Shoe Dog, even details the relationship with Woods. Because of the relationship, the two will always be intertwined.
Watching Woods play at both the Hero World Challenge and PNC Championship, watching him walk without a limp and seeing his passion for the game still there, there was nothing I anticipated more than the Nike advertisement. The remarkable story of how he recovered from another low–a nearly career-ending car accident–and fought, strived and became the greatest.
Even though both brands will thrive, we have to wonder what has been lost. Sports marketing has some of the best advertising in history, with iconic symbols, unforgettable moments, and some of the best advertising in the world. Db