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.”

 

Gideon Canice

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