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Tiger burning too bright?
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June 15, 2001: 1:55 p.m. ET
Experts debate if Woods' ratings, endorsements are nearing a peak
By Staff Writer Chris Isidore
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NEW YORK (CNNfn) - While success on the golf course appears limitless for Tiger Woods as he heads into this week's U.S. Open, his impact on golf's television ratings and his potential for more endorsements may be peaking, experts say.
"He's almost at the top, but not quite. There's room for some growth," said John Antil, a business professor at the University of Delaware and an expert in sports and marketing. "He's already had such a tremendous impact, but I think he's come close to maxing out the benefit for golf."
Woods' popularity has been a boost to the sport, which has seen its average ratings pass the regular season average ratings for basketball and baseball the last two years.
But while the tournaments with Woods far outstrip the viewership of those without him, Antil questions how many more fans can be attracted to the sport.
"There are only so many people who will watch, or take up the game," Antil said. "Even if he won 10 Masters, you're not going to see a 30 percent increase."
The PGA's average TV ratings are 3.5 so far this year, compared with a 3.4 average last year and a 3.2 average in both 1998 and 1999. They were 3.0 in 1996, the first year for which such stats are available from Nielsen Media Research, and Woods' first season as pro. What at first appears to be modest growth now looks impressive as other sports' ratings have declined due to the growth of competing choices.
Each rating point is equal to about a million homes watching the program.
The major golf tournaments – the Masters, U.S. Open, British Open and PGA Championship – garner far better ratings, with last year's U.S. Open grabbing an average 5.7 rating, with an 8.1 rating on Sunday, when it was watched by just over a fifth of households with televisions on at that time.
The lesser tournaments also see better than golf's average ratings as long as Tiger is participating. For example, the average rating for this year's Buick Invitational, in which he played, was 5.7, with its Sunday viewership beating that for the NBA All-Star game. The following week's Bob Hope Chrysler Classic, in which he did not play, had an average rating of 2.7.
Still, as Woods attempts to win an unprecedented fifth major tournament in a row this weekend at the U.S. Open, there is some concern even among some of his greatest supporters about whether too much dominance could be a curb on golf's growing popularity with viewers.
"Fans love great drama, great competition," said Mike Kelly, director of marketing for Nike Golf, the unit of Nike Inc. (NKE: down $0.15 to $41.30, Research, Estimates) that reportedly is paying Woods $100 million over five years to endorse its golf apparel, balls and footwear. "I'm sure that Tiger doesn't see it (dominance) as a problem, and I wouldn't want to see him start to struggle. We benefit from his performance. But from a fan's perspective, drama comes from great competition. Ali and Frazier. Palmer and Nicklaus."
But others say that evidence so far disputes the idea that dominance by Woods is hurting either his, or his sport's, popularity.
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Tiger Woods, shown here in a Buick commercial, is expected to see his endorsement income grow from current record levels. | |
"Last year at the U.S. Open he had a double-digit lead after the second round, they were speculating the ratings would go down because of no drama," said Kevin Sullivan, spokesman for NBC Sports, which is again airing the tournament. "It was the most viewed U.S. Open in history."
"A lot of new fans have been brought on the last few years," Sullivan added. "The sport is very healthy, growing in popularity. I don't think there's any reason to think it's maxed out at this point."
Barbara Zidovsky, vice president for Nielsen Sports Marketing, which tracks sports television ratings, agrees with Sullivan. She points out that when Michael Jordan was leading the Chicago Bulls to six championships over an eight-year period, its ratings grew. They fell off once Jordan retired, as have the ratings for all the major team sports in recent years.
Click here for a look at CNNSI.com's U.S. Open coverage
"I think he (Woods) has a following similar to what Michael Jordan has," Zidovsky said. "Golf is bucking the trend (of declining sports viewership) because of Tiger. If he continues to play well, he'll continue to be appointment viewing."
Building on record endorsement income
A survey by Burns Sports and Celebrities estimates Woods will earn a record $54 million from endorsements this year, nearly two-thirds more than Michael Jordan, who is number two on the list with $35 million in endorsement money. Woods' major product endorsements are Nike, Buick and American Express.
But experts such as Antil and others say despite the staggering number Woods has done a good job of limiting his endorsements so he is not over-exposed. But while Antil believes there isn't much more room for Woods' stable of product endorsements to grow before he runs the risk of over-exposure, other experts in the field believe his endorsement money still could soar.
"Most of the exposure he's getting now is from the media, it's not too many commercials," said Myles Gallagher, president of The Superlative Group, a Cleveland agency that helps negotiate endorsements on behalf of sponsors rather than athletes. "Has he reached a plateau or peak? Nope. Will you see more deals? Yup. He's had a good strategy."
There are widespread rumors that Woods is negotiating a possible deal with Walt Disney Co. (DIS: down $0.26 to $29.60, Research, Estimates) that could match the $20 million annual average of the Nike deal, said Bob Williams, president of Burns Sports & Celebrities. While Williams said that dollar figure may be high, he'd be surprised if such a deal isn't reached soon.
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Both Nike Golf and Woods are smiling about the endorsement deal reported to be worth $100 million for five years. | |
"I see him in two to three years being over $100 million annually in endorsements," Williams said. "There are still some major categories, he's not in: soft drinks, telecommunications, fast food. He's made it no secret he loves the Golden Arches, even if he doesn't eat there as much as when he was in college."
For his current sponsors, over-exposure is a risk that could reduce the effectiveness of their own Tiger Woods campaigns. But Pete Ternes, spokesman for Buick, said the carmaker isn't terribly worried about that because of its dealings with Woods and his agents.
"It (the risk of over-exposure) is certainly a thought in working with him. But he's so businesslike in managing his image, it's very clear he's not going to allow that to happen," Ternes said. "That's a very smart thing for a young guy to understand, and it will give him even more opportunities long-term."
Ternes said he believes Woods may be nearing a natural limit in endorsements, but not one controlled by over-exposure concerns.
"The biggest roadblock is his own personal schedule," he said. "He's very regimented. He's got a very specific exercise time, practice time."
Ternes notes that Woods' schedule doesn't even allow him to play in all four of Buick's sponsored PGA tournaments each year, although he is set to play in the Buick Classic in Westchester County, N.Y., next weekend. Buick will use that tournament to debut two new Woods commercials which will launch its newest model, the Rendezvous.
Woods' current sponsors say they've not only seen tremendous impact from his endorsement contracts so far, but they see the potential for growth in the future as well.
For example, Nike has seen its share of the billion-dollar golf ball market climb from less than 1 percent to 8 to 10 percent since he started endorsing and using the ball last summer. Clothing and golf shoe sales also have increased. But the company expects that growth will continue, and it is coming out with new products that will bear his logo, including a line of every-day shoes that are modeled on the golf shoes Woods wears.
Click here for a look at golf stocks
"There's still a lot of new distribution opportunities, a lot of additional impact he can have," Nike Golf's Kelly said. "People who don't play golf are starting to buy golf clothing, partly because of Tiger. He's what we call a good hanger -- the clothes look good on him."
Even without signing any new endorsement deals, Tiger would be likely to see his endorsement dollars grow from existing sponsors, according to the experts.
"I think his existing sponsors will try to lengthen their deals," Superlative Group's Gallagher said. "They'd be foolish not to. They've seen what kind of impact this guy can have." 
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