Can companies afford the risk of signing multimillion-dollar contracts with celebrity endorsers? The self-destruction of Tiger Inc. has some saying the billion-dollar athlete may be a thing of the past.
Celebrity endorsers can help boost both the sale of products and their maker's image. But Woods' hasty and stunning downfall shows how quickly things can sour when a superstar athlete's life choices are exposed in a negative light by today's real-time tabloid news culture.
Companies "want a safe choice and it seems like there's almost no safe choice out there," said Laura Ries, president of marketing consulting firm Ries & Ries.
Woods and his advisers spent years cultivating a good-guy image to go along with his winning ways, which is how he became sports' first — and perhaps last — $1 billion earner. It's also what has made his fall even more jarring.
Most of Woods' $100 million in annual earnings came not from tournament winnings but from companies like Accenture that wanted to be associated with his persona. These image ads are the types that are least likely to endure. Ultimately that could mean few other sports figures will follow in Tiger Woods' lucrative footsteps.
"There has to be trust and he's just taken a grenade to any kind of traditional agreement that you'd normally have," said John Sweeney, director of sports communication at the University of North Carolina at Chapel Hill's School of Journalism and Mass Communication.
Accenture severed ties with Woods on Sunday, two days after he announced an indefinite leave from golf to work on his marriage after admitting infidelities. It said he was "no longer the right representative" of the company's values.
That's not surprising since the global consulting firm had pinned its entire identity on the golfer and bragged that he embodied Accenture's values of perfection and integrity.
Others evaluating their relationship with Woods include AT&T Inc. and Swiss watchmaker Tag Heuer. Procter & Gamble Co.'s Gillette brand said this weekend it was distancing itself from him by not airing ads featuring Woods.
Nike Inc., PepsiCo Inc.'s Gatorade and EA Sports say they are standing by him.
Some companies are likely to use the implosion of Tiger Inc. as a warning that they must closely scrutinize all off-the-field behavior of any sports star they're considering hiring and just how much benefit they're getting.
Even then, they'll likely be wary of ads that bank on a celebrity's image and instead go for that star's endorsement of a product.
"Brands continually will come back to individuals who they believe will help them sell more product," said Rick Burton, former chief marketing officer of the United States Olympic Committee and now a sports marketing professor at Syracuse University. "The capitalism of all this is if Tiger can help somebody sell a brand in the future, they're going to use Tiger."
© Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.