Endorsement mega-deal nears for Florida resident Tiger Woods
Whether it be due to his meteoric rise to prominence at a young age, record setting performances, or woes in his personal life followed by a return to dominating form, Tiger Woods has been a fixture in the sports landscape for nearly two decades since turning pro. The hype surrounding Woods was obvious from the start, with equipment maker Nike inking him to an initial $40 million, 5-year deal in 1996. According to some industry insiders, his most recent contract pays out at least $20 million annually – a number that may surprise many Florida residents.
Now, it appears that Woods is set to sign a new deal with Nike that will increase his compensation related to his athletic endorsements for the company, keeping him as the top endorser in the sport. While the financial details of the deal have not yet been reported, Woods may have leveraged his recent successes on the course to increase his earnings related to sports merchandising and licensing. Such an increase indicates a remarkable recovery from off-the-course troubles in 2009 that may have played a role in losing sponsors such as Gillette, Gatorade and AT&T.
Woods clearly has an understanding of the process of negotiating contracts and the power of athlete endorsements. Even though many believe that re-signing with Nike is a foregone conclusion, Woods may have maximized this new deal by leveraging his market power. The report from ESPN quoted Tiger as noting the possibility of other offers and the need to review all options before entering into a new contract.
Like Woods, understanding the value of one’s name and image is an important element when considering endorsement deals. Of course, not every athlete may have the world-wide profile of Tiger Woods. In those cases, it can be important to understand the options available for sports merchandising and licensing and how to leverage when negotiating contracts. Many athletes work with attorneys with experience in sports law to maximize their opportunities and potential. Careful negotiations to craft the best possible deal like Woods can set an athlete up for success both now and in the future.
Source: ESPN, “Tiger Woods, Nike close to deal,” Bob Harig, June 3, 2013