More on the Amex-Woods split
It’s been a busy week for Tiger Woods. But then again, when is it not?
Yesterday, Woods, the world’s number one ranked professional, captured the World Golf Championships-Bridgestone Invitational for the sixth time at Firestone Country Club in Akron, Ohio, with an eight stroke victory over England’s Justin Rose and Rory Sabbatini of South Africa. In doing so, Woods extended his lead in the world rankings over Jim Furyk to 11.52 average points in the Official World Golf Ranking. And while Tiger was dispatching of Sabbatini (the latest in a long litany of victims who have called out Tiger and then subsequently, and promptly, been squashed in kind), he was winding up another walloping, this time over Lebron James of the NBA’s Cleveland Cavaliers in the final installment of ESPN’s “Who’s Now” contest.
However, in a bit of a surprise to some in the golf industry, Woods and American Express (Amex) parted ways, as Amex formally committed to changing its marketing strategy and becoming more “consumer oriented” by signing an endorsement deal last Friday with The PGA of America (which runs the PGA Championship and Ryder Cup and has a membership of 28,000 teaching professionals), while concurrently and “mutually agreeing” with the Woods camp (through his IMG agent Mark Steinberg) not to negotiate another deal. “It was a good 10-year run,” Steinberg said. “I know that sounds like a cop-out, but this was one of those deals that had run its course. If they wanted to be more consumer-driver, that might require more of Tiger’s time. And it still might not hit the right demographics for them. We talked about doing something smaller, but why downsize?”
Amex Vice President Rich Lehrfeld is quoted as saying that that while the company’s relationship with Woods is still “strong,” the company’s vision has changed gears and become even more geared toward consumers “[Tiger] brought a lot of value to Amex. He’s an incredible athlete with an incredible work ethic, and that runs well with what our brand is all about,” Lehrfeld said. “[But] sometimes strategies change. We wanted to move our dollars to build a broader base of consumer experiences.”
Huh? Amex wants to connect with consumers by severing ties with Tiger? How does that make sense? After all, Tiger Woods is a marketer’s dream. Woods’ Q rating makes even David Beckham blush, and according to the similarly constructed Davie Brown Index (DBI), an independent index for brand marketers and agencies that determines a celebrity’s ability to influence brand affinity and consumer purchase intent, Woods ranks consistently in the Top 10. Furthermore, the Woods-Amex relationship is deeply rooted: Woods had previously twice signed five-year endorsement deals with Amex, who was also title sponsor of a World Golf Championship event that Woods won five times on five different courses.
So what gives? Is golf’s $6 billion man finally starting to price himself out of certain markets? Is his return on investment not in sync suddenly with the proverbial corporate balance sheet? Or does the Amex mantra about “strategy” hold water? What demographics exactly is Amex striving for that Tiger can’t help them reach?
Amex’s deal with the PGA of America comes on the heels of its agreement last November to become the first corporate partner of the USGA. Furthermore, corporate partners with golf organizations have started to become commonplace, as both Amex and Lexus have deals with the USGA, while The PGA of America last week also announced a similar deal with Royal Bank of Scotland (RBS). These deals allow members of both Amex and RBS greater access to golf organizations and their events, such as first rights to Ryder Cup tickets (starting next month), and also one-of-a-kind perks such as the one presented to Amex cardholders this past spring at Oakmont Country Club outside of Pittsburgh (site of the U.S. Open in June), where the company allowed 82 select card members to play the course just two months before the championship, and then tag along as Woods played a practice round and explained to members how he prepared for majors. The event was a hit with both the wealthy and lucky few, as well as with Woods, whose amicability and suave demeanor draws comparisons to the young Arnold Palmer (and it was Arnie’s famous “handshake” deal with the late Mark McCormack in 1960 created IMG and changed the landscape of sports marketing and representation forever).
However, Amex should be worried about losing Tiger. Expensive or not, the long term opportunity cost of not having the Woods brand in its tow may turn out to be more costly than initially it would have been to keep him under contract. Moreover, you wonder how “Team Tiger” is taking the separation. Maybe not so hard. A new ad campaign for Gillette, with soccer great Thierry Henry (recently signed by Barcelona FC) and tennis champion Roger Federer (one of Tiger’s best friends, coincidentally) recently debuted on television. And there’s no evidence that the Amex-Tiger split won’t just be chalked down to business as usual. But it’s arguably bad business. And as Rory Sabbatini can duly attest, you take on (and miff) Tiger at your own peril.
– Jason G. Wulterkens