Tiger Woods means the world to professional golf. GOLF.com's Josh Sens recently estimated Woods' presence is worth as much as $15 billion to the sport, a figure my colleague Chris Brantley discussed in detail. So how much time does Tiger have left? And perhaps more importantly, how can golf survive once he's gone?
A ticking clock
Since 2008, he's had more major surgeries (three) than major championship wins (one). As I wrote earlier this month, his latest back surgery "comes with clear reinjury risk" because he's not young anymore -- he'll hit the big 4-0 next winter.
Although many golfers play past this age -- 15 of the PGA's top 100 money leaders in 2014 are 40 or older -- Woods might not. In the past, he's told the Associated Press retirement will come when his "best isn't good enough [to win]."
Remember, the man has amassed $1.3 billion in career earnings, according to Golf Digest. And despite Woods' infamous marital problems a few years back, he continues to rake in endorsements from companies like Nike (NYSE:NKE) and Rolex. He made over $60 million off the course in 2013 alone.
Financially speaking, little will prevent him from walking away, and if he can't shake the injury bug, it could happen before the end of this decade.
How golf can avoid a 'Tiger Crash'
Herein lies the potential problem for the PGA Tour. If Sens' $15 billion figure is correct, the golf industry could lose up to 30% of its value after Woods retires. For the most part, that's based on past declines in TV ratings and ticket prices when he's missed tournaments. The most recent Tiger-less Masters, for example, saw Sunday viewership fall by almost 25% from 2013.
So how can golf avoid what Sens calls a "Tiger Crash"? The most obvious fix is a formatting change -- more specifically, the addition of a fifth major.
Golf's most popular tournaments are its four major championships: The Masters, the U.S. Open, the PGA Championship, and the British Open. Nielsen reports that in 2013, this quartet gathered an average of 8.2 million TV viewers per day.
|Tournament||2013 TV Viewers (Avg.)|
|The Masters||14.7 million|
|U.S. Open||8.4 million|
|PGA Championship||5.5 million|
|British Open||4.4 million|
|Presidents Cup||2.7 million|
By comparison, last year's Presidents Cup, a biennial non-major, captured about one-third as many viewers. Other events that some consider unofficial "fifth majors," like the Farmers Insurance Open and The Players, typically also fall in this range.
So why do golf's four majors dominate the action? Multi-million dollar purses that attract the world's best golfers are partially responsible, but the answer may be simpler than that: The PGA Tour recognizes each tournament as a championship. Just as success in the NFL is measured by Super Bowl wins, golfers are ultimately judged by major championship victories. Woods' legacy as the best of all-time, in particular, largely depends on if he's able to catch Jack Nicklaus' majors record.
It's reasonable to think, then, that the Tour can improve fan interest by adding an official fifth major. The Players at TPC Sawgrass is an obvious choice because of its reputation and enormous payout -- its purse is $10 million this year, 25% larger than The Masters. Alternatively, the Accenture Match Play Championship is another good candidate because of its head-to-head format. The LPGA officially added a fifth major last year, so there's at least a precedent for the PGA to follow suit.
Finding a new Tiger
To truly avoid a "Tiger Crash," though, golf will need to find a replacement for Woods. It's the only way his fans will stick with the sport after he's gone. The $15 billion in Tiger-centric money can theoretically stay put, but a successor must generate a similar level of hype.
SportsPro Media highlighted the best candidate in its list of the 50 most marketable athletes last year: Rory McIlroy. The outlet wrote, "On the course, McIlroy's pursuit of more majors – both green jacket and claret jug remain elusive – alongside Tiger Woods' parallel quest is undoubtedly one of the most compelling strands of golf's coming narrative."
McIlroy's rivalry with Woods continues to be one of the only story lines in golf. The Irishman's $200 million endorsement deal from Nike adds to his allure, and a 2012 exhibition duel with Tiger passed the torch to McIlroy, at least symbolically.
While his play has been subpar recently -- he's fallen from the world's No. 1 to No. 10 -- McIlroy is still just 24 years old. It's impossible for the PGA to manufacture a superstar, but it's in its best interest to continue to promote McIlroy's majors chase. He's simply more marketable than older peers like Bubba Watson and Matt Kuchar, and gives golf the best chance to replace Tiger.
The bottom line
At the end of the day, there's no way to know when Tiger will retire. But if it's anytime soon, the multi-billion-dollar golf industry could be in for a world of hurt. If the PGA Tour has any hope of avoiding a "Tiger Crash," it will have to find a new, consistently dominant superstar.
In the meantime, it also would be smart to consider adding another major. The boost in TV viewers and ticket sales likely won't offset a $15 billion Tiger-related drop-off, but it still can't hurt. The Masters, for example, likely makes over $200 million in revenue each year, so a fifth major might give golf a nine-figure boost.
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Jake Mann has no position in any stocks mentioned. The Motley Fool recommends Nike. The Motley Fool owns shares of Nike. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.