Will Rory McIlroy Ever Be as Marketable as Tiger Woods?

Rory McIlroy is the hottest name in the golf world. But will sponsors ever love him to the same degree as Tiger Woods?

Aug 13, 2014 at 10:01AM


Tour Pro Golf Clubs, Flickr.

Rory McIlroy is on the verge of replacing Tiger Woods as the face of golf, if he hasn't already. The Irishman won the PGA Championship this past weekend, his fourth major victory and second in a row. But while he is the sport's unequivocal alpha male, McIlroy is far from it in terms of marketability. Forbes reports he made $20 million from sponsors last year, less than half what Woods took in. Will his paycheck ever be on par with his dominance on the links?

Tiger is still the world's most marketable athlete
At his mid-2000s peak, Woods regularly brought in more than $70 million in endorsements . Now older, oft-injured, and plagued by the ghost of an infidelity scandal, he still made $55 million from endorsements in 2013. That's more than LeBron James, Roger Federer, Cristiano Ronaldo, and any other athlete on the planet, according to Forbes.

An exact breakdown is unknown, though it's widely accepted that Woods' biggest sponsor is Nike (NYSE:NKE), whom he's been with since his rookie year on the PGA Tour. Estimates of his annual pay from the apparel maker range from $20 million to $40 million, ESPN says. The remainder of his income comes from a variety of partners, including Rolex, NetJets, Upper Deck, MusclePharm, and Kowa. 

As for the reason why Woods is so marketable, that's up for debate. Athletic dominance is an obvious factor -- he spent 281 straight weeks atop the Official World Golf Rankings. Excitement is another -- Woods can boost a tournament's ticket prices and TV viewership by as much 25%.

Just as important, his multicultural background also differentiates him from competitors. As Detroit Free Press writer Jamie Samuelsen explains, "Woods is unique in the golf world. And despite all the talk that his dominance would open the doors to a new breed of golfer, the sport remains very white. Whenever there's a unique athlete, he will stand out."

Can McIlroy equal that?
Assuming he is at or near his peak, McIlroy is pretty close to Woods in terms of performance. He's now just the third PGA Tour player to win four majors before the age of 26, after Woods and Jack Nicklaus. Fans are also on board, as a recent ESPN poll reveals 70% of respondents are "rooting for [him] to be as dominant or nearly as dominant as [Tiger]." 

Further, McIlroy also has a major endorsement contract with Nike, which signed him early last year -- Forbes pegs its value at more than $10 million per year. Other major sponsors include Omega, Bose,  and Banco Santander. And with sustained success over the next few years, McIlroy could either add to his stable of lower-level sponsors, or boost the value of his Nike arrangement. Some experts already believe this is in the works.

"[W]ith his elevation to the top of the tree of global superstars, [his commercial deals] should rapidly increase over time," a director with Pembroke Communications told the Irish Independent recently. He added: "Sponsors will trip over themselves to be associated with him and [when] bonuses kick in ... he could earn in excess of €40m [$53.5 million] alone in commercial partnerships per annum in the coming years."

What's next?
As The Motley Fool has discussed, golfers are generally more marketable than athletes in other sports. There are several reasons for this, including: an affluent fan base, the length of players' careers, and the fact that golf, unlike team sports, is centered on individuals.

Given this, and McIlroy's recent dominance, sponsors looking to get into golf may decide to pay him millions. Or, more likely, companies that already have a strong presence in the game could add to his endorsements. Nike already did -- IBM, AT&T, Daimler's Mercedes-Benz, FedEx, and Konica Minolta are just a few other PGA advertisers who could join in.

On the flip side, this future is no certainty. It remains to be seen if McIlroy can single-handedly attract viewers to a tournament in the same way as Woods. So far, he hasn't. The 2014 Masters, for example, was Tiger-less, and drew 28% fewer viewers than the year before. While McIlroy's latest PGA Championship victory saw a ratings boost of nearly 40%, multiple stars were in contention. 

After the tournament, ESPN's Darren Rovell summed up the issue in a tweet:

Question in the golf world is, how many guys (Rory, Rickie, Phil) do you need in the hunt on a Sunday to = Tiger effect?

Until McIlroy is the only answer to that question, he may never be as marketable. But in a sport filled with young talent, the 25-year-old has the best chance to fill Tiger's shoes.

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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.

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't 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.

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