Tiger Woods hasn't won a major since he returned to the PGA Tour after resurrecting his career from a personal scandal. However, he has regained the top spot in the world rankings. He's also -- love him or hate him -- a huge money generator for all of golf, not just his sponsors like Nike (NYSE:NKE).
The $15 billion problem
Josh Sens of golf.com pegs the cost of a missing Tiger at 30% of the $68.8 billion golf industry -- or $15 billion. However, it's just a guess based on the impact of Tiger's absence at golf events throughout the years, which usually causes about a 25% to 30% drop in televisions ratings, according to Brad Adgate of Horizon Media.
One thing is certain -- the drop-off is real and it's significant. Online ticket broker Stubhub reported a 20% drop in Masters' ticket prices one day after Woods announced the major was a no-go. Another ticket reseller, TiqIQ, saw an over 60% decline of sales of first-day badges in the secondary market due to Tiger's injury.
Nike wants Tiger back
Marketing research firm Repucom estimated that Nike would lose more than $3 million of "media value" due to Woods' absence at the 2014 Masters. In 2013, he was featured on air for approximately 50 minutes, which translated into $3.8 million in "media value." Without him, Repucom says the sportswear giant will only get about $700,000 of exposure.
The polarizing effect of Tiger
Here's an interesting thing about Woods. Research by Celebrity DBI, Repucom's sports-marketing research division, shows Woods is one of the most recognizable (98% in U.S. and 80% in the world) and least trusted (bottom 5%) celebrity product endorsers. Adam Scott, who won the 2013 Masters, leads the golfing endorsers, winning the trust of nearly 88% of people in the U.S., followed by Phil Mickelson (86%), who did his part to add to this year's Masters' rating woes by missing the cut. Masters' runner-up Jordan Spieth (85%) garnered great exposure for Under Armour (NYSE:UAA) and came in ahead of Nike's other golf pitchman, Rory McIlroy (81%), as a trusted endorser.
People may not trust Tiger enough to buy a product from him, but they sure like to watch him play the game of golf. Whether he wins or loses, drains a long putt or hooks a drive, pumps his fist or slings an expletive, he's good television and he keeps viewers in front of their sets -- and that's good for all of the companies that advertise with and sponsor golf.
Why every advertiser wants Tiger back
This year the weekend coverage of the "Tiger-less" Masters had its worst showing in 20 years, averaging an audience of 8.6 million viewers in 6.4 million homes. The final round had a 7.8 rating, the lowest since 2004, even with future star Spieth vying for Woods' record as the youngest golfer to win a Masters championship. That's a 24% drop from Sunday's numbers in 2013 (10.2 rating) when Scott won and a 35% drop from 2012 (12.0 rating) when Mickelson put on the green jacket.
Not all of that was due to Tiger's absence, but hardly anybody would argue it had a huge impact. In a sense, every company that moves its brand through golfers and golf should be paying some kind of royalty to Woods, or at least praying he has a speedy recovery. Woods is the only golfer who can move the needle on ratings and that's good for companies across the board.
A Foolish argument
You may not like Tiger. You may not trust him. But even a fool can't argue the fact that he's great for the business of golf. In fact, all other "trustworthy" endorsers' value increases about 30% when Woods steps on the course, as he attracts and keeps 30% more eyeballs glued to the television set.