Just Done It: Was Nike’s Long Term Investment in Tiger Woods Good Value?

Last week, Tiger Woods and Nike announced they were bringing an end to Woods' remarkable 27-year tenure with the sports giant. This is a milestone moment where one of Nike's athletes, having endorsed the company for almost three decades, has parted ways with the brand.

There could be any number of different reasons why this relationship has come to an end now, including the suggestion that Nike may be moving away from golf altogether. But what’s really interesting is what Nike and Tiger Woods achieved together.

An initial gamble

Nike's decision to sign Tiger Woods in 1996 was, at the time, a bold move. The young golfer was on the brink of superstardom, but the golf world was accustomed to conservative and reserved athletes. Woods, however, was a trailblazer, breaking stereotypes and reshaping the image of a golfer. This calculated risk by Nike marked the beginning of a partnership that would span decades.

Nike founder Phil Knight said at the time of signing, “The world has not seen anything like what he’s going to do for the sport. It’s almost art. I wasn’t alive to see Claude Monet paint, but I am alive to see Tiger play, and that’s pretty great.” 

The value

The investment into Tiger Woods over the 27-year tenure is estimated at a massive $600m. A huge cheque for Nike to have written. But did the investment wash its own face?

Business performance aside for a second. How does the sponsorship investment translate into traditional media value? It’s an almost impossible task. But let’s take one example as a guide. 

Rewind to his chip on the 16th hole at the Masters back in 2005. A shot that is purported to be the greatest in Masters history, perhaps the best golf shot of all time. Wearing his Nike cap and shirt in front of an audience of millions, swoosh, …. The Tiger-endorsed golf ball, also bearing Nike’s iconic swoosh, sat on the lip of the hole for 1.8 seconds before dramatically falling in.

The creative director at Wieden and Kennedy could not have dreamt of a better ad than this bit of unscripted drama. 

At the time, a 30-second spot during the final round of The Masters was priced at roughly a quarter of a million dollars on CBS in the US. The two seconds that Nike’s logo appeared on screen before it fell into the hole amounted to $16,666 in intellectual value each time it was shown, which wasn't just once, it was over 60 times!

Before the night was out, Nike had achieved the equivalent of roughly $1million in ‘free impacts’ from replays of the shot.

Let's assume for argument's sake, the value of that two seconds remains at $17k every year since (I know it isn’t, frequency of message and all that). And that shot is replayed at least four times a day for the four days of every Masters tournament since. This means Nike have gained approximately $5m in media value in the US over the last 18 years JUST from that two second clip of the ball dropping in the hole.

The Masters was broadcast on the BBC in the UK. But if you do the same exercise using an ITV rate card from the time and assume the same replays over time, it equates to a further £3.4m of media value. You could argue those specific two seconds were priceless for Nike.

Now consider the whole clip, inclusive of the swooshes on his shirt and hat. Then add in the replays of the full round. Then his Masters best bits, his career highlights, his media duties, his coverage in the press, millions of views across social and YouTube. The list is endless. And so is the value.

Ignoring my maths and rough estimates, the Nike One Platinum golf balls used in the real life ‘ad’ sold out within a fortnight of Woods’ 2005 heroics.

It was a lucrative moment in time for Nike, but the long term journey has as we know has been equally lucrative. Obviously it’s not all down to Tiger, but the company posted a 1,800% return since Nike signed Woods 27 years ago, double that of the S&P 500.

A long brand game

Is the return on investment measurable? Probably not. But every time Tiger does something incredible on the course, it creates an association between the swoosh on his cap and shirt with excellence, determination, and the ability to perform under pressure. By association with Tiger, it linked the brand with the achievement of unbelievable feats, making it increasingly attractive to an everyday hacker. 

A truly priceless investment. And a long term one. Consistency has been the linchpin of Nike's enduring success with Tiger Woods. Nike's commitment (until now) to Woods through thick and thin has allowed them to stay true to brand values and proposition over a long period. This is how superbrands are built and maintained. They do not flip flop with their communications strategies,they have a horse, or in this case a high performing athlete, and they back it for long periods (see also Jordan, Serena Williams, LeBron James and John McEnroe). 

This consistency in sponsorship and wider comms, has not only built their invincible brand, but also cultivated a narrative of triumph over adversity that resonates with consumers.

Time to cut ties

We will learn in the coming days as to why Nike and Tiger have split. The sponsorship gamble that began in 1996 has undoubtedly paid dividends not just in terms of sales and market share but in the intangible currency of brand loyalty and cultural influence.

The number of Tiger Woods’ in this world are extremely limited. And athlete sponsorship success is never guaranteed. But if you take a risk on an athlete and it pays off, there arguably isn’t a better way to spend your marketing budget. 

Nike in particular, have succeeded through the consistent alignment of their brand with Woods' unparalleled performance, creating a lasting legacy and proving that, in the world of sports sponsorship, the real value lies in the enduring connection between brand and ambassador.