If it wasn’t for Tiger Woods’ scandalous infidelities, we may have never gotten the announcement we did this morning: the launch of reputation risk insurance.
Launched by DeWitt Stern, the 110-year-old risk management and insurance brokerage firm, the coverage will work to protect brands, corporate entities and advertisers against losses spawned by reputational risk crises. The company’s managing director had this to say in the Insurance Business Review:
“The Tiger Woods scandal shows how quickly reputations can become tarnished in today’s fast-paced media environment,” said LeConte Moore, managing director of DeWitt Stern’s New York City office. “All the planning in the world cannot protect a brand manager against the unforeseen. Reputation Risk Insurance will provide those forward-looking brand managers and advertisers with a smart and attractive way to protect their investments.”
And protection of investments they will need. If Woods sticks to his break from professional golf, it is reported that TV audiences could shrink by up to 50% — which could stick Nike with a $30 million loss in sales. So far, only Accenture, a Dublin-based consulting company, has ended its business relationship with Woods.
The following sponsors (courtesy of Bloomberg) remain supportive:
- AT&T
- Electronic Arts
- Pepsi
- Procter & Gamble
- Golf Digest
- Nike
- The Tiger Woods Dubai
- TLC Vision
- Upper Deck
- TAG Heuer
- NetJets
However, Bloomberg reports that AT&T is “evaluating its advertising relationship with Woods, according to a Dec. 12 e-mailed statement,” Gillette (a Procter & Gamble company) will stop running print and broadcast ads with Tiger, and Pepsi is “talking to his people regularly at this point.”
On the other hand, Nike, Golf Digest and Upper Deck will all rhetorically plan to continue their Tiger-related operations as if nothing happened.
Says Upper Deck:
“Upper Deck will maintain its exclusive agreement with Tiger in both our sports cards and memorabilia categories, and we look forward to his eventual return to the PGA Tour,” Richard McWilliam, chief executive officer, said in a statement Dec. 15. “Tiger and his family have our full support.”
Reputational risk coverage may be too little too late for these companies, as not just Nike, but every Tiger Woods sponsor stands to lose some amount of money from his foolish actions. And as his number of reported mistresses grows every day and talks of divorce swirl, it remains to be seen if Accenture will be the only company to cut their losses . . . and their reputation risk.
The company and Woods announced in October 2008 that the National would be held at the Congressional Country Club in Bethesda, Maryland, from 2012 to 2014, with an additional three- year option for 2015 to 2017. Woods won the tournament in July, collecting $1.08 million.
2. Electronic Arts Inc. The video-game publisher, the world’s second-largest, said Dec. 11 that it has no plans to change strategy related to Woods products. “We respect that this is a very difficult, and private, situation for Tiger and his family,” David Tinson, a company spokesman, said in an e-mail. “At this time, the strategy for our Tiger Woods PGA Tour business remains unchanged.”
In early 2010, Electronic Arts, based in Redwood City, California, will introduce a new online version of the game in which users can play through a Web browser instead of a console. Chief Executive Officer John Riccitiello said earlier this month that it will be an important part of the company’s strategy to expand online sales.
Tiger Woods video games from Electronic Arts have generated $675 million in U.S. sales, according to industry researcher NPD Group Inc.
3. PepsiCo Inc. The world’s second-largest soft-drink maker is in regular communication with Woods’s agents, Massimo d’Amore, chief executive officer of the Americas beverages business, said at a Dec. 14 Beverage Digest Conference in New York.
“We feel very badly about his personal life and we wish him all the best,” d’Amore said. “We are talking to his people regularly at this point.” He declined to specify the nature of the talks.
PepsiCo announced in October 2007 its first endorsement agreement with Woods; the financial terms weren’t disclosed at the time. Before the golfer’s Nov. 27 car crash triggered reports of infidelity, Beverage Digest reported that PepsiCo was discontinuing the Tiger Focus line of Gatorade sports drinks.
4. Procter & Gamble Co. Woods, tennis champion Roger Federer and soccer’s Thierry Henry were signed as ambassadors for the company’s Gillette brand in February 2007. The company said on Dec. 12 that it will stop running Gillette print and broadcast ads featuring Woods. It plans to phase out Web site and retail promotions in coming months, said Mike Norton, a spokesman.
The brand ambassadors were chosen “not only for their sporting accomplishments, but also for their behavior away from the game. They are as much champions in their personal lives as they are in their sports,” Gillette said in the 2007 statement.
5. Golf Digest. Woods became a so-called playing editor at Golf Digest in June 1997, contributing tips and instruction monthly. The work benefits the Tiger Woods Foundation. The publication declined to comment on details of the contract.
“Golf Digest has had a long-standing relationship with Tiger Woods to provide instruction articles for the magazine, and we do not have any plans to change that,” Meg D’Incecco, executive director of public relations, said in an e-mailed statement Dec. 15.
6. Nike Inc. The world’s largest athletic-shoe maker signed Woods to an endorsement contract in December 2006; the financial terms weren’t released. It now pays him about $25 million to $30 million a year to wear its products, with the iconic swoosh logo, Christopher Svezia, an analyst at Susquehanna Financial Group LLP in New York, said in a telephone interview. The company also sells Woods-branded clothing, belts and shoes.
Nike’s golf business generated $648.3 million in sales in the company’s last year ended May 31, according to a regulatory filing. That represents about 3.4 percent of the company’s $19.2 billion in worldwide sales.
The golf division isn’t changing its advertising plans, Beth Gast, a spokeswoman for the Beaverton, Oregon-based company, said in a Dec. 9 e-mail.
7. The Tiger Woods Dubai. Woods designed a golf course for the unit of Dubai Properties Group. “Tiger Woods’s name brings enormous value to the project, and we are proud to share with him some of the key developments that have taken place since he reviewed the project during his last visit,” Abdulla Al Gurg, project director, said in an August 2008 statement, which introduced Woods’s plan for the course.
In a Dec. 15 statement, Tiger Woods Dubai confirmed that “it remains committed to the completion of its centerpiece Al Ruwaya Golf Course, and that progress continues on the first golf course designed by Tiger Woods Design.” The company added that it “does not comment on the personal lives of our valued partners.”
8. TLC Vision Corp. The Mississauga, Ontario-based operator of eye-surgery centers performed corrective eye surgery on Woods in October 1999. It named him as its spokesman in February 2000. The terms of the multiyear contract weren’t disclosed.
“Tiger Woods is important to TLC Vision,” James Hyland, a spokesman for TLC Vision, wrote on Dec. 9 in an e-mailed statement. “Our relationship with him continues without change. This is a private matter and we have no further comment.”
9. The Upper Deck Co. On May 24, 2001, the provider of trading cards and other sports memorabilia signed Woods to a “multiyear, multimillion dollar deal,” the company said in a statement at the time.
A week later, the Upper Deck, based in Carlsbad, California, and Shop At Home Inc. — now Naples, Florida-based electronic retailer Summit America Television Inc. — announced an exclusive licensing agreement with the golfer. The deal made the Upper Deck “the first major worldwide collectibles company to produce Tiger Woods trading cards and autographed memorabilia,” according to the statement.
“Upper Deck will maintain its exclusive agreement with Tiger in both our sports cards and memorabilia categories, and we look forward to his eventual return to the PGA Tour,” Richard McWilliam, chief executive officer, said in a statement Dec. 15. “Tiger and his family have our full support.”
10. TAG Heuer. The Swiss watch maker, part of LVMH Moet Hennessy Louis Vuitton SA, is re-examining its ties with Woods, who has been one of its brand ambassadors. “Over the coming weeks, we will assess our options with Tiger Woods,” TAG Heuer said in a Dec. 15 e-mailed statement.
TAG Heuer signed an endorsement agreement with Woods in 2002, effective the next year, according to a statement at the time. The company has featured Woods in advertising. It also tapped him to help design products including what it says is “the world’s first-ever professional golf watch.”
11. NetJets Inc. The luxury aviation company, which Warren Buffett’s Berkshire Hathaway Inc. acquired in 1998, has listed Woods as a fractional aircraft owner since at least 2001. In the December 2009 edition of NetJets Fast Facts on its Web site, the Columbus, Ohio-based company names Woods among other prominent clients including Federer, Aetna Inc. and General Electric Co. Woods is also part of its “Only NetJets” advertising campaign.
NetJets didn’t respond to requests for comment.1. AT&T Inc. The largest U.S. phone company is evaluating its advertising relationship with Woods, according to a Dec. 12 e- mailed statement. AT&T, based in Dallas, served as the presenting sponsor of the golfer’s annual Tiger Jam benefit concerts in Las Vegas and sponsors the PGA Tour’s AT&T National, hosted by Woods. It began a multiyear agreement in February to place the AT&T logo on Woods’s golf bag.
The company and Woods announced in October 2008 that the National would be held at the Congressional Country Club in Bethesda, Maryland, from 2012 to 2014, with an additional three- year option for 2015 to 2017. Woods won the tournament in July, collecting $1.08 million.
2. Electronic Arts Inc. The video-game publisher, the world’s second-largest, said Dec. 11 that it has no plans to change strategy related to Woods products. “We respect that this is a very difficult, and private, situation for Tiger and his family,” David Tinson, a company spokesman, said in an e-mail. “At this time, the strategy for our Tiger Woods PGA Tour business remains unchanged.”
In early 2010, Electronic Arts, based in Redwood City, California, will introduce a new online version of the game in which users can play through a Web browser instead of a console. Chief Executive Officer John Riccitiello said earlier this month that it will be an important part of the company’s strategy to expand online sales.
Tiger Woods video games from Electronic Arts have generated $675 million in U.S. sales, according to industry researcher NPD Group Inc.
3. PepsiCo Inc. The world’s second-largest soft-drink maker is in regular communication with Woods’s agents, Massimo d’Amore, chief executive officer of the Americas beverages business, said at a Dec. 14 Beverage Digest Conference in New York.
“We feel very badly about his personal life and we wish him all the best,” d’Amore said. “We are talking to his people regularly at this point.” He declined to specify the nature of the talks.
PepsiCo announced in October 2007 its first endorsement agreement with Woods; the financial terms weren’t disclosed at the time. Before the golfer’s Nov. 27 car crash triggered reports of infidelity, Beverage Digest reported that PepsiCo was discontinuing the Tiger Focus line of Gatorade sports drinks.
4. Procter & Gamble Co. Woods, tennis champion Roger Federer and soccer’s Thierry Henry were signed as ambassadors for the company’s Gillette brand in February 2007. The company said on Dec. 12 that it will stop running Gillette print and broadcast ads featuring Woods. It plans to phase out Web site and retail promotions in coming months, said Mike Norton, a spokesman.
The brand ambassadors were chosen “not only for their sporting accomplishments, but also for their behavior away from the game. They are as much champions in their personal lives as they are in their sports,” Gillette said in the 2007 statement.
5. Golf Digest. Woods became a so-called playing editor at Golf Digest in June 1997, contributing tips and instruction monthly. The work benefits the Tiger Woods Foundation. The publication declined to comment on details of the contract.
“Golf Digest has had a long-standing relationship with Tiger Woods to provide instruction articles for the magazine, and we do not have any plans to change that,” Meg D’Incecco, executive director of public relations, said in an e-mailed statement Dec. 15.
6. Nike Inc. The world’s largest athletic-shoe maker signed Woods to an endorsement contract in December 2006; the financial terms weren’t released. It now pays him about $25 million to $30 million a year to wear its products, with the iconic swoosh logo, Christopher Svezia, an analyst at Susquehanna Financial Group LLP in New York, said in a telephone interview. The company also sells Woods-branded clothing, belts and shoes.
Nike’s golf business generated $648.3 million in sales in the company’s last year ended May 31, according to a regulatory filing. That represents about 3.4 percent of the company’s $19.2 billion in worldwide sales.
The golf division isn’t changing its advertising plans, Beth Gast, a spokeswoman for the Beaverton, Oregon-based company, said in a Dec. 9 e-mail.
7. The Tiger Woods Dubai. Woods designed a golf course for the unit of Dubai Properties Group. “Tiger Woods’s name brings enormous value to the project, and we are proud to share with him some of the key developments that have taken place since he reviewed the project during his last visit,” Abdulla Al Gurg, project director, said in an August 2008 statement, which introduced Woods’s plan for the course.
In a Dec. 15 statement, Tiger Woods Dubai confirmed that “it remains committed to the completion of its centerpiece Al Ruwaya Golf Course, and that progress continues on the first golf course designed by Tiger Woods Design.” The company added that it “does not comment on the personal lives of our valued partners.”
8. TLC Vision Corp. The Mississauga, Ontario-based operator of eye-surgery centers performed corrective eye surgery on Woods in October 1999. It named him as its spokesman in February 2000. The terms of the multiyear contract weren’t disclosed.
“Tiger Woods is important to TLC Vision,” James Hyland, a spokesman for TLC Vision, wrote on Dec. 9 in an e-mailed statement. “Our relationship with him continues without change. This is a private matter and we have no further comment.”
9. The Upper Deck Co. On May 24, 2001, the provider of trading cards and other sports memorabilia signed Woods to a “multiyear, multimillion dollar deal,” the company said in a statement at the time.
A week later, the Upper Deck, based in Carlsbad, California, and Shop At Home Inc. — now Naples, Florida-based electronic retailer Summit America Television Inc. — announced an exclusive licensing agreement with the golfer. The deal made the Upper Deck “the first major worldwide collectibles company to produce Tiger Woods trading cards and autographed memorabilia,” according to the statement.
“Upper Deck will maintain its exclusive agreement with Tiger in both our sports cards and memorabilia categories, and we look forward to his eventual return to the PGA Tour,” Richard McWilliam, chief executive officer, said in a statement Dec. 15. “Tiger and his family have our full support.”
10. TAG Heuer. The Swiss watch maker, part of LVMH Moet Hennessy Louis Vuitton SA, is re-examining its ties with Woods, who has been one of its brand ambassadors. “Over the coming weeks, we will assess our options with Tiger Woods,” TAG Heuer said in a Dec. 15 e-mailed statement.
TAG Heuer signed an endorsement agreement with Woods in 2002, effective the next year, according to a statement at the time. The company has featured Woods in advertising. It also tapped him to help design products including what it says is “the world’s first-ever professional golf watch.”
11. NetJets Inc. The luxury aviation company, which Warren Buffett’s Berkshire Hathaway Inc. acquired in 1998, has listed Woods as a fractional aircraft owner since at least 2001. In the December 2009 edition of NetJets Fast Facts on its Web site, the Columbus, Ohio-based company names Woods among other prominent clients including Federer, Aetna Inc. and General Electric Co. Woods is also part of its “Only NetJets” advertising campaign.
NetJets didn’t respond to requests for comment.
As the report states, there are more than 200 million children working throughout the world, many full-time. Of these, 126 million are exposed to hazardous forms of child labor. As we have seen, many big-name companies have been accused of using child labor, and though they’ve taken many steps to correct their ethical violations, the reputation damage still lingers — and may do so forever.