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Tiger Woods: What Should Sponsors Do?

Tiger Woods announces that he will make his first public appearance in three months on Friday, and is expected to announce his return to golf.
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(Tiger Woods story updated with insight from second Electronic Arts analyst.)



) --

Tiger Woods

is expected to announce his return to professional golf on Friday, in what would be his first public appearance in three months.

According to an emailed statement by Woods' agent and spokesman, "Tiger Woods will be speaking to a small group of friends, colleagues and close associates at 11:00 a.m. EST Friday at the TPC Sawgrass Clubhouse in Ponte Vedra Beach, Florida... Tiger plans to discuss his past and his future and he plans to apologize for his behavior."

Ponte Vedra Beach, Fla., is also the home of the PGA Tour.

No questions will be permitted at the meeting, according to the Associated Press. "This is not a press conference," the AP quoted Mark Steinberg as saying Wednesday.

Woods is returning to golf after announcing an indefinite hiatus from the game when he publicly apologized for his "transgressions" on Dec. 2 amid what were, at the time, mere rumors of marital infidelities.

Those rumors, and Tiger's absence from golf, had prompted several large corporate sponsors like


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to drop their deals with the golfer.

Still, others have stood by him, including


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Electronic Arts


. And now, how those sponsors will respond to Woods' return to the spotlight will likely be of intense interest to shareholders of those companies.

"I think they'll work him back into the campaign based on what he says

on Friday and based on how well he plays and how he's received," Sam Poser, an analyst at Sterne, Agee & Leach says of Nike. Poser expects that Nike would love to have Tiger fully back in its photos and marketing campaigns again, but expects that the company will do it in a very measured and delicate way.

In other words, those decisions will unlikely be made today or tomorrow.

"Tiger controls a lot of it. If he comes back contrite enough and plays well then I would expect to see them

Nike get back in

In fact, curiosity over how Tiger handles himself once he's back in the public eye and on tour again will be in and of itself be a major source of audience interest that could benefit sponsors like Electronic Arts, says one analyst.

"There's a lot of curiosity, and

Electronic Arts can leverage this to its advantage," Mike Hickey of Janco Partners says.

As talks about Woods' return to golf emerges, Hickey believes that Electronic Arts will gladly keep its current licensing partnership with Tiger to use his name for its games, for several reasons. First, the video game demographic has been pretty forgiving of scandals like those of Tiger.

Next, Hickey says it not easy to find another game with a caliber of quality that measures up to those from EA's Tiger Woods game franchise. Also, if EA had expected a dramatic impact on its games sales due to the scandal, the company wouldn't have continued its licensing agreement with Woods, Hickey points out.

"They feel that the relationship is still positive for the games' future," Hickey says. "At end of day he's still one of the best golfers of all time, so why break the link" over a short-term matter?

Sterne Agee analyst Arvind Bhatia says that the Tiger Woods brand still provides EA's golf games with a meaningful lift despite the scandal -- that is, a 100% lift. Bhatia said that hardcore video game golfers will continue to buy the game regardless. The only real impact he sees from the scandal is gifts -- for example during the Christmas season, after the scandal broke out, people may have had second thoughts about buying the Tiger-branded golf games as a gift.

"What they care about is Tiger Woods the golfer," says Bhatia of EA. "If his golf prowess takes over all the negative stories out there, it will be positive for Electronic Arts."

Meanwhile, one study shows that consumer behavior towards Tiger-endorsed products are unlikely to change despite the recent events.

Indeed, market research firm NPD Group recently conducted an online study of 44,000 consumers that showed that most consumers do not plan any change in their purchase behavior based on the the recent news, while one-third of those surveyed said their opinion of Woods has significantly declined. A mere 5% of consumers told NPD that they plan to cut back or eliminate any purchases of products Woods endorses.

NPD said that the majority of those planning to cut back came from the 55-plus age group. It added that, in an interesting twist, 2% of consumers that have purchased a Tiger Woods endorsed product stated they plan to actually buy more. These respondents came primarily from the younger consumer demographic.

All in all, 23% of those surveyed say they have purchased Woods' endorsed products.

-- Reported by Andrea Tse in New York


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