everyone's writing and talking about Tiger Woods so i thought i would also. my subject is what his endorsement contracts must look like, and i need to say i have never seen one of his. but i have seen many others over the years.
advertisers get into trouble when their celebrity endorsers die or become involved in unseemly activities. some advertisers would like to encourage their celebrity endorsers to be bad; others, like Tiger's, do not. Nike, Accenture, Tag Heur and the like run respectable companies and want respectable endorsers. its about the image.
these advertisers pay a lot of money for Tiger...Nike reportedly pays $30,000,000 a year! that's more than most people make...in 10 lifetimes. how do they control his activities?
bottom line is that they can't. they are not there to watch him all the time, so all they can do is give them selves an out with what is called a morals clause in his contract. that means if the endorser engages in some conduct that is disreputable the advertiser has the right to pull the plug eg, cancel the sontract. it is possible, however, that a celebrity with Tiger's pulling power would refuse to include a morals clause and it is possible that a sponsor hot to get him, and thinking about what appears to be his squeaky clean image, would not insist.
some sponsors have announced they are walking. Accenture is one. it is possible that Tiger would let a sponsor out of its contract even absent a morals clause, or that some other deal was made. for example, lesser payment without use of the ads.
time will tell how this shakes out. my bet is that Tiger will land on his feet in short time and pick up enough quality sponsors to live a prosperous life. they will include morals clauses in future contracts however, and i don't think he'll see the really big bucks for a while. but he will at ssome time. scandal or not, the man's a super star.
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