Commentary

Rory McIlroy, suitors face challenge

Updated: October 30, 2012, 4:43 PM ET
By Darren Rovell | ESPN.com

It's official. Rory McIlroy is no longer with Titleist and the golf world seems to think that a big deal with Nike is next.

It would make sense. Tiger Woods is on the backstretch of his career and McIlroy is the young gun who has proven himself the most over the past couple of years.

Winning a major and deciding to play his golf on the PGA Tour, which wasn't always a foregone conclusion, makes him even more marketable.

If we are to assume the Nike deal will happen, there's a question as to how much Nike will get and what terms the company insists on.

With a player of McIlroy's caliber, it's usually the whole deal -- head to toe with no other branding. That would take some clearing out of what endorsements he already has, including Oakley clothing and a big sponsorship with Jumeirah.

An Oakley spokesperson told ESPN.com via e-mail that the company was still in negotiations with McIlroy and could not comment.

Then there's the question of credibility. When the numbers come out, how is the golfing public to believe that McIlroy made the switch because Nike was better? The world's largest shoe and apparel brand's strategy with Tiger was to announce that the terms of Tiger's deal don't require him to play with a Nike ball or clubs. It worked to some extent, though it backfired slightly when Tiger had trouble with the driver.

Equipment obviously is not to be taken lightly. It has happened more in the tennis world than in golf, but endorsement deals have been undone -- most recently James Blake and Maria Sharapova with Prince -- when companies have products that athletes think they can't win with.

Would the same type of clause have to be written into McIlroy's contract? Perhaps, and here's why. Nike rode Tiger to build Nike golf into a legitimate brand with real sales. But the problem is that the company hasn't been seen as a leader. If anything, Nike has underperformed in the golf innovation space as compared to the other sectors of the sports business. So if Nike thinks it's going to take something radical to grab a significant share of a part of the golf business, McIlroy might need to protect himself.

Why is it that the only category that Nike has a healthy share in is apparel? Because people know that a Nike shirt is top-notch. They are used to wearing the swoosh. And many people who wear Nike golf shirts do not play golf.

But if this deal comes to fruition, McIlroy has to become more than a model who wins on Sunday. He has to win and Nike has to put products into the marketplace that can give it a better chance.

Titleist doesn't seem to have an issue with letting McIlroy go. The company has been successful before in losing big stars like Tiger and Phil Mickelson. And the reason Titleist can do this is because it has successfully marketed that more pros play its ball than any other. The second part of that equation, which is often forgotten, is the consumer really believes that it's the best.

[+] EnlargeRory McIlroy
Hong Wu/Getty ImagesWherever Rory McIlroy lands in terms of a club manufacturing endorsement deal, he'll likely pocket one of the biggest contracts in all of golf.

[+] EnlargeRory McIlroy
Hong Wu/Getty ImagesWherever Rory McIlroy lands in terms of a club manufacturing endorsement deal, he'll likely pocket one of the biggest contracts in all of golf.

When a first-time golfer walks into a store to buy his or her first set of clubs, Nike -- thanks to Tiger -- has been in the conversation. But too often than not, the big golf-only brand names -- Callaway, Titleist, TaylorMade and Ping -- win out. When Nike does sell, and the company does well enough to be among the pack in most categories, it seems it loses the battle too often when the golfer comes back to buy a second generation of clubs. This is not unlike the Under Armour football cleat phenomenon, in which young kids bought UA cleats in their first year on the market because of great branding, but in Year 2, a bunch didn't return.

There's also the aspirational quality, which naturally exists in all of us. Even if we are a first-time golfer and need the equivalent of "Fisher-Price My First Clubs," we try to be more sophisticated because it makes us feel better about what we hope to achieve. Nike has managed to convince us that almost everything it makes could make us better, but in golf, consumers haven't exactly bought the fact it's not just piece of metal with a swoosh on it.

There's a lot at stake in the business because much of the sales are accretive, meaning that a golfer is more likely going to buy woods of a certain brand if he or she has already bought the irons. Nike hasn't been winning at that game and it's why TaylorMade has been so hard to beat in those two categories.

If this deal happens, there will be greater focus on the pressure on McIlroy to maintain the success of Tiger, who obviously hasn't given the brand the same boost over the past three years. But golf business insiders know the truth and that is that there's more pressure on Nike to put something in McIlroy's hands that will not only allow him to continue to win, but will convince those who watch him that what he plays with really is the best choice.

Darren Rovell | email

ESPN.com Sports Business reporter

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