News   Money   Entertainment   Kids   Family Check e-mail
    
ESPN NETWORK:  ESPN.COM | NASCAR ONLINE | ABCSPORTS | FANTASY | THE STORE | INSIDER
ESPN.com

Outside the Lines

Athletes, Dollars and Sense

Tuesday
Troy Aikman makes money from his money

Wednesday
How to spend all $5 million of that signing bonus

Thursday
Tiger Woods may become world's first billion-dollar athlete

ALSO SEE:

A rags-to-riches-to-rags story

Chat wrap: Financial planner and ex-NHL player Derek Sanderson

Watch the re-airing of ESPN's Outside the Lines show on money and athletes July 1 at noon ET, and July 6 at 7 p.m. ET. ESPN The Magazine also takes a fun look at the topic in this week's issue.

Tuesday, June 3
Golf's $6 billion man
Peter Keating
ESPN The Magazine

In 1982 baseball historian Bill James compiled a list of factors that can cause athletes to be overrated: playing in major markets or on championship teams, having good media skills, excelling in statistical categories that fans understand. "If you fed a computer this input," James wrote, "and asked it to pick the perfect overrated player, the computer would tell you: Steve Garvey."

Tiger Woods
Tiger Woods' motto: Drive for dough, putt for dough, chip for dough, pose for dough, wear for dough ...

Well, duh!

I had the same reaction when the editors of The Magazine asked me to determine which sports star is primed to become the most prolific cash cow of all time. Even before the "Pounding at Pebble," I didn't need a computer to figure it out. But if I had the right software, I'd program it to look for an athlete dominant and young, in a sport popular enough to offer big money but safe enough to allow a long career, with a personality that appeals to all kinds of consumers and the savvy to exploit that popularity.

In other words, I'd program it to spit out Tiger Woods.

"Tiger Woods is the perfect earner," says Rick Burton, director of the Warsaw Sports Marketing Center at the University of Oregon. "Think of him as the offspring of Arnold Palmer and Michael Jordan."

Now there's an image. But Burton has a point. In the '60s, Mark McCormack's IMG showed the world how to market a great golfer, and Arnie became the first athletic endorsement machine. In the '90s, Jordan and agent David Falk took MJ global, creating the first athlete-as-mega-business. Now Woods, applying lessons from both, is using his phenomenal popularity to assemble an endorsement empire on his own terms. Explains Mark Steinberg, Tiger's agent at IMG: "We're not interested in contractual relationships. We're interested in business partnerships." Translation: When companies like Nike and American Express use Woods' image -- Steinberg calls them "our licensees" -- Tiger doesn't want the kind of one-time payment he'd get from putting his face on a Wheaties box. He wants a chunk of their business. Jordan started it; Tiger's raising the stakes.

At the same time, Woods is expanding the horizons of golf -- and the pie available for his own future earnings. He's brought so many new fans to the sport -- ratings for the final round of each of the four majors collectively jumped 56 percent the year he broke the Masters scoring record -- that TV networks are throwing money at the PGA. Prizes now total $3.2 million per event, up 87 percent since 1997. If purses keep rising even near this rate, and it's likely they will, the 125th-ranked money winner on the Tour will be making at least $500,000 within five years (last year's No. 125, Charles Raulerson, earned $327,000). That's one reason, perhaps, that Tiger hasn't engendered too much resentment among PGA players. It's hard to get mad at a guy who's lifting everybody's tax bill.

As for Tiger: Already the PGA's career earnings leader at the age of 24, he's likely to earn an amount that will make almost anyone but Bill Gates' heirs jealous. Just how much green are we talking about? Take a deep breath -- better than $6 billion. And I'm being conservative.

Here's how he'll earn it:

PGA winnings: In pocketing $6.6 million on the tour last year, Tiger didn't just obliterate the mark for prize money, he set a new standard for dominance. Woods won 82 percent more than second-place David Duval, a gap larger than any since Byron Nelson and Ben Hogan dominated in the '40s -- and one that highlights Tiger's uniqueness even more dramatically than those 15 strokes at Pebble Beach. After a decade when money leaders typically pulled in about 2.7% of total prizes, Woods earned 5% of Tour pots. And that was no fluke: He's on pace to earn $8.8 million in 2000, or 5.6 percent of total prizes. In figuring his future PGA winnings, I assumed that a) prize money will keep pace with its growth in the '90s as long as Woods is active; b) Tiger will maintain his mastery only until age 30, when his winnings rate will slowly decline until age 50; and c) he will have five dominant and then 10 declining seasons on the Senior Tour. Career PGA winnings through age 65: $1.17 billion.

Worldwide winnings: Tiger earns about 14 percent of his prize money off the PGA Tour. Using calculations similar to the ones above, I added $207 million to his lifetime total.

Appearance fees: Not that tournament organizers like to talk about under-the-table payments, but Woods earned a reported $1 million just to show up for the Players Championship of Europe last year. Figuring that Tiger will command at least that much as long as he's playing, I tacked on a similar gain (percentage-wise) to his future worldwide earnings. That's another $132 million.

Endorsements: Tiger wears Nike from head to toe, and his recent switch from Titleist to Nike golf balls -- gee, could that have happened at a better time for Phil Knight? -- could reportedly net him an extra $40 million over the next five years (he's yet to sign the deal). He has also shilled for American Express, Asahi, General Mills, Golf Digest and Rolex, so even in 1998, a bad year for his Nike merchandise, Woods collected $25 million in endorsement checks. I assumed the Nike ball deal will go through, added its terms to Woods' average endorsement take from 1997 through 1999 and increased the total at a modest 8 percent a year until he hits 30. Then I let his endorsement earnings track his prize money. Result: $4.6 billion.

Grand total: $6,109,000,000.

For more on Peter Keating's analysis of Tiger Woods' future earnings, read this week's edition of ESPN The Magazine.



Copyright ©2000 ESPN Internet Ventures. Terms of Use and ESPN.com Privacy Policy and Safety Information