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Wednesday, August 25, 1999 Published at 11:51 GMT 12:51 UK


Business: The Economy

Woods holes $90m

Nike pays a lot of money for a little "swoosh" on Tiger's cap and shirt

Beating little balls with big sticks can be a profitable business. For Tiger Woods, the world's number one golf player, it is worth $90m over the next five years, and that is just the money he will get from his main sponsor Nike.

Other companies like Rolex and American Express add to the revenue stream, and then there is the money from his regular work, playing golf. This year he has earned some $3.27m so far.

The winning streak

From the very beginning of his career, Tiger Woods has been making big bucks. In 1996 sportswear manufacturer Nike gave him his first five year contract, worth $40m.


[ image: When Tiger Woods won the US Masters, Nike's multi-million dollar investment paid off]
When Tiger Woods won the US Masters, Nike's multi-million dollar investment paid off
Since then, he has won the 1997 Masters and this year's US PGA Championship, popularising the sport among younger generations not only in the United States but abroad as well.

All this makes Tiger Woods so much more valuable to his sponsors, and Nike has done much to use this asset for advertisements.

Sponsor trouble

That, however, has got Woods into trouble with one of his other sponsors. In a recent Nike television spot, Woods was seen bouncing a golf ball off a club head. Viewers could have perceived this as an endorsement of Nike's new golf ball.

Woods, however, has an exclusive contract with Titleist to play its clubs and balls, worth $4m.

The Titleist management was miffed, sued Nike for contract violation and reportedly cut its payments to Woods in half.


[ image: Michael Jordan, the best-earning athlete in the world]
Michael Jordan, the best-earning athlete in the world
Nike stepped into the breach and now pays Woods $18m a year for the next five years, while the deal with Titleist was "restructured" to reflect his new commitments.

All three parties have now settled their disagreements, and Mark Steinberg, the agent who handles Wood's affairs, said there would now be "no lawsuits and no damage to Tiger Woods, Nike or Titleist".

The golf billionaire?

Three years ago, Nike chairman Phil Knight predicted that Woods could become golf's first billionaire appears to be right on track. At this rate, his forecast may come true.


[ image:  ]

But Tiger Woods is not the top earner yet. In the last available ranking of the big money makers in sport, compiled by Forbes magazine for the year 1997, he made it to number 6, while basketball player Michael Jordan ruled supreme.

Jordan, another Nike athlete, earned a staggering total of $78.3m through a combination of sponsorship deals and his appearances on the basketball court. His resignation from the sport will force him to drop out of the ranks of the top earners soon.

But when he was playing ball, lending his name to products made Jordan actually more money than his player's salary.

Others are not so lucky - and marketable. The big bad man of boxing, Mike Tyson, had not a single sponsorship deal, but earned $27m through prize money.

Making his mark in a less violent sport, Tiger Woods is still young enough to beat Michael Jordan's record - especially as most golfers manage to play at the top level for 20 years or more.



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