As Tiger Woods decides to take time off for a major operation and reconstruction surgery on his knee, its worth reflecting on his impact on Golf not only as a player but as a person and a business phenomenon. His success in the US Open was merely the latest example not only of his ability as a golfer, but his capacity to transcend assumptions and confound his critics. He breaks barriers, almost at will and reaches groups far beyond the golfing community.

Football Mad?

Tiger Woods in the British Open on Merseyside last year vividly illustrated not only his golfing prowess but his ability to reach people and communities far beyond the groups usually associated with golf.

The Liverpool Daily Post’s report of shouts of “come on, Tiger la” as he approached the final green suggests that the record crowd of 230,000 included large numbers who did not usually grace the Royal Liverpool’s fairways. The ability of Tiger Woods to take golf to new horizons reflects not only his success as a golfer, but his unique economic and social reach at a time, when sport generally and golf in particular is facing major changes in the UK and globally.

The Tiger Economy

Holding British Open at Royal Liverpool for the first time since 1967 vividly illustrated the changes in the game over the last forty years. The crowd of 30,000 in 1967 would easily have fitted into Liverpool or Everton’s soccer grounds, while this year’s 230,000 would swamp the ground capacity of all the North’s footballing giants – despite Old Trafford’s recent expansion.

The UK’s golf economy of £3.250 billion (roughly $6bn) is only rivaled by football and racing. Even they struggle to achieve the reach of golf with roughly a million golfers registered with clubs and a further five million occasional players in a sport where women are increasingly important as players, spectators and consumers and age is not the barrier - at either end of the scale – found in other sports.

The UK, in turn, is a relatively small part of a global golf economy of $40bn and 50 million golfers. With a reach from the USA, across Asia, through the Middle East, Europe and back to the USA. It is, therefore, all the more remarkable that a single individual can achieve the prominence and success – on a world stage – that Tiger Woods has achieved.

Breaking Records

Little wonder that two of the most influential business magazines in the world have explored two sides of the Tiger (Woods) economy. Forbes recently placed him at No 5 in its Celebrity 100 of high earners and key influencers. Even more remarkably, he is easily in the youngest in a ranking that puts only Tom Cruise, The Rolling Stones, Oprah Winfrey and. U2 ahead of him and trails Stephen Spielberg, Paul MacCartney and the “cast of the Sopranos” in his wake. Little wonder that, in a different vein, Fortune ranked him second in its list of People We Envy Most.

This was partly because “this guy’s ‘job’ is something that many would lie to their boss and step over their sick wife to do. For another, even though Tiger made more than $8.6 million at ‘work’ this year, those earnings pale in comparison with his endorsements. Deals with companies such as Buick, AmEx, Accenture and Nike–which drool over a clean-cut, multiracial superathlete … As if that weren’t enough: By age 40, the world’s No. 1 golfer should be a billionaire.” This view of Tiger’s earning potential is confirmed by Golf Digest which predicted that he’d reach billionaire status by 2010, before his 40th birthday.

Economic Power and Influence

It is hard to compare Tiger with any other sports man in terms of either sporting success or financial impact. His success at the British Open saw hardened media commentators reach for the superlatives. John Hopkins in the Times described him “as the most complete strokeplayer in the game at present (with) the best short game, rich with imagination and bravura …(and) power that he often wields with clubbing force. Mike Steinberger of the FT described “the divinely talented American” as “(arguably) history’s greatest player.”

Only five other sportsmen or women join Tiger in the Forbes top 50 Celebrities. His earning power exceeds Britain’s top sports earner – David Beckham by a factor of 10!

Some time ago a team from the Financial Times including David Owen, and Richard Tomkins described Tiger as a “Marketing Phenomenon” a characteristic that has increased over the last few years. In the USA, Forbes reports that his endorsement of a new Nike driver, the SasQuatch, helped it more than doubled the market share gained by Nike’s 2004 Ignite driver in its first two months.” Across a range of products and services, the link with Tiger has driven up awareness, interest, sales and market share. Nike, for example, has used the link with Woods to create a major, global golfing franchise worth $billions including the largest golf apparel company in the world.

In the UK and Ireland

Just as the British Open demonstrated Tiger’s qualities as a golfer, the event illustrated his appeal and market power. The local press in Liverpool caught some flavour of this when they said “among the thousands of people thronging Royal Liverpool were many attracted to the event to catch a glimpse of the great man … they weren’t disappointed. They came in their droves and saw their hero conquer the golfing gods again.”

There is scarcely an aspect of the golf economy that is not affected by this effect. The most obvious is the attendance at events in which Tiger participates. The estimated 30,000 extra visitors on the Championship days accounted for by Tiger’s attendance was worth the best part of £2 million, without any addition for the related travel, hospitality and related boost to the local, regional and national economy.

We’d estimated that the gross effect over Tiger’s participation during 2006 in in the HSBC World Match Play , the Ryder Cup at the K-Club and then the World Golf Championship at The Grove was around £7million.

The Big Money

The big money in golf, however, lies elsewhere in sponsorship; hospitality; equipment and clothing sales; media interest and ultimately club memberships, course fees, catering & residential, retail, tuition and the host of other activities that make up the Golf economy. The Tiger effect influences all of these.

Outside of event attendances sponsorship and hospitality are most immediately affected not only for the events in which Tiger competes but in affecting the profile of golf and the returns on sponsorship and hospitality across the sector.

Golf is generally regarded as an unusually effective venue for sponsorship and event or game related hospitality. This partly reflects the dynamics of the event; with considerable scope of relatively long periods of time for networking and relationship building and partly the nature of the golfing community. This tends to be higher up the social scale, with more control over assets and resources than other major, professional sports.

The immediate effect “the great man” effect on sponsorship and event or game related hospitality during the British Open was around £2.5 million. The halo effect on other events, was estimated to add a further £1m. Projecting forward a gross figure of £7 million is not unreasonable.

The Cornerstone of the Economy

The cornerstone of the Golf Economy lies, of course, in club membership and the related course fees, catering & residential, retail, tuition and the host of other activities. There is burgeoning evidence that Tiger is unique in his short and medium term effect on all of these activities.

He influences not only absolute levels of interest, but interest among key social economic, cultural and ethnic communities. There are two sides to this. First, he shifts the popular image of golfers. Second, he engages the interest of non-traditional golfers – at least in the UK.

Evidence gathered to date suggests that enquiries about membership of golf clubs and tuition increased sharply in the two weeks following the Open in 2006 compared to other, recent years. A similar effect was observed last year, but dropped off sharply. We believe that the additional reinforcement of his longer stay during September 2006 changed this.

We estimate that the number of registered golfers (club members) and casual golfers will increase sharply throughout September with the reinforcement of three events helping to sustain involvement at record levels. The gross effect of the golf economy we put at around £100m during 2006-2007.

Preparing the Ground

The golf economy over the last decade or more has been dramatically affected by equipment and clothing sales. It is here, also, that the Tiger economy effect has been most noticeable as outlined above. Golf is relatively unusual among mass participation sports in the relatively high cost of entry into the game. Kitting out an amateur golfer with clubs, specialist footwear other clothes etc. costs roughly 10 times the amount required for the next most expensive mass participation sport (excluding club memberships). The Tiger effect on the golf economy operates on two levels. First it affect participation regardless of clubs, specialist footwear other clothes purchased. Second it affect brand choice.

The Medium and the Message

In many ways the most dramatic aspect of the Tiger economy can be seen in the extent, nature and form of media coverage for golf, the events and venues in which Tiger Woods participates and wider aspects of his position in the community. The clearest example of his personal impact on the extent of TV coverage emerged in the TV figures for the PGA tour Western Open (July 2006). This showed that Tiger attracted a TV audience rating of 8.7 on the Sunday from 4 – 6pm, when he was in contention, versus only 1.9 on the Saturday and 7.7 for the FIFA World Cup Final.

His impact on TV audiences is remarkable. His win at the British in 2000 produced the Open’s best-ever TV audience. His win in 2005 produced weekend ratings that were up 25 percent from 2004, when Todd Hamilton won, while the Open at Royal Liverpool exceeded these figures especially during the emotional finale to his win. His emotional outburst was repeated throughout the next twenty hours.

A similar pattern can be seen in the print media especially in the scale of coverage which saw him share the front page of broadsheets and tabloids, locally and regionally. The purchase value of this net additional space and its positioning is difficult to estimate as many factors need to be taken into account – not least the specific issues around the British Open 2006 notably Tiger’s loss of his father. In some ways, however, it is nature of the coverage, which most differentiates the Tiger effect. He takes Golf off the inside back pages onto the back and front pages, while his achievements prompt editorials and Op Ed features, which reach wholly new audiences for Golf.

Diversity

In part the reach and nature of the coverage reflect unique features of Tiger himself and distinctive aspects of the sport in Britain. Woods refers to his ethnic make-up as Cablinasian (a portmanteau of Caucasian, Black, American-Indian, and Asian), a term he made up himself. Woods’ father, Earl Woods was, of mixed Black, Chinese and Native American ancestry. Woods’ mother, Kultida Woods, is originally from Thailand, and is of mixed Thai, Chinese, and Dutch ancestry. This makes Woods himself one quarter Chinese, one quarter Thai, one quarter African American, one eighth Native American, and one eighth Dutch.

In sharp contrast with the rest of the world, UK and Irish Asians and those of African and Caribbean origin have low participation in golf. Golf is China’s second fastest growing sport (after soccer), and now ranks now ranks fifth in the world and second in Asia in terms of the number of golf courses. For the new entrepreneurial classes, it is the sport of choice. In the UK, successful Chinese have little involvement at any level, despite being the most successful entrepreneurial community with 2.6 times as many business owners as the majority population.

A similar pattern can be seen in the those of South Asian origin (from the Indian sub-continent through to Malaysia and Thailand). In countries such as India, Malaysia and Thailand, golf is a major focus for business and social networking among the ambitious entrepreneurial communities. Little of this has penetrated the UK’s large and dynamic South Asian entrepreneurial communities.

Tiger’s Layoff

It is impossible to predict the impact of Tiger’s enforced layoff on his game. It is, however, easy to predict that not only will the competitions he misses be losers, but so will the wider game.

Filed under: Golf by Tom Cannon