When we last saw Woods, he failed to make the cut at the PGA Championship in August in his fourth tournament back after back surgery in March. The four events included two missed cuts and a withdrawal, capping a disappointing year where Woods finished 201st on the money list with $108,275 and saw his world ranking plummet to No. 24 after starting 2014 ranked first. The 14-time major winner pulled his name from consideration for a captain’s pick for the 2014 U.S. Ryder Cup team.
The Hero deal covers four years and is the most lucrative new sponsorship agreement for Woods since his 2009 infidelity scandal, which cost him his marriage and rich endorsements with Accenture , AT&T T -0.12% and PepsiCo PEP -0.94%. Gillette , Tag Heuer and Electronic Arts have also cut ties with Woods in recent years. Press reports from India put the value of the Hero deal at roughly $8 million a year. Hero CEO Pawan Munjal wouldn’t comment on financial terms, but when asked about the rich price tag, Munjal quipped: “It is Tiger Woods after all.”
Woods ranked sixth in June in Forbes’ annual look at the world’s highest-paid athletes with earnings of $61.2 million. His Nike sponsorship remains one of the biggest in sports with the $28.8 billion-in-sales sportswear giant building a $789 million golf division on the back of Woods.
The foundation for the partnership between Woods and Hero was laid in February when Woods played an exhibition in India hosted by Munjal and also featured Hero-sponsored golfer Shiv Kapur, who is one of India’s most high-profile golfers. Munjal says he was considering a handful of celebrities to help with the global expansion of Hero, but quickly settled on Woods. “I thought he was the best fit for our company. He is one of the biggest global celebrities and cuts across all segments,” said Munjal by phone. “We need to very quickly make the brand recognizable and popular globally. I am very confident that with Tiger, we will be able to do that.”
Munjal has big international plans for Hero. The company will enter the European market in 2015, followed by the U.S. and Brazil in 2016. The latter will coincide with the 2016 Rio Summer Olympics, which Woods has expressed interest in participating. Hero projects to be in 50 countries by 2020 with sales volume of 12 million units, up from current totals of 21 countries and six million units. Munjal expects Woods to play a major role in the global expansion through promoting the brand and advertising across print, TV, digital and social. Munjal says that sales outside of India should reach 10% of the company within 3-4 years.
Hero reported net income of $348 million on $4.2 billion in sales for its latest fiscal year. Analysts expect sales to increase 14% for the latest fiscal year ending in March.
source: forbes.com by Kurt Badenhausen