Gatorade Calls Woods Deal Its First Licensing Partnership
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Gatorade Formally Announces
Marketing Partnership With Tiger Woods |
Gatorade and Tiger Woods formally announced their new marketing partnership, which Gatorade is calling the brand's first-ever licensing deal. The Gatorade Tiger sub-brand will launch in March and will feature three flavors -- cherry blend, citrus blend and grape -- selected by Woods. Golfweek reported in September the deal could be worth as much as $100M over five years (THE DAILY). Woods' agent, IMG's Mark Steinberg, said, "There have been some licensing elements to things we've done. But everything he does with Gatorade is going to be creating new products. It's something Tiger and I and our licensing business have been looking at for some time" (WASHINGTON POST, 10/17). CNBC.com's Darren Rovell noted the licensing deal "means that instead of receiving a one-time straight-up fee" as with endorsement contracts, Woods, like Michael Jordan's deal with Nike, "will get a piece of sales in exchange for being able to use his name and image on the product." Should Tiger's Gatorade product do $150M in retail sales, Rovell estimated that Woods would make more than $11M from March '08-09, based on a 15% royalty from a $75M gross. An upfront fee is "also part of a standard licensing royalty agreement" (CNBC.com, 10/16).
BOTTLE ROCKET: CNBC’s Rovell asked Gatorade President Todd Magazine, "(Gatorade has been) pretty adamant not to put any athlete on the bottle in the past ... Why does Tiger deserve getting on the bottle?” Magazine: "Tiger is one of the world’s best athletes, and we think now is a time for an opportunity for us to break ground once again. Leveraging somebody as amazing as Tiger and somebody who is as accomplished as Tiger, is something that as innovators we’ve done before and will continue to do. We think he’s definitely an athlete who’s worthy of having his picture on the bottle of Gatorade” (“Squawk Box,” CNBC, 10/17), In Chicago, Mike Hughlett reports the drink will be packaged "in a uniquely shaped bottle, with a black label emblazoned with 'Tiger' in sleek white letters." Gatorade Senior VP/Sports Marketing Jeff Urban said the company and Woods began talks in August and added, "Tiger has been on our radar screen for a long time" (CHICAGO TRIBUNE, 10/17).
ANALYSIS: Morningstar analyst Matt Reilly said of Gatorade's deal with Woods, "It's a solid idea, but it doesn't make me do cartwheels in the street. There's a little tinge of desperation [in the face of increasing competition for the brand]" (CHICAGO TRIBUNE, 10/17).
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