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« The Maiden Is Back! | Main | 2011 Open Championship Second Round Open Comment Thread »
Friday
Jul152011

Fortune Finally Does Math And Declares Forbes Tiger Endorsement Numbers Stink!

You may recall back on June 3rd after Forbes released its annual listing of top athlete income at $75 million, I questioned the math based on reports from IMG that the agency income from Tiger Woods endorsement deals had fallen to just over $1 million.

Well Daniel Roberts at Fortune has an IMG source talking and voila, he says the Forbes number was wildly inflated and Tiger's current endorsement haul is more like $20 million annually post-accident.

IMG declined to comment on the details of Steinberg's departure, or on Tiger Woods, but a trusted Fortune source with reliable information tells us that IMG was none too broken up about losing Woods, because his endorsement earnings have fallen so dramatically. The source says IMG's commissions for 2011 -- they'll continue to get a chunk of Tiger's endorsement deals through 2013 -- will be as low as $1.5 million.

Besides the companies that dropped Woods, he may have a renegotiated deal with Nike.

But our source also tells us that Tiger's Nike money fell by as much as 50% in 2010 (to about $10 million, down from $20 million in 2009) and that he will get the same reduced amount for 2011. The reason? Nike penalized him for his indiscretions, reducing his payment for two years as a response to his public behavior. Nike had no comment.

This is a bizarre quote from Steiny...

Woods' agent adamantly denies the assertion that the golfer is facing financial strain. "Tiger Woods is financially sound and strong, contrary to wide-ranging rumors and inaccurate figures in the media," Steinberg wrote in an email. "Stating anything else is incorrect and factually baseless."

The only inaccurate numbers I've seen are wildly inflated, not suggesting he was in the poorhouse.

Steinberg was also called out by Roberts regarding the mortgage Tiger took out on his Jupiter home:

Mark Steinberg says simply that there is no debt on Woods' Jupiter Island home, and declined to elaborate. But the Martin County clerk's office confirmed that their records show that the mortgage has not been paid off.

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Reader Comments (42)

$431,000 in annual property tax?

Given that he has to pay income tax on his on-course winnings, he still needs to earn a few more hundred thousand in winnings just to break even on his property tax bill!

Wow, no wonder he is jumping at the chance to do Japanese Ben Gay Cream ads.
07.15.2011 | Unregistered Commentersgolfer
When Ghost of PM refers to himself in 3rd person its serious, and so is TW's financial condition, he may have nice balance sheet but income statement ain't looking so good. Isn't 'Privacy' for sale? I'm sure the market for used uber-luxury yachts is hot hot hot.
I wonder what his cash flow looks like. Why would be need to mortgage his mansion?

I get a sense that there are a lot of Michael Jackson economics coming into play - declining income while have delusions of previous grandeur in terms of not cutting back on expenses.

Nicklaus really needed to win those majors in his 40s because his businesses were in trouble and his wealth was at risk. Now, I am beginning to wonder about the financial scenario for Woods in his 40s.
07.15.2011 | Unregistered CommenterRob
Despite the Dubai course project being closed, didn't he have some deal or other that saw him get all or most of his fee up front? I think I may even have read that here. And it was not chump change.

It is surprising indeed that the house is mortgaged. But he owns, or has owned, other properties and could presumably turn some of those over to work down that mortgage. Rob's point regarding MJ economics is both possible and troubling. He would not be the first uber-celebrity to go weird, and more than a few of the very rich, from Jackson to Elton John, have ended up with horrendous financial situations (compared to what they are used to; it's not as if they flirt with homelessness).

But it looks as if Tiger will have to get back to work. If golf is out, some other line of work! Where else can you get as much for doing so little? Maybe he will end up as an agent.
07.15.2011 | Unregistered CommenterKCMG
He could go the dillard pruitt route and be an official.
07.15.2011 | Unregistered CommenterKeithT
The man is tied up in a lot of investments so he probably had to take a mortgage out with his stellar credit at a low APR. As a wise man once said "Im not liquid john.....im not liquid"
07.15.2011 | Unregistered CommenterJack Sparrow
Long characterized as a cheapskate, I wonder how Tiger is taking the erosion of his fortune no matter to what degree the truth is. No matter the actual numbers, the loss has to be significant. I think this is just one more component of the tremendous emotional strain he must be under. Getting dumped by IMG, which is essentially what happened, could not have felt good. That IMG is not abandoning golf, as witness their signing of young Tom Lewis, must be especially grating.

I can't believe he would be so foolish as MJ and Elton to allow himself to slip into comparative poverty. But the pressure to return, win and rake in cash again must be enormous both for his ego and his financial reality.
07.15.2011 | Unregistered CommenterTroglodyte
So, with Nike, EA, and the Japan thing, he has earned about $10 million year-to-date - plus about $500 K won this year, he is at $10.5 million, taxable about about 30%? for a Florida resident. That's is hardly enough to pay for the Rachel Uchitel shut-up money rumoured to be around $10 million. At current earnings, it will take almost a full year on income to cover the Uchitel payment (assuming there is no tax-decuctibility on the transfer to Uchitel).
Suddenly, all these 'settlements' aren't chump change to Woods.
I would assume he has a chunk of money saved from his glory years - but at his current rate of income, it will take about a decade of work in the future just to cover the payment to Elin Nordegren.
07.15.2011 | Unregistered CommenterMarky Mark
Tin Cup

Holding one, not the nickname
07.15.2011 | Unregistered CommenterTiger Hater
i thought i read somewhere that he took out the mortgage on the new house in order to get cash to pay elin. not being liquid is not the same thing as not being wealthy.
07.15.2011 | Unregistered Commenterthusgone
I guess some of you have forgotten the Fed Ex cup winnings of $20 million that Tiger won alot of which is deferred. Also, why in the hell would he pay cash for his house - a ridiculous tie up of capital without any tax advantages. He will probably sell it next year when the market turns.

I am sure TW is not loosing any sleep regarding his money.
07.15.2011 | Unregistered CommenterBrad Hamilton
Only the first Fed Ex $10 million has a $9 million annuity on it. The second Fed Ex $10 was paid out immediately.

Regarding Tiger Woods' real estate strategy, the housing market in South Florida might stabilze sometime next year, but the concensus is that it won't turn the corner for another five years. And, with respect to the monstrosity that Woods built, there is no way it will recover his cost. The market for gigantic kiddie-fantasy estates that look like motels is never coming back. Never. And yes, never is a hell of a long time.

And, if he is doing embarrassing ads for medicated Japanese cream, then yes, it is a sign that he is beginning to lose sleep (assuming the Ambien was working in the first place) regarding his money.
07.15.2011 | Unregistered CommenterRob
Where r the authors editors? Been fired. The lamest financial "analysis" I've ever read. What about TW's accumulated $700,000,000 or so in savings and investments and the revenue earned thereon?
Duh
07.15.2011 | Unregistered CommenterJen(MBA)
Well, we've heard from a MBA so that about settles it.

lol.
07.15.2011 | Unregistered Commenterd.b.cooper
Yes, lol.
I wonder if it was one of those mail-order MBAs I keep reading so much about.
07.15.2011 | Unregistered CommenterPress Agent
I think we need at least to hear from a CPA.

Aren't MBAs those buggers/cheerleaders/investment bankers who are always pumping up the markets? - subprime, tech bubble, etc.

MBAs are about as valuable as lawyers when it comes to getting quality information/analysis.
07.15.2011 | Unregistered CommenterMarky Mark
Article's a joke. The mortgage likely relates to the Divorce with Elin; the Jupiter property is collateral for (at least a certain amount) of Tiger's agreement to pay Elin, presumably, $100m. And Jen's point is obvious, MBA or not. It's not like Tiger's 1997-2009 money has just disappeared.
07.15.2011 | Unregistered Commentermbb
Any article like this that fails to mention assets is incompetent. How much debt you have is immaterial, what's important is your asset to debt ratio.
07.15.2011 | Unregistered CommenterElf
Earlier reports had the Mortgage guaranteeing Elin's payout. A mortgage does not necessarily represent cash flow / repayment requirements.

So if I did the divorce deal, it would be logical to look at TW's hard assets and secure Elin's payout with those. And this property is the best candidate to do that.

And as to the annual income - only a few people know and they aren't likely to be talking. We skeptical information consumers figured the previous numbers were inflated anyway, and these are probably on the low side.

Basically - unless more concrete information is presented - not much to see here if you have been paying attention.
07.15.2011 | Unregistered CommenterBanker
I'm not worried about Tiger's assets. Everybody needs to take a chill pill. He's fine.
07.15.2011 | Unregistered CommenterEast End Golfer
Michael Jackson and Elton John had assets at one time as well. Of course Tiger still has assets.

However, for the first time since "Hello World" his income is likely considerably less that his on-going expenses. That seems to be what the article is about. Either he will have to cut into his assets to finance his current lifestyle and payouts to keep indiscretions quiet, or he will have to find ways to drastically lower expenses (smaller boat, smaller house, flying commercial, fewer trips to Vegas).

Secondly, the article seems to also be about how Forbes did a completely incompetent jobs with respect to grossly over-estimating his current income by at least a factor of three. How did MBA girl not get this?
07.15.2011 | Unregistered CommenterMade Off
He really needs to find a way to win something now. The article blows a major hole into the myth that Tiger is the biggest stud in the world of athletic endorsements. Mark Steinberg is losing that as a negotiating ploy. Too bad Tiger didn't win at least the Chevron.
07.15.2011 | Unregistered Commentersgolfer
Having been in "Show Biz" for many years, I've personally seen many "big names" pizz it all away. This guy is not bullet proof. He has already exhibited poor judgement. And what about the big gambling sprees in Vegas and elsewhere?
07.15.2011 | Unregistered Commenterrb
Considering his income is now down to about $20 million, I am sure that a Man Diva like Woods is spending more than that (blowing $200,000 at the tables with John Mayer at TigerJam doesn't help at all).
07.15.2011 | Unregistered CommenterGorsegolf
Tiger has the reputation of being (I am being polite) rather frugal...In my world, he would be known as a tight-ass nit...but what you guys are forgetting is how much he has made in the last 15 years...wasnt he known as sports first billionaire just a couple years ago? Clearly his current annual income has dropped off quite a bit , but c'mon...He has to win a golf tournament soon to stay afloat? Gimme a break...
07.15.2011 | Unregistered Commenterbentshaft
@bentshaft
Shopping at Wal Mart and driving a Nissan Micra is frugal.
Stiffing waiters and doormen on tips is a different issue.

And as far as being the world's first athlete billionaire - that's was calculated and reported by, get ready for it ... Forbes. The same folks who say he hauled in $70 mil last year when he looks like he earned dramatically less.
07.15.2011 | Unregistered CommenterGorsegolf
Elin is going for the gold. Her new beau is Jamie Dingman of the Dingman fortune fame:

http://latimesblogs.latimes.com/gossip/2011/07/elin-nordegren-dating-jamie-dingman-billionaire-heir-tiger-woods.html
07.15.2011 | Unregistered CommenterTottenham Hotspur
http://www.luckyvogue.com
is a good shopping store!!!
07.15.2011 | Unregistered CommenterNiketiffany
If that's what Elin is going for, she's as much of a slag as her detractors thought when she gave up an academic career (spliced with bikini-modelling -- how did she not become Miss World with her interests in world peace, better lives for children and modeling?) to move to Florida to nanny for a then high-profile golfer.

Guess when you are pretty, blonde and chesty, there ain't a safe rich guy on the planet.

Sometimes good to be just plain Jack.
07.16.2011 | Unregistered CommenterJack Frost
Steiny brought in a little over $1m from TW last year and IMG paid him $3 m in return which led to his demise. But IMG got only 5% of TW's deals, so that means he made $20m. Safe to assume he's making that - from Nike and EA Sports - again this year. He's probably on the hook for more than that in expenses this year but let's not pretend he's pizzed away the $800m made over his career. He's not a big spender (it was a Cadillac Escalade because he got it for free, and Elin drove a Buick Rendezvous GM gave them for free, too). The new compound's expensive and the divorce is, too, but those payments are over 4 years. All in all, I'd love to be as destitute as Tiger Woods.
07.16.2011 | Unregistered CommenterI.M. Knott-Steiny
The negro sex offender must wipe the feces of his male lover off his penis.
07.16.2011 | Unregistered CommenterQuonsup Lee
Even after paying Elin, and after taking into account the effect of the recession, Tiger probably has an investment portfolio of $400-500 million. His golf-related income is way down, but he is in no financial trouble. And he has an additional $50-100 million in the PGA Tour retirement plan, which he can tap when he gets to 50 (or earlier if he has a real financial hardship!)
07.16.2011 | Unregistered CommenterGolfjunky
@ Brad Hamilton...out of curiosity, exactly when next year do you expect the market to "turn"?

@ Jen(MBA), mbb, et al...bingo.
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