Is Tiger Woods Worth It?

The big news on the sports gaming front this week was that Electronic Arts bagged one of the most sought-after endorsement deals in professional sports.

After a full year of vying and bidding, Tiger Woods signed on with EA, and EA hopes that this will boost its lacking golf simulation market share. Although the terms of the deal were undisclosed - except that it is for four years, meaning four titles/sequels, and worldwide - it doesn't take a financial guru to make a close estimate.

Unless Tiger felt compassion for EA and went easy on the company for some unknown reason, you only need to look at the value of his other endorsement deals to get into the ballpark of what EA must be shelling out (many of these figures are estimates as well):

· Nike - $40 million over five years· Titleist - $20 million· American Express - $13 to $30 million· Rolex - $7 million over five years (based on a percentage of the sales of the $2000 "Tiger Tudor" watch plus a base compensation)· Planet Hollywood Inc. and All-Star Cafe - $7 million in stock

And now Electronic Arts. If you consider the minimum and the maximum amounts of Tiger's other deals, it might be safe to say that EA is paying Tiger a base of $2 million, the usual for top athlete endorsements, along with a percentage of game sales. That might be a conservative estimate, however, since Tiger might be worth more than the usual "top" athlete.

That's a huge chunk of change, even for deep-pocketed EA, which begs the question: Is it really worth it? Access Software, developer and publisher of the king of all golf sims, Links, was also in the running, but bowed out when, according to Steve Witzel, Access' VP of marketing, "the bucks got too big."

Now, Access Software is no Electronic Arts, but its bread and butter is the Links series. Sure Access has the king himself, Arnold Palmer, for its packaging, but getting Tiger Woods would have firmly established its position atop the golf sim heap, and that heap keeps getting higher and higher each year as more competitors enter the market fight. It seems Access would have wanted to stop at nothing and empty its coffers to get Woods. But it didn't, and there are probably a couple good reasons why.

One reason might be that the "big bucks" EA was prepared to pay Tiger were so extravagantly big that Access had no choice but to concede the prize. That should hint that a conservative estimate of the amount of the deal is probably too small. Granted, Access might not even have close to the finances EA has, but Witzel also revealed that Access had a partner in the bidding war (but didn't reveal who), one with presumably more capital than Access. Other rumored contenders were Nintendo, Microsoft, and Sony, definite deep pockets all around.

With its partner, Access might have been offering something close to EA's offer, so let's assume it was. Did Tiger then choose to sign with EA for more personal reasons? Maybe he likes EA and its games better? Maybe he only sees "EA Sports: It's in the game" commercials on TV and none for Links LS, making him believe that EA Sports is the sports game leader?

The big difference could be that Links has always been a computer-only game, while EA Sports seems to look towards the console market first and PC second, meaning a larger potential market for its games and therefore more sales for Tiger.

So another possible reason why Access Software dropped out of the bidding could be that it saw the return on its investment in the Tiger franchise as too small and risky. Remember that Links is already the top-selling golf sim on the computer games market and has been for quite a few years. Is Arnold Palmer the reason for that?

One could surmise that since Palmer didn't appear on the box until Links LS 97, (in fact, Palmer was the first endorsement deal for Links), and that before then, Links was still dominating the market, in front of Accolade's Jack Nicklaus Golf and EA Sports' PGA Tour Pro (which has always offered a number of pro golfers as its big selling point), Links has sold well because it has always been a great game, not because of an endorsement.

Will the Woods endorsement provide the extra push EA Sports and its PGA Tour golf game need to win over long-time Links players? It's hard to say until we see Tiger Woods and the Pro Tour at E3 this spring. The formula is simple: great (or good) sports game plus popular sports celebrity endorsement equals good (or great) sales.

EA Sports has established the second half of the equation, but it needs to deliver on the first half. If its game is no better than mediocre but the game sells anyway, we should all bow down to the power of marketing. Conversely, if the game bombs or only sells as well as it deserves, chalk it up as one more victory for the discriminating and educated tastes of computer gamers. The outcome will be interesting to see for sure.