Media and Crisis Management
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Media and Crisis Management

Tiger Woods – Damage to his Partners

Posted on: July 28th, 2012

Crisis Management: Tiger Woods – Damage to his PartnersCrisis response

Okay, here is how this will probably – probably – play out.  Tiger Woods emerges from self-imposed exile in a 60 Minutes type interview in a few months.  He says his serial cheating was unconscionable, apologizes to all, and returns to golf.  His reputation is forever tarnished but if he brings his old mojo with him then most fans will follow.  Ferocious media heat will resume.

The Tiger saga has become a professional morality play as well as a personal one.  His minimalist public response to his transgressions was a slap in the face of business partners whom he had a duty to protect in addition to his family.

His extracurricular activities were certainly of gravest import to his loved ones.  And if family was all that mattered then his brief website written statements and indefinite departure from golf might have been a sufficient response.  But Tiger had another “family” to take care of: sponsors who must be feeling pretty violated about now.  Shareholders too.  Those invested in companies that endorsed him saw stock prices drop an estimated $12 billion after Tiger’s Escalade hit the tree according to one report.  (That figure has since been questioned by a Wall Street Journal columnist and the study author admits it needs more review.)  A few major companies are standing by him for now while others continue to eliminate or reduce his endorsement role.  Their actions say worlds about the reputational sand trap he left them in.  Plus he’s not playing.

Tiger’s tepid response to his scandal might have suited his privacy needs but it deserted companies spending $90 million a year on him.  All crises, as regular readers know, are victim-centric.  Victims must be cared for and that includes sponsors and shareholders.

From the beginning many crisis consultants including me wanted the golf champ to be forthcoming early.  We suggested he get ahead of the scandal as best he could, do a “Letterman”, apologize, explain himself in person, and move on.  It wasn’t unanimous.  Others said Tiger got it right: say little, go underground, surface later, then play again.  However, I believe the latter strategy is precisely the one that left stakeholders in a lurch.  They, not to mention Tiger fans, wanted reassurance, some sense that “their guy” was penitent and determined to right his wrongs.  Brief statements and going AWOL did not accomplish that. Now, not only is Tiger tainted, so are his business relationships.  And not just for him.  By saying and doing almost nothing, Tiger has poisoned the endorsement well for future star athletes.  Will another big company ever again do what Accenture did with Tiger: hang 83% of its ads and reputation on a single personality?  Are athlete endorsements becoming too risky for corporations? Imagine the new behavior-contingent language in contracts.  Tiger’s case swamped more than his family.

Tiger’s “Hollywood Strategy” of say little, go underground, and emerge later is useful for celebrities in trouble.  But he is far more than a star.  He’s essentially a big company. And savvy big companies know that to survive a crisis they must maintain public trust by communicating, fixing problems, and taking care of stakeholders.

Tiger Woods will rise again but can he undo the damage he has done?

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