Why Tiger chose to stay with longtime agent Mark Steinberg
For years, Tiger Woods announced news and plans on his Web site, tigerwoods.com, but on Monday morning he sent this tweet to his nearly 1 million followers:
"Staying with Mark Steinberg. Total confidence in him. Excited about the next stage in my professional life. Fond memories of Mark McCormack."
With those 140 characters, Woods ended his relationship with IMG, the Cleveland-based sports-agency powerhouse that had represented his business interests since he became a professional golfer in 1996.
Steinberg and IMG parted ways at the end of May after IMG did not renew Steinberg’s contract. That left Woods with a decision to make: Stay with his agency or stick with the man who stood by him after his 2009 car accident and subsequent sex scandal.
In this case it certainly appears that loyalty won out, but here are three other possible reasons why Tiger is staying with Steinberg.
1. No break-in period. To say that Tiger's world is a little complicated is an understatement. If Woods had stayed with IMG, he would have had a new person or team of people in charge of his business interests. Steinberg has been by Woods's side for 12 years.
2. Tiger and Steinberg become a package deal. If Steinberg doesn't feel the urge to strike out and start his own agency, having a powerhouse client like Woods committed to staying with him could make Steinberg an attractive agent for another management group to recruit. If Woods can start winning, a firm that hires Steinberg can make money and increase its exposure. Arriving as a package deal might also allow Tiger to keep a greater percentage of endorsement dollars.
3. The client becomes a partner. Did you notice the "Excited about the next stage in my professional life" statement in Woods's tweet? Woods has won just about everything there is to win in golf including all four majors (multiple times), the FedEx Cup (2007 and 2009), and a Ryder Cup (1999). His golf course design business is off to a rocky start, but as the economy improves the jobs will come. He's still the face of Nike Golf and one of the most successful video-game franchises ever created (EA Sports' Tiger Woods PGA Tour). With Steinberg handling the agents and the deals, Woods could woo athletes and celebrities to their firm. Could the next stage of his professional life be the sports-agency business?
According to The Sports Business Journal, Woods only earned $1.1 million for IMG in 2010 because sponsors like AT&T, Tag Heuer and GM dropped him from their rosters and he failed to win a tournament. (In his most recent contract, which was signed before his scandals, Woods negotiated to give IMG a lower percentage of his endorsements and winnings.)
To a company the size of IMG, $1.1 million walking out the door isn't cause for too much concern. The company still has plenty of superstar athletes in its stable, runs tournaments around the world, creates TV shows, and has an army of agents brokering deals.
At the end of the day, neither Woods nor IMG is going to cry over this separation. For 13 years IMG made a lot of money off Woods and he made a fortune with the help of IMG.
That simple truth doesn’t require a tweet.