Tiger Woods and Nike
NKE,
parted ways on Monday, ending their 27-year relationship.
Now, golf fans are wondering what will happen to the iconic “TW” logo that has appeared on millions of hats and golf polos over the years.
According to documents from the U.S. Patent and Trademark Office, ownership of the TW logo has always belonged to Woods’ company ETW Corp. The company uses the initials of the golfer’s full name, Eldrick Tont Woods.
Ownership of the TW trademark has not changed since it was first filed, signaling that Woods has been the sole owner for the duration of the patent, intellectual-property attorney Josh Gerben of Gerben IP told MarketWatch.
Since Woods, 48, owns the trademark rights to it, can the next golf-apparel brand that sponsors him sell products adorning the ready-made iconic logo?
“If there is no contract between Nike and Woods prohibiting him from using the TW logo going forward, Nike would have no right to stop him from using the logo itself or licensing it to third parties,” said Ed Karis, managing partner at Klaris Law.
Like Woods, tennis star Roger Federer had a long-term deal with Nike and a logo featuring his initials. Federer left Nike in 2018 after 24 years with the brand, and signed a massive $300 million sponsorship deal with Uniqlo. While Nike owned the rights to the “RF” logo during their partnership, Federer was able to obtain the rights to the logo after about two years. Uniqlo now sells merchandise featuring it.
Even though it’s possible that Nike could pursue litigation against Woods, Gerben doesn’t see that as a likely scenario and believes Woods will maintain control over the TW logo.
“I would not expect there to be a fight because it would be extraordinarily public and it would be a lot of bad press for Nike,” he said. “I would expect Nike to have to take a hit or a write-off. I think it would be a bad move by Nike even if they had a contractual ability to enforce something like that, because it would damage their ability to sign future athletes.”
“Very rarely does a company win in the court of public opinion over a person,” Gerben noted, while adding it’s likely there are “wind-down provisions” in Woods’s Nike contract that gives the company a grace period to sell remaining Woods-branded inventory in the event that the two parties split.
Nike’s website featured Woods prominently on its homepage on Monday, but on Tuesday it revamped its golf section to feature generic golf apparel. For now, Nike is still selling Woods-branded merchandise.
See also: Magic Johnson says not signing with Nike as a rookie cost him $5 billion: He ‘didn’t even know what’ stocks were
Without Woods, what remains of Nike’s golf business?
Nike’s golf unit is not a major revenue driver. According to Nike’s 10-K from 2015, the last full year the brand sold golf equipment (while continuing to sell golf apparel), Nike’s revenue for golf products that year was $771 million — far less than $4.85 billion for running products and $3.72 billion for basketball.
“The golf demographic is not Nike’s core consumer,” Spurwink River retail industry expert Matt Powell told MarketWatch. “I’m frankly surprised that this did not happen sooner.”
Powell said it’s extremely possible Nike gets out of the golf business completely.
“Economically, it just doesn’t make sense,” he said. “Nike does not do a lot of polos in the rest of their line, and golf is all about polos. The golf demographic is much older and much whiter than Nike’s core customer. And frankly, outside of a little bit of a burst during the pandemic, the golf business hasn’t been a high-growth industry.”
Nike and representatives for Woods did not respond to MarketWatch’s requests for comment.
Woods first signed with Nike in 1996 and inked multiple deals with the sportswear brand throughout his career. The total value of Woods’ Nike deals is reportedly between $500 million and $660 million.
The 15-time major champion is one of just seven athletes with a net worth of over $1 billion, according to Forbes. Those other athletes include Michael Jordan, Cristiano Ronaldo, Lionel Messi, LeBron James, Roger Federer and Floyd Mayweather Jr.
“Over 27 years ago, I was fortunate to start a partnership with one of the most iconic brands in the world,” Woods said on X, formerly Twitter. “The days since have been filled with so many amazing moments and memories, if I started naming them, I could go on forever. Phil Knight’s passion and vision brought this Nike and Nike Golf partnership together and I want to personally thank him, along with the Nike employees and incredible athletes I have had the pleasure of working with along the way. People will ask if there is another chapter. Yes, there will certainly be another chapter. See you in LA!”
From the archives: When LeBron James chose Nike in 2003, he gave up $28 million — it could end up making him $1 billion
The split from Woods comes at an uncertain time for Nike. The company reported softer-than-expected revenue during its latest earnings report in December and put forth a plan for $2 billion worth of cost-cutting measures over the next three years, including layoffs.
Shares of Nike Inc. are down 14.9% over the last month and down 19.4% over the last 12 months, compared to the S&P 500’s
SPX
gain of 20% over the last 12 months.
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