When Tiger Woods recently became a member of the billionaire athlete’s club alongside just Michael Jordan and LeBron James, it immediately begged the question: Why don’t more athletes have a net worth of over $1 billion? Baseball is known for its insanely high contracts. The highest-paid football players in the NFL can easily reach nine figures. Many stars in the NBA make eight figures a year. With numbers like these, how is the club still so small, and how did a pro golfer join?
An Endorsement of Endorsements
Only about 10% ($118 million) of Tiger’s net worth came directly from his golf winnings. His on-course success, however, has translated into massive gains through endorsement deals with companies like Nike, Gatorade, Rolex, AT&T, and Monster Energy. Nike has been one of his most lucrative: Even after his extramarital affairs and substance-abuse issues were discovered and threatened to end his career in 2009, the sportswear giant was the only company to stick with Woods.
Tiger Woods came from a different mold than his predecessors. He was the first professional golfer to be seen as an athlete, even following a rigorous fitness routine complete with weight training and cardio. His young age and total domination of the game for years helped turn golf into a mainstream sport. Woods was so far beyond the competition that he became an instant celebrity, and his profile and success helped him land all those endorsements.
A Lesson in Resilience
But even Tiger Woods wasn’t immune to the pressures and temptations that accompany fame and fortune. In 2009, after he crashed his vehicle into a tree outside his house, numerous women came forward alleging affairs with the greatest golfer in the world. The fallout resulted in a stint at rehab, a highly publicized divorce, and almost a decade of poor performance on the links.
In the last five years, Woods has taught the world how to bounce back from adversity. Through trials, tribulations, a messy divorce, multiple injuries, and a spoiled public image, Tiger has clawed his way back to the top. But he hasn’t limited his success to the golf course despite still winning championships.
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A Diverse Portfolio
Tiger is still not making most of his money directly from golf; in fact, he recently turned down a reportedly huge offer to play in a set of tournaments backed by Saudi Arabia. No, he has long since discovered the power of diversification.
Not only has he had huge endorsements from sports brands, energy drinks, and luxury watches, but he also owns a golf course design company, which provides substantial revenue. In addition, he has reclaimed his stellar reputation by starting a nonprofit to help kids discover their passions in life, complete with a 35,000-square-foot education center in California.
That diversification speaks to why so many more athletes don’t reach the billion-dollar club. LeBron, Jordan, and Woods all have diversification in common — and an extremely lucrative long-term relationship with Nike. Tiger’s sporting domination encouraged the company to maintain its relationship with Woods even through the scandals in his personal life. By contrast, it may have been the distinction between personal and professional cheating that led Nike to dump Lance Armstrong but keep Woods.
Each athlete has branched out and made smart business decisions, landing well-paid endorsements with many and varied businesses. Michael Jordan owns most of the Charlotte Hornets. Tiger owns several companies and is a venture capitalist. LeBron James owns a video production company. Each of these mega-rich athletes used their considerable winnings and fame to keep the money flowing.
Down But Never Out
There was a time when most people counted Tiger Woods out. What they didn’t count on was his determination. What more should we have expected from the guy who turned pro at 20 and immediately started dominating his sport?
It shouldn’t be a surprise that he joins the prestigious ranks of billionaire athletes alongside Jordan and LeBron. Like those two titans of industry, Tiger didn’t make his billions on the course — he made it by leveraging his skill and popularity for endorsements and additional businesses. It’s a lesson in how to paylay our strengths into something greater.