Why Should Nike Want Tiger Woods, Not Rory McIlroy, To Win The Masters?
Belus Capital Advisors CEO Brian Sozzi argued that Nike Inc (NYSE: NKE) may prefer Tiger Woods to win the upcoming Masters tournament over Rory McIlroy.
In an article published Wednesday on The Street, Sozzi said the issue at hand is the fact that the 39-year-old Woods is still Nike's "go to" guy in the sport despite his recent struggles, injuries and negative spotlight in the media.
"Nike execs are likely rooting hard for its veteran to wind up with the legendary green jacket," Sozzi wrote. "Why? Woods winding up in the winner's circle has proven best for Nike's golf business, which only represents about 3.5% of the company's annual sales, but maintains a prominent place in the golf equipment industry because of its high profile endorsers."
Sozzi added that Nike's golf sales have fallen each quarter of the most recent fiscal year. Nike may be desperate for an epic Woods win, who has racked up zero wins on tour as of late due to various injuries. On the other hand, Nike saw its golf sales rise 10 percent in fiscal 2012, and then gained another 9 percent the following year, coinciding with Woods eight wins during the two-year time period.
Nike does have a lucrative agreement with fan favorite McIlroy who was signed to a 10-year contract in January 2013. The Northern Irish born golfer won two majors last year, yet his growing dominance in the sport hasn't energized consumers enough to buy golf-related apparel and equipment.
Sozzi concluded if Woods does the beat the odds and wins the tournament, Nike's executive team will "likely be cheering just as loud, if not louder, than the distinguished patrons at Amen Corner and then the final hole at Augusta on Sunday evening."
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