Tiger's Investor Tip: Beware Celebrity-Driven Companies
The blowup of Tiger Woods' image over marital infidelities should come as no surprise to the companies that have endorsement deals with the famed golfer - companies that include Nike (NYSE:NKE), American Express (NYSE:AXP), General Motors and Berkshire Hathaway's (NYSE:BRK.A) NetJets and PepsiCo - the last of which is dropping a Gatorade brand named after the world's No. 1 golfer.

The reason: In modern-day America, merely mortal couples have just a 50% chance of having their marriages end in divorce; for celebrities of Woods' stature, the likelihood of staying together is just 30%.

The Celebrity 100
Investing, Family Style
Do-It-Yourself Investing
Such statistics aside, marketing execs at Forbes 500 companies don't generally insist on protective relationships measures when signing celebrities to hawk their products. For investors, the lesson is clear: keep in mind that any company whose corporate image, or products, are closely tied in the public's mind to a celebrity is likely to run into some image problems down the road.

Based on published reports, Woods found married life unfulfilling. If he's anything like the myriad men I've seen in my relationship practice, there's a strong likelihood his issues were not his wife's fault. The so-called Madonna and Whore complex is very real and prevalent among American men, aptly articulated by the singer Usher as wanting "a lady in the street but a freak in the bed."

Sadly, while Americans accept widespread displays of sexually charged images in public, couples tend toward the status quo in relationships between partners. Research indicates couples wait approximately six years from the onset of challenges before seeking outside help. This approach would be a bad idea with a car, or plumbing, and is equally destructive with a marriage.

The difference between an average couple and the Woods family? With Tiger, a healthy marriage is a major component of a public image, both of the celebrity himself and the companies who choose him to embody their images and products.

A world-class performer like Woods has advisors to help with everything from his golf swing to his prenuptial agreement. But I'm willing to wager than none of the marketing experts who signed Woods to highly lucrative endorsement contracts conducted even cursory investigations into what, if any, measures were being taken to ensure his marriage would survive against formidable odds. A corporate controller would be fired for such negligent risk management.
Here's a couple of take-away tips from Tiger's tragedy: Couples who chose to go it alone despite serious troubles risk marital failure. Investors who own shares in companies that hitch their wagons too tightly to celebrities can expect plenty of bumps and embarrassments along the way.

comments powered by Disqus
Trading Center