In recent weeks there is an ongoing rumour about 23-year-old Irishman Rory McIlroy, who is on the verge of signing a 10-year deal with Nike, worth $250 million. Nice sum isn't it? Well, not that much if we remember, that Nike Golf back in 2000 paid Tiger Woods $200 million. If I count the inflation that amount of money ($200 million) today it worths $268,765,389. However Rory McIlroy really needs this contract since his deal with Titleist/FootJoy expires at the end of 2012.
In case the deal will be signed then Rory McIlroy will have a hard work to prove he really worths $250 million. When Tiger Woods switched his endorsed golf balls from the Titleist brand to Nike Golf in 2000, Nike Golf's market share went from 0.9% to 4% in 6 months. In retrospect I would say Tiger Woods could have demanded even larger amount from Nike Golf. Other economic factors that complicate Rory McIlroy's situation that in the first decade of the 21st century there was an upheaval in golf participation and a result of it also in golf equipment sales.
At the very same time we can also ask from Nike Golf how do you want to be a true, acknowledged golf equipment manufacturer? As I am reading reviews (online, offline), I can hardly find any comments (pros and cons) about Nike Golf golf clubs and golf balls. Now that I am looking for my first golf club set, Nike Golf is not on my list since my perception is Nike is running shoes. When I went through Nike Golf athlete roster list I have not found anybody almost as good as Tiger Woods that can significantly contribute to sales and brand building.
Therefore Nike Golf really needs another star like Tiger Woods who can boost sales + brand awareness. For this reason they should pay more for Rory McIlroy to achieve their objectives.