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Tiger Woods has a brand new bag, but is sponsor FUSE Science really good business?

Chevron World Challenge - Final Round

Scott Halleran/Getty Images

THOUSAND OAKS, CA - DECEMBER 04: Tiger Woods plays a shot to the second green as his caddie Joe Lacava looks on during the final round of the Chevron World Challenge at Sherwood Country Club on December 4, 2011 in Thousand Oaks, California. (Photo by Scott Halleran/Getty Images)

US golfer Tiger Woods (L) and his caddie

FREDERIC J. BROWN/AFP/Getty Images

US golfer Tiger Woods (L) and his caddie Joe LaCava (R) discuss matters on approach to the 18th hole on the final day of the Chevron World Challenge at Sherwood Country Club in Thousand Oaks, California, on December 4, 2011. Woods won the Chevron World Challenge on a one-shot triumph in an unofficial 18-man event, his first victory since a 2009 sex scandal shattered his iconic image. Woods had gone 26 starts worldwide without a victory as personal turmoil was followed by struggles on the course with swing changes and, this year, injuries that curtailed his playing time and stalled his pursuit of Jack Nicklaus' record of 18 major titles at 14. AFP PHOTO / Frederic J. BROWN (Photo credit should read FREDERIC J. BROWN/AFP/Getty Images)

Chevron World Challenge - Final Round

Scott Halleran/Getty Images

THOUSAND OAKS, CA - DECEMBER 04: Tiger Woods pulls a club during the final round of the Chevron World Challenge at Sherwood Country Club on December 4, 2011 in Thousand Oaks, California. (Photo by Scott Halleran/Getty Images)

Chevron World Challenge - Final Round

Scott Halleran/Getty Images

THOUSAND OAKS, CA - DECEMBER 04: Tiger Woods pulls a club during the final round of the Chevron World Challenge at Sherwood Country Club on December 4, 2011 in Thousand Oaks, California. (Photo by Scott Halleran/Getty Images)

Chevron World Challenge - Final Round

Scott Halleran/Getty Images

THOUSAND OAKS, CA - DECEMBER 04: Tiger Woods pulls a club during the final round of the Chevron World Challenge at Sherwood Country Club on December 4, 2011 in Thousand Oaks, California. (Photo by Scott Halleran/Getty Images)


After losing numerous sponsors following his SUV-crash-multiple-affairs-rehab-divorce debacle of late 2009, Tiger Woods was reduced to lugging his clubs (well, his caddy was, anyway) in a bag adorned with his own logo, provided by Nike, which looks after the "TW" clothing and equipment brand. Prior to this, he had a bag deal with AT&T that was reported worth "millions." And before that, Woods bag deal was with General Motors; it brought in a reported $7.5 million per year.

A bag deal for the world's most famous golfer had been rumored since Woods returned to competition toward the end of this year. But Tiger formally rolled it out at his own tournament, the Chevron World Challenge, a limited-field event that he — Gasp! — won this past weekend, ending a two-year victory drought. However, the deal is weird. It's with a company called Double Eagle Holdings and its FUSE Science brand.

At his blog, Bruce Krasting breaks down FUSE's rather piddly financials. The upshot is that, although FUSE is sorta-kinda publicly traded, it trades at meager valuations and has a market cap of less than $40 million.

That's a market cap in the ballpark of Woods' total endorsement deal with GM.

So what's going on here? Krasting thinks it's a business arrangement, with Woods awarded options on the inevitable increase in value that the stock will see as his sponsorship — and one assumes, media appearances for FUSE, like the many minutes he spent on CNBC with the company's CEO prior to winning the Chevron tournament — adds value.

And heck, the company has no place to go but up. According to Krasting, FUSE's assets are $300,000. Against liabilities of $507,000:

My problem with this is that I can’t believe that a guy like Tiger would put FUSE (exclusively) on his bag unless he actually had tried the drink (and he liked it). If it’s later shown that all these guys [endorsing FUSE] are falsely endorsing this product it would them look very bad indeed. These pros are not dumb. They have tons of money and good lawyers. So I’m confused.

I'm a little baffled myself. Tiger has shown that, post-scandal, he can still sign prestigious deals. He just did one with Rolex. But he primary sponsor, Nike, with a market cap of $45 billion, is now losing the bag billboard to an upstart with a fraction of that. It's worth noting that while bag deals aren't uncommon in women's golf, most of men on the PGA Tour roll their bag deal into their equipment deal.

Check out the video below. Tiger seems to be plenty down with FUSE Science. And maybe his people figure that, in the $9 billion sport-drink market that Krasting notes, Woods can turbocharge the brand and transform a stock currently trading for less a $1 into something that will rapidly yield a rather higher valuation than that. 

Of course, this could also be the nature of post-scandal Tiger: he has to do scruffy deals that would have been well beneath him when he was the face of corporate American, during better times for that organization, as well.

 

 

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