Andy Martin: “Long green” drove Tiger Woods back to the golf greens
Andy Martin analyzes Tiger Woods’ income, expenses and portfolio allocation, and says that a potential cash crunch and the need to reassure sponsors drove Tiger Woods to cut back his “therapy” and return to the Masters.
Internet Powerhouse Andy Martin on what forced the return of Tiger Woods to the golf links
“The Internet Powerhouse”
“Factually Correct, Not
FOR IMMEDIATE RELEASE:
Andy Martin “connects the dots” between Tiger Woods’ income, overhead, assets, investments and cost pressures to resume playing golf
(NEW YORK)(April 8, 2010) Tiger Woods returns to the golf links today. The Chairman of Augusta National boxed Woods’ ears on Tuesday. Sports writers are perched like rabbits awaiting Woods’ return. Woods’ “army” of security guards is poised to collar any bimbo eruptions.
I am not a sports writer, and I have never played a round of golf. While I was intrigued and amused by Wood’s “secret life,” I am not going to analyze Wood’s sexual preoccupations. But as someone who has invested money for over half a century and began life as an economist, I was asked for an opinion on Woods’ finances. Here is the result of our due diligence.
We are going to answer the question that no one has really asked: why did Woods rush back to golf so soon after his career was torpedoed by his own insufferable arrogance?
Woods needs the cash.
“Long green” has brought Woods back to the golf greens.
In all of the mountains of coverage devoted to Woods’ sexual peccadilloes, no one until this column has actually analyzed Wood’s cash crunch and his need to work to pay the bills.
Common references to Woods usually call him a “billion-dollar” golfer. No one has gone any further, to actually analyze Wood’s finances by delving into his cash position and investment portfolio. ContrarianCommentary.com has.
On closer examination, Woods appears to have been forced back to work by his cash needs.
Start with the “billion-dollar” earnings figure. As a gross amount, it’s impressive. But career earnings tell us nothing about his current cash in the bank.
Woods paid taxes on that cool billion. He was not left with a billion to spend.
Then Woods allocated his earnings to (A) lifestyle expenses and (B) investments.
We have studied Woods’ “burn rate” to come up with a monthly overhead. Woods has a major cost structure to support. Yes, he earns a lot. But like many successful executives he also spends a lot. His monthly “nut” is substantial. Unlike paramours, overhead can’t be dumped quite as quickly or easily.
His wife uses the family Gulfstream jet as though it is a local taxi. There are houses, boats, maids and groundskeepers. There is the cost of moving his retinue around. There are fees to agents and supporters. Money, money, money.
When everyone has their hands out, even fifty million dollars a year can fly out the door pretty fast. We estimate Woods was burning through a minimum of $12 million a year, and possibly as much as $25 million.
Woods may have also felt the need to “liquefy” his assets to find a potential premarital divorce settlement. Going back to work was a quick and obvious option.
On the revenue side, Woods’ income has suffered during the past five months. Lucrative sponsors have dropped Tiger as their pitch man. But the overhead costs of running his operation have not dropped. So Woods was/is facing ongoing cost pressures even while his income was/is contracting. Not good.
It gets worse.
Woods, in common with most wealthy individuals, has an “office” that manages his life. The office also superintends his investments. Unless Woods is the first person in history not to make a bad investment, his balance sheet has suffered along with the market decline and the decline of assets in his portfolio.
Wealthy investors tend to gravitate to tax-sheltered investments (yes, they did that even during the low-tax reign of George W. Bush). Even if Woods’ investment portfolio was not suffering cash losses it was almost inevitably shrinking in value.
Wood’s investments are also likely to include substantial illiquid holdings. His advisers no doubt steered him away from listed stocks and suggested “private equity” as a safer haven. But “private equity” deals have not proven to be great investments, except for the sponsors who collect inflated fees and deliver deflated performance.
So Woods has fixed costs, shrinking income and a fair amount of his net worth that is tied up in shrinking and illiquid investments.
The result: Mr. Woods had to go back to work to replenish his bank account. My best information: Woods’ financial advisers told him he had to cut short his “therapy” and get back to work.
The need for long green drove Tiger Woods back to the golf greens. It was the potential for future financial eruptions, not the fear of bimbo eruptions, which was the decisive factor in Wood’s return to the links.
Footnote: ContrarianCommentary was supposed to resume regular publication earlier. Our resumption was further delayed by minor surgery that (we hope) has now been successfully completed. But we’re coming back with blockbuster analysis of Obama, America and the world. Stay tuned.
Readers of Obama: The Man Behind The Mask, say the book is still the only gold standard and practical handbook on Barack Obama’s unfitness for the presidency. Buy it. Book orders: Amazon.com or OrangeStatePress.com. Immediate shipment from Amazon.com or signed copies (delayed for signing) from the publisher are available.
Andy Martin is a legendary Chicago muckraker, author, Internet columnist, radio talk show host, broadcaster and media critic. He has over forty years of broadcasting background in radio and television and is the dean of Illinois media and communications. He is currently promoting his best-selling book, Obama: The Man Behind The Mask and promoting his new Internet movie “Obama: The Hawai’i years.” Andy is the Executive Editor and publisher of http://www.ContrarianCommentary.com.
Martin comments on regional, national and world events with more than four decades of experience. He holds a Juris Doctor degree from the University of Illinois College of Law and is a former adjunct professor of law at the City University of New York.
His columns are also posted at ContrarianCommentary.blogspot.com; contrariancommentary.wordpress.com.
[NOTE: We try to correct typographical errors and additions/subtractions on our blogs, where you can find the latest edition of this column.]
MEDIA CONTACT: (866) 706-2639 E-MAIL: AndyMart20@aol.com
© Copyright by Andy Martin 2010.