A week after The Wall Street Journal first reported golfer Phil Mickelson’s involvement in a potential insider tradition situation with investor Carl Icahn and sports bettor William “Billy” Walters, sports marketers are weighing in to discuss the ramifications to Mickelson, his endorsement deals and overall brand image.
Between tour earnings and endorsements, Mickelson rakes in roughly $50 million annually. And while the on-going investigation has not resulted in any indictment yet, Mickelson has been thrust into the spotlight.
David Meltzer, CEO at California-based Sports 1 Marketing, suggested that the FBI and SEC may have had ulterior motives for its probing, with Meltzer calling the entire situation a “free public service announcement.”
“It was an obvious attempt to get publicity to create messaging against people doing the wrong thing and acting inappropriately with trading stocks,” Meltzer added. “They’re leveraging the media because if it was truly about the investigation, they could have easily contacted his lawyer and set up a time to interview him. They didn’t have to pick the fourth round of the Memorial in order to disrupt his play and create the media buzz.”
For now, Mickelson’s partners — including KPMG, Barclays and Callaway Golf, to name a few — have stood by the five-time Major champion. Considering no one has distanced themselves from the 43-year-old, Mickelson's brand remains relatively strong.
“He’s a loveable, genuine guy,” said Ben Sturner, CEO of Leverage Agency. “Everyone has their faults occasionally. He’s got this Teddy bear kind of image. …He’s been a great golfer, and he’s still loved by his fans.”
The circumstances would be different had Mickelson been investigated for a more violent or physically involved crime. Activist groups would be swearing Mickelson's name and chances are the companies he's partnered with would invoke their mortality clause to free themselves of any association with him.
Hypothetically speaking, if Mickelson is indicted for a white collar crime, the circumstances would change.
“All of his financial partners will definitely invoke the morality clause,” said Meltzer if Mickelson is charged with a crime. “Companies like Callaway and others may hold on to see how it evolves. In the end, a conviction is seriously damaging. An indictment will be a blow to him in every respect.”
At the end of the day, though, the time and resources devoted to the investigation will arguably be for naught as the government educates the general public on the dos and don'ts of insider trading through the use of Mickelson's name.
“It's about, ‘Hey, it’s not okay to take advantage of our markets,’ ” Meltzer said. “ 'We’ll go so far as to protect all of the investors in America and worldwide; it doesn’t matter if you’re a big time gambler, a big time billionaire or a big time athlete. You’re not an exception to our rules’.”
Mark Burns is a contributor on sports business for Sporting News. He is currently an Editorial Assistant at USA Hockey Magazine. Follow Mark on Twitter @MarkJBurns88.