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Tiger Woods Is Back. Will Sponsors Buy In?

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In the past few weeks, Tiger Woods has made a seemingly improbable comeback on the golf course. But can his image rebound the same way off it?

That is the question that brands and advertisers are posing as Mr. Woods returns to the Masters on Thursday for the first time since 2015, while playing his best golf in years. The past month has brought swelling television ratings and overcrowded, rowdy galleries for Mr. Woods’s PGA Tour appearances. When he finished in a second-place tie at the Valspar Championship in early March — at one point sinking a 44-foot birdie putt that had the crowd screaming — the television ratings for the final round were the highest for a non-major tournament since 2013. For a time, the streaming service of PGA Tour Live crashed because of “unprecedented traffic.”

All this is evoking memories of the unprecedented fan interest that made Mr. Woods one of the most recognized — and influential — athletes for more than a decade, worth about $90 million per year in endorsement contracts alone.

But it has been a while. The fallout from the 2009 revelations of his extramarital affairs cost him endorsement deals with Gatorade, AT&T, General Motors and Gillette, among others. The few companies that stood by him, namely Nike, did so despite multiple injury-plagued and underwhelming seasons; since 2010, Mr. Woods has eight PGA Tour wins, after winning 71 times in the 14 previous years.

“He has a little bit of wind in his sails,” said David Carter, a professor of sports business at the University of Southern California. “The key is going to be can he win, can he stay healthy and can he stay out of trouble? If he can do that and remain competitive, then I think the big brands will return.”

Some brands had already bet on a Tiger Woods comeback, even when it looked unlikely. Bridgestone reached out to Mr. Woods about playing its golf ball in September 2016, shortly after Nike announced that it would no longer be selling golf equipment (though it would continue its Woods-branded clothing line). It hardly mattered that Mr. Woods had not appeared in a tournament in 13 months.

Angel Ilagan, Bridgestone Golf’s chief executive, said in a recent interview that the company had sent 12 dozen balls to Mr. Woods, hoping he would attach his name and endorsement to the product, which he eventually did, signing a multi-year contract in December of that year

“We know Tiger’s brand strength,” Mr. Ilagan said. “Whether he does play or not doesn’t really matter. That’s just icing on the cake.”

With Mr. Woods apparently close to his previous form — he is the betting favorite to win his fifth green jacket at the Masters — that icing is already tasting sweet. Already in 2018, Bridgestone’s sales of golf balls have increased 115 percent over the same period a year ago. Mr. Ilagan attributed that to Mr. Woods; Bridgestone has already begun to market a Woods edition golf ball, which it introduced on Wednesday.

TaylorMade, which signed Mr. Woods to use its clubs in January last year, said it saw no need to build a marketing campaign around the star, because the mere fact that he plays with the clubs or talks about their performance in interviews does the selling job.

“When Tiger says something, the world takes notice,” David Abeles, the company’s chief executive, said. “Because it’s true. We’re excited just when he talks in his own words.”

Mr. Ilagan suggested that Mr. Woods’s rebound from the dramatic turn his career took in 2009 had made him more relatable and perhaps likable for fans. “His absence showed what was missing when he wasn’t there,” Mr. Ilagan said.

Martin Buckley, global vice president and general manager of Nike Golf, which sells a full line of Woods-branded clothing, including shoes, shirts and sweaters, said that fans would be seeing a lot more of him in Nike advertisements this summer.

Nike stood by Mr. Woods throughout his tabloid troubles over the past decade, even as other sponsors fell away. He was last No. 1 in the world golf rankings in 2014.

“He’s a unique, integral part of the Nike family,” Mr. Buckley wrote in an email, “and we don’t see that changing any time soon.”

But while performance brands remain aligned with Mr. Woods, more mainstream companies have not yet jumped back on the bandwagon. Peter Land, a partner at Finsbury, the strategic communications firm, suspects a reason could be that Mr. Woods likely alienated women when news about his extramarital affairs surfaced.

“Brands with a strong female stakeholder base will continue to be a struggle for Tiger,” said Mr. Land, who was with PepsiCo when Gatorade, which PepsiCo owns, decided to drop Mr. Woods. “There are so many other successful and charismatic global athletes to partner with — and they come with a lower risk profile.”

The companies that might benefit most from Mr. Woods’s resurgence could be the ones that got on board a few years ago, seizing on a “buy low” opportunity, said Mr. Carter, the University of Southern California professor.

Full Swing Golf, which makes golf simulators, started a relationship with Mr. Woods in 2014, when he was rehabbing from injury. Its chief executive, Ryan Dotters, thought Mr. Woods could use the simulator to train indoors, and Mr. Woods was receptive.

“It was definitely a strategic move,” Mr. Dotters said. “We felt no matter what Tiger had gone through in the past, we knew his brand was extremely strong. We thought there was a big opportunity there.”

The relationship has not always been easy. Last May, Mr. Woods was arrested and charged with driving under the influence after being found asleep behind the wheel of his Mercedes-Benz. A toxicology report found several powerful painkillers in his system that he said he was taking to cope with his fourth back surgery that spring.

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Bitcoin (BTC) price falls after Tesla stops car purchases with crypto

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Artur Widak | NurPhoto | Getty Images

GUANGZHOU, China — Hundreds of billions of dollars were wiped off the entire cryptocurrency market after Tesla CEO Elon Musk tweeted that the electric vehicle maker would suspend car purchases using bitcoin.

At around 6:06 a.m. Singapore time on Thursday when Musk made the announcement, the value of the whole cryptocurrency market stood at around $2.43 trillion, according to data from Coinmarketcap.com.

Around 8:45 a.m., the market capitalization had dropped to around $2.06 trillion, wiping off around $365.85 billion. The market has pared some losses. Since Musk’s tweet, the cryptocurrency market had seen $165.75 billion wiped off its value at around 9:22 a.m. Singapore time.

In February, Tesla announced in a regulatory filing that it had purchased $1.5 billion worth of bitcoin and planned to accept the cryptocurrency for payments.

Musk cited environmental concerns on Thursday and said Tesla is “concerned about rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel.”

Bitcoin is not issued by a single entity like a central bank. Instead, it is maintained by a network of so-called “miners.” These miners use purpose-built computers that require a lot of energy to solve complex mathematical puzzles in order for bitcoin transactions to go through. Bitcoin’s energy consumption is larger than some individual countries.

At around 9:34 a.m. Singapore time, bitcoin was down over 12%, dipping below the $50,000 mark for the first time since Apr. 24, according to CoinDesk data. Despite the recent pullback, bitcoin is still up over 400% in the last 12 months.

Other cryptocurrencies ether and XRP were also sharply lower.

Musk has been a big proponent of digital currencies including bitcoin and dogecoin, helping to drive their prices higher in recent months.

The Tesla CEO said the company will not be selling any bitcoin and intends to use it for transactions “as soon as mining transitions to more sustainable energy.”

Bitcoin has garnered interest in the last year as companies such as Square and Tesla announced bitcoin purchases and large institutional investors entered the cryptocurrency space. Major investment banks like Goldman Sachs and Morgan Stanley have also sought ways to allow their wealthy clients to get bitcoin exposure.

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Facebook-backed Diem is moving from Switzerland to the US

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The logo for Diem, formerly known as Libra, is seen is displayed on a smartphone screen with a Facebook logo in the background.

Pavlo Gonchar | SOPA Images | LightRocket via Getty Images

LONDON — Facebook-backed digital currency project Diem said Wednesday it has withdrawn its application for a Swiss payment license and will instead shift its operations to the United States.

The Diem Association, which oversees development of the Diem digital currency, had been pursuing a payment system license with Switzerland’s FINMA watchdog. Diem has now dropped plans to secure Swiss regulatory approval, while its U.S. subsidiary has partnered with Silvergate, a California state-chartered bank, to issue the token.

“While our plans take the project fully within the US regulatory perimeter and no longer require a license from FINMA, the project has benefited greatly from the intensive licensing process in Switzerland and the constructive feedback from FINMA and more than two dozen other regulatory authorities from around the world convened by FINMA to consider the project,” Stuart Levy, Diem’s CEO, said in a statement.

Diem said it plans to move its operational headquarters from Geneva to Washington, D.C., where its U.S. unit is based.

FINMA declined to comment when contacted by CNBC.

Formerly known as Libra, Facebook’s vision for a digital currency was met with a severe backlash from regulators when it was first announced in June 2019, with central bankers and politicians worried it could undermine sovereign currencies like the dollar, enable money laundering and infringe on users’ privacy.

The organization has since lost several key backers — including Visa, Mastercard and PayPal — and suffered a number of notable executive departures.

Diem had initially proposed a universal currency tied to a basket of major currencies and government debt. After much regulatory opposition, the group then switched its focus to multiple “stablecoins” backed one-to-one by different currencies, as well as one multi-currency coin.

For now, Diem is only planning to issue a U.S. dollar-backed stablecoin, called Diem USD. Unlike bitcoin, which uses a public ledger system and isn’t controlled by any single authority, Diem’s technology will be open to only a few participants, such as Facebook and other members of the Diem Association. Stablecoins are also designed to avoid the price volatility seen in cryptocurrencies like bitcoin.

Silvergate will be the exclusive issuer of Diem USD and will manage its dollar currency reserve. Silvergate has become a go-to for cryptocurrency businesses shunned by traditional lenders.

Diem is preparing to launch a pilot with its dollar-pegged stablecoin later this year, a person familiar with the matter told CNBC in April. The pilot will be small in scale, focusing largely on transactions between individual consumers, the person said.

Digital currencies have been the talk of Wall Street lately thanks to a wild rally in bitcoin and other digital currencies. Institutional investors have shown growing interest in bitcoin, while major firms like Tesla and Square have made big bets on the digital coin.

At the same time, central bankers are also grappling with the concept of digital currencies. The People’s Bank of China has been racing ahead with trials of its digital yuan in various cities. And there have been growing calls for the U.S. Federal Reserve to develop a digital version of the dollar.

However, some in the crypto industry think that digital innovation around currencies might be best left to the private sector.

“Governments can help set the rules of the road and make sure monetary policy can be emitted, financial crimes can be thwarted. But the government shouldn’t be in the business of building technologies,” Jeremy Allaire, CEO of crypto firm Circle, told CNBC in an interview last week.

Dante Disparte, Diem’s former public affairs chief, left to join Circle last month. Circle and crypto exchange Coinbase helped launch a stablecoin called USD Coin, which has since seen growing acceptance with Visa now supporting payment settlement with the token. Meanwhile, tether, a controversial stablecoin, is currently worth over $57 billion, according to CoinMarketCap data.

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China’s aging population could be a ‘big shock’ to global supply chain

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An ANZ economist warned on Wednesday that China’s aging population will have a big impact on the world as the global supply chain is highly reliant on the world’s second-largest economy.

China’s once-a-decade census released on Tuesday showed the population of the mainland grew to 1.41 billion people as of Nov. 1, 2020. That was the slowest growth rate since the 1950s.

“The trend of the old age dependency is going to rise … This is a warning not only for China, but also across the whole world, as China is the core of the supply chain,” Raymond Yeung, Greater China chief economist at ANZ, told CNBC’s “Squawk Box Asia.”

“Over the next few years, China will be losing 70 million (of its) workforce … so this is a big shock to the global supply chain.”

Two elderly women sit on a roadside bench in China. By 2050, one third of the Chinese population will be above 60 years old.

Zhang Peng | LightRocket | Getty Images

He added that another possible impact would be on financial markets, as China’s high savings rate has been supporting global markets. China has one of the world’s highest savings rates among individuals, and many retail investors are investing their extra cash, or the money is being held in pension funds.

The census also showed that births continued to fall, dropping 15% in 2020 — a fourth straight year of decline.

Experts have said that China’s aging problem goes beyond its one-child policy and that other changes are needed to boost growth as births fall and its population ages. Similar to other major economies, high housing and educational costs in China have deterred people from having children in recent years.

I think this is a very pressing issue, that China really needs to tame this grey rhino, as everybody knows the problem is there, everybody knows they need to do something.

Raymond Yeung

Greater China chief economist, ANZ

Yeung told CNBC that the country needs to boost its labor productivity instead.

He said that the country’s falling birth rate is unlikely to reverse, even if it relaxes its one-child policy.

“More importantly, China (should) continue to sustain growth through technological development, go for high tech, go for high value-add, go for transformation of the whole supply chain, in order to support the economic growth on a sustainable basis,” he said, adding that this is a “more realistic” approach than focusing on its population numbers.  

China’s economy has relied heavily on industries such as manufacturing that require large amounts of cheap labor. But rising wages are making Chinese factories less attractive, while workers will need higher skills to help the country become more innovative.

“I think this is a very pressing issue, that China really needs to tame this grey rhino, as everybody knows the problem is there, everybody knows they need to do something,” he said.

The term “grey rhino” refers to highly obvious, yet ignored threats.

— CNBC’s Evelyn Cheng contributed to this report.

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