Study: Tiger Woods Scandal Cost His Sponsors up to $12 Billion. Tiger Woods Scandal Cost Shareholders up to $12 Billion. (PhysOrg.com) -- Shareholders of Nike, Gatorade and other Tiger Woods sponsors lost a collective $5 to $12 billion in the wake of the scandal involving his extramarital affairs, according to a new study by researchers at the University of California, Davis.
The losses are separate from - and potentially much larger than - damage to Woods’ own earnings. “Total shareholder losses may exceed several decades’ worth of Tiger Woods’ personal endorsement income,” said Victor Stango, a professor of economics at the UC Davis Graduate School of Management and co-author of the study. With fellow UC Davis economics professor Christopher Knittel, Stango looked at stock market returns for the 13 trading days that fell between Nov. 27, the date of the car crash that ignited the Woods’ scandal, and Dec. 17, a week after the golf great announced his indefinite leave from the sport. On the other hand, Accenture, a global management consulting firm, experienced no ill effects following the accident. Did Nike Really Gain From Tiger Woods' Scandal, as the Numbers Suggest? Last Updated Dec 14, 2010 8:38 PM EST From a financial point of view, Nike (NKE) was right to stick by Tiger Woods despite the scandal that enveloped him in 2009, but the fascinating new study that makes this case also suggests that when brands encounter controversy they ought to destroy the village in order to save it, so to speak.
That can't be right. Carnegie Mellon University's Tepper School of Business looked at Nike golf ball sales from the pre- and post-Woods scandal periods, in which most brands chose to sever their ties with Woods. The academics compared that to the effect Woods had on Titleist before and after he ended his endorsement of that company in 2000.
Overall, the scandal cost Nike $1.7 million in sales and lost the company nearly 105,000 customers, the study shows: However, Woods' endorsement -- which cost $200 million -- was so lucrative to Nike that despite that decline the company still saved money* it would have lost had it abandoned the golfer: Is Tiger Woods golf game being affected by the recent loss of sponsor Tag Heuer? - National celebrity infidelity. For a while, it seemed like Tiger Woods was off to a good start.
Now things are rapidly going downhill. It’s obvious that the Bridgestone Invitational will not be the comeback Tiger, his fans, and the world of golf were hoping for. But there may be a plausible explanation as to the reason why. The decline of Tiger Woods’ golf game seems to coincide with Golf World’s announcement of Tiger’s recent loss of Tag Heuer as a sponsor. The financial implications of losing yet another corporate sponsor because of the infidelity scandal that led to his divorce, could be weighing heavily on Tiger Wood's mind. See also Tiger Woods Net Worth Since the Infidelity Scandal and His Divorce Settlement PHOTOS: Tiger Woods Net Worth Since His Divorce For Tiger, losing Tag Heuer’s sponsorship at such a critical stage in his golf career, may be the proverbial “straw that broke the camel’s back.”
How Sponsors and Endorsers come to a Parting of the Ways But for Tag Heuer, it took almost 2 years. For Nike, the Tiger Woods Brand Was Too Big to Fail. Study shows Tiger Woods impact on Nike and Golf - Business Review USA. Tiger Woods' mistress scandal costs shareholders of sponsors like Nike, Gatorade $12 billion.