Tiger Woods Scandal Cost Shareholders up to $12 Billion. 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. Overall, Knittel and Stango concluded that the scandal reduced shareholder value in the sponsor companies by 2.3 percent, or about $12 billion. Nike (NKE)/WikiChart. Financial impact for golf felt all around with Tiger Woods gone.
By Michael McCarthy, USA TODAY Tiger Woods' self-imposed exile could cost him millions in endorsement dollars and winnings.
But the loss of golf's biggest cash cow also could deliver a financial whammy to the PGA Tour, TV networks, corporate sponsors and other entities that rely on the world's No. 1 player to drive their business. Without the so-called Tiger Effect, pro golf could be staring at the Tiger Recession. The Tiger-less Tour begins in earnest today at the Farmers Insurance Open at Torrey Pines near San Diego. The former Buick Invitational is viewed as the de facto start of the season since it's typically Woods' first tournament and the first to attract broadcast TV coverage. Woods' vanishing act is taking a toll on tournament sales. After apologizing in a statement for his "infidelity" to wife Elin Nordegren, Woods announced Dec. 11 that he would take an indefinite break from pro golf. Tiger Woods to Wife, Kids: "I Am Deeply Sorry"
Breaking his silence for the first time since his November sex scandal erupted, Tiger Woods stood alone as he apologized to his wife Elin and supporters for having multiple affairs.
"Every one of you has good reason to be critical of me," he began. "I want to say to each of you simply and directly that I am deeply sorry for my irresponsible and selfish behavior I engaged in. "I know people want to find out how I can be so selfish and so foolish. People want to know how I could have done the things to my wife Elin and my children. See Tiger and his wife in happier times. Sponsors hit hard after Tiger scandal. Two economists from UC Davis have analyzed stock market returns following Tiger Woods’ car accident on Nov. 27 and subsequent announcement that he was indefinitely leaving golf.
Their findings suggest the scandal reduced shareholder value in the golfer’s sponsor companies by 2.3 percent, or about $12 billion. (Credit: Paddy Briggs/2005) UC DAVIS (US)—The reputation of golfer Tiger Woods isn’t the only thing that took a major hit in the wake of the scandal involving his extramarital affairs, a recent study finds. Shareholders of Nike, Gatorade, and other sponsors lost a collective $5 to $12 billion, with sports-related companies faring the worst. The losses are separate from—and potentially much larger than—damage to Woods’ own earnings. Tiger Woods affair economic impact - what is the impact of tiger woods affair on the economy. Tiger Woods' affair resulted in a well-publicized car crash the day before Thanksgiving 2009.
How did this impact the economy? According to research by two economics professors, it cost Tiger Woods' corporate sponsors $12 billion in lost stock value. Between November 25 and December 13, companies such as Gatorade, Nike and Electronic Arts stock prices fell 2.3%, costing shareholders $12 billion. Another impact could be lower viewership once the affair made Tiger decide to sit out that season. Nielson ratings showed that viewership is 50% higher when Tiger is playing a tournament.It is difficult to estimate the total impact this will have on the $75 billion golf industry.
Tiger earns close to $100 million a year from his winnings and his endorsements. Tiger Woods Booted From Econ Textbook : Planet Money. Industry experts optimistic that Tiger Woods's absence will have limited economic impact. There have been a lot of gloomy predictions about the impact the Tiger Woods scandal, and his self-imposed hiatus, might have on America's annual $75 billion golf economy.
Many industry experts say that fears are overblown, however, and they are optimistic that whatever impact is felt will be short-lived. His absence will be felt most by broadcasters. According to research by Nielsen, TV ratings for tournaments when Woods plays are 50 percent higher than ratings for tournaments when he doesn't. Neal Pilson, former president of CBS Sports and now a sports broadcast consultant, says that Tiger's indefinite leave from competition is affecting TV advertising purchases for 2010 PGA Tour events.
Because of the soft economy, advertising inventory for the first half of 2010 wasn't sold out before the Woods scandal erupted on Thanksgiving. Sports Law Blog. Tiger Woods' mistress scandal costs shareholders of sponsors like Nike, Gatorade $12 billion.