Shareholders of companies that used endorsements from Tiger Woods to sell their products have lost an estimated $5 billion to $12 billion because of the star golfer's well-publicized zipper problem, according to a study at the University of California.
“We estimate that in the days beginning with Tiger Woods' recent car accident and ending with his announced ‘indefinite leave’ from golf, shareholders of companies that Mr. Woods endorses lost $5 billion to $12 billion in wealth,” researchers reported.
“Because most of the firms that Mr. Woods endorses are either large or owned by large parent companies, the losses are extremely widespread … Woods’ top five sponsors (Accenture, Nike, Gillette, Electronic Arts and Gatorade) lost 2-3 percent of their aggregate market value after the accident, and his core sports-related sponsors EA, Nike and PepsiCo (Gatorade) lost over four percent.”
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Losses were calculated relative to both the entire stock market and to a set of competing firms, and while the pace slowed by Dec. 11, when
Woods announced his leave from golf, shareholders had not recouped losses a week later.
Woods earns roughly $100 million annually in endorsement income, far more than any other athlete.
Most observers believe that the companies that hired Woods before the publicity surrounding his infidelities will decline to hire him again even if he convinces the public his behavior has changed.
However, Woods’ agent, Mark Steinberg, has said it would be “premature and inappropriate” to talk about Woods’ specific business relationships, The Economic Times reports.
“Each sponsor has unique considerations and ultimately the decisions they make we would fully understand and accept,” Steinberg said.
Meanwhile, the Associated Press reported days after the scandal broke that the controversy has been a boon for online publications, even though it hasn't generated the same amount of Internet traffic as Michael Jackson's death or President Barack Obama's inauguration.
Google Inc. and Yahoo, which combined process more than 80 percent of all Internet searches in the U.S., have said they have seen a significant spike in traffic from people looking for information on the golf superstar and his alleged extramarital affairs.
This month, Yahoo said searches for Woods' name were up more than 3,900 percent during the past 30 days. Neither Google nor Yahoo would provide specifics about how many more people were searching.
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