The study released on Monday, 28 December, estimated that the damage to Woods’ main sponsors caused by revelations of alleged extramarital affairs was approximately $12 billion.
The researchers Victor and Christopher said, "We estimate that shareholders of Tiger Woods' sponsors lost $5-12 billion after his car accident, relative to shareholders of firms that Mr. Woods does not endorse."
They also added, "Our analysis makes clear that while having a celebrity of Tiger Woods’ stature as an endorser has undeniable upside, the downside risk is substantial, too,”
Tiger Woods is considered as the world’s wealthiest athlete. He used to earn approximately $100 million a year from endorsement deals before his troubles. But when, on December 11 he confessed the “infidelity” charges to his wife Elin Nordegren, some of his sponsors backed away from him (like Gatorade drinks of PepsiCo Inc.).
The researchers studied sponsors of Tiger Woods including Accenture; AT&T; Tiger Woods PGA Tour Golf (Electronic Arts); Gillette (Proctor and Gamble); Nike; Gatorade (PepsiCo); TLC Laser Eye Centers and evaluated the estimated damages by their stock prices that were available, through quoted prices for the parent companies.
Overall, Knittel and Stango concluded that the scandal reduced shareholder's value in the sponsor companies by 2.3 percent, or about $12 billion.
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