"Shareholder Value Destruction" following Tiger scandal
This article was originally published in The Rose Sheet
Executive Summary
New report from the University of California, Davis, focuses not on Tiger Woods' future earning potential, but instead "estimate[s] losses that may be larger, more widely felt, and more immediate: those incurred by shareholders of the firms paying Mr. Woods to endorse their products." Professors Christopher R. Knittel and Victor Stango figure that shareholders of companies that sponsored the pro golfer lost $5 bil.-$12 bil. in wealth in the two weeks between Woods' car accident and announced leave-taking from golf. Losses were measured "relative to both the entire stock market and a set of competitor firms," they note. Woods' top five sponsors - P&G's Gillette, Accenture, Nike, Electronic Arts and Gatorade - each lost 2%-3% of their aggregate market value after the car accident, the authors assert. Gillette announced Dec. 12 it would "limit" Woods' role in marketing and promotional efforts (1"The Rose Sheet" Dec. 21, 2009)
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