This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Tiger Woods Costs Investors $12 Billion

In addition to PepsiCo and Nike, the study tracked the performance of seven additional publicly traded sponsors: Accenture (ACN - Get Report); American Express (AXP - Get Report); AT&T (T - Get Report); Electronic Arts (ERTS); Procter & Gamble (PG - Get Report); TLC Vision (TLCVQ); and News Corp. (NWSA - Get Report).

News Corp. owns Golf Digest; Gillette is owned by P&G; Electronic Arts offers the Tiger Woods PGA Tour Golf game.

Overall, the UC Davis study concluded that the scandal reduced shareholder value in the sponsor companies by 2.3%, or about $12 billion, a finding that the authors said cannot be explained away by typical daily variation in stock performance.

Not surprisingly, the three sports-related companies, Electronic Arts, Gatorade and Nike, fared the worst, experiencing a 4.3% scandal-generated drop in share value. That percentage drop equals a stock market handicap of $6 billion.

Accenture, one of the first companies to drop Tiger Woods -- and a company that is not sports-specific -- experienced no ill stock market effects from the scandal.

"Nike and other premier sports-related sponsors are special for an athlete like Tiger Woods," the UC Davis finance professors explained. "They are themselves powerful brands that add value to Tiger's brand and create other financial opportunities for him. This gives a premier sports sponsor the bargaining power to capture some of the profits generated by an endorsement deal with Woods -- so that if the Tiger brand is tarnished, those profits may decline."

While the pace of losses had slowed by Dec. 11 -- the day Woods announced his leave from golf -- the study found that by as late as Dec. 17 shareholders had yet to reverse their losses.

2 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
ACN $93.94 0.00%
AXP $77.97 0.00%
NKE $99.88 0.00%
NWSA $16.15 0.00%
PEP $95.95 0.00%

Markets

DOW 17,712.66 +34.43 0.19%
S&P 500 2,061.02 +4.87 0.24%
NASDAQ 4,891.2190 +27.8570 0.57%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs