(Story updated with news that Tiger has set up a bachelor pad in New York.)
NEW YORK (
) -- How far-reaching has the Tiger Woods scandal been?
Big enough to destroy Tiger's reputation? Yes. Big enough to damage the fortunes of the companies that endorsed him? Sure. How about big enough to ruin the very notion of celebrity endorsement? According to two U.C. Davis economics professors, absolutely.
"It appears that the scandal sent a negative market-wide signal about the reputation risk associated with celebrity endorsements," U.C. Davis economics professors Christopher Knittel and Victor Stango said a report released late last week.
Knittel later told the
that as the Tiger scandal erupted, some consumers who used to buy from
Golf began buying from
Callaway Golf Company
Indeed, late last year, the professors came out with a study suggesting that big Tiger Woods sponsors -- such as
( ERTS) and
Gatorade -- shed 2% to 3% of their aggregate stock market value after his fateful car accident on November 27. Meanwhile, core sponsors like Electronic Arts, Nike and Pepsi lost more than 4%.
"We find that as sponsors lost market value, competitors gained market value," the professors said in their updated report. "More compelling is that these gains seem to accrue only to competitors that are themselves not heavily invested in celebrity endorsements."
There, indeed, is the rub: Tiger sponsors' competitors with at least one celebrity endorsement deal didn't experience any gains. For the study, Knittel and Stango studied ten rival sponsors for each Tiger sponsor and split them into two groups: companies that don't tend to use celebrity endorsers and just advertise in a more traditional manner, and those that use celebrity endorsers like Tiger Woods.
The professors say they continue to do be confident about the results of last year's study.
In related news, according to US Magazine, Tiger, now newly single, has moved into a new apartment in downtown Manhattan last weekend.
The report said that a witness saw Tiger "introducing himself as the new neighbor."
Meanwhile, The Hollywood Reporter said Tiger's ex-wife Elin has been revamping a $3 million waterfront home in Sweden and will also be living at a family estate close to Orlando during the year.
-- Written by Andrea Tse in New York.
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>>Tiger Woods' Sponsors Jumping Ship
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