Tiger scandal costs shareholders $12bn

THE sex scandal that engulfed Tiger Woods may have cost companies endorsed by the world’s No. 1 golfer up to $12 billion (€8.3bn) in losses, according to a study by two economics professors from the University of California.

The study, by researchers Victor Stango and Christopher Knittel, gave an estimate for damage to the market value of Woods’ main sponsors caused by revelations of alleged extramarital affairs. “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,’’ the researchers wrote, adding that millions of shareholders were affected.

“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,’’ Stango said in a statement.