A press release from UC Davis discusses an event study done by economists Chris Knittel and Victor Stango, which examines the stock market returns to Woods' sponsors in the wake of the scandal. Here's the punch line:
To assess shareholder losses, the economists compared returns for Woods’ sponsors during this period to those of both the total stock market and of each sponsor’s closest competitor.
Knittel and Stango also reviewed returns for four years before the car accident to determine how each sponsor’s market performance normally correlates with that of the total market and of competitor firms.
The study focused on nine sponsors for which stock prices are available: Accenture; American Express; AT&T; Tiger Woods PGA Tour Golf (Electronic Arts); Gillette (Proctor and Gamble); Nike; Gatorade (PepsiCo); TLC Laser Eye Centers; and Golf Digest (News Corp.).
Overall, Knittel and Stango concluded that the scandal reduced shareholder value in the sponsor companies by 2.3 percent, or about $12 billion.
“(This) pattern of losses is unlikely to stem from ordinary day-to-day variation in their stock prices,” the researchers wrote.
Investors in the three sports-related companies (Tiger Woods PGA Tour Golf, Gatorade, and Nike) fared the worst, the study found. They experienced a 4.3-percent scandal-generated drop in stock value, equivalent to about $6 billion.
Two to four per cent of your company is a lot to have tied up in a wayward athlete. I don't doubt the measurement that Knittel and Stango have done, but the magnitude of such studies sometimes has a whiff of excess response to information. Here's a link to the study itself (pdf), which seems worth a read when you get the chance.