• Reuters, Wednesday, December 30, 2009 10:27 AM

Having Tiger Woods endorsing your product has proven costly to shareholders since news of his extra-marital profligacy broke last month. According to a study by University of California, Davis, researchers Victor Stango and Christopher Knittel, "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 point, they say, is that as beneficial as a superstar endorser may be to a product's fortunes, there can be a considerable downside.

The study looks at sponsors for which stock prices were available, including Accenture; AT&T; Tiger Woods PGA Tour Golf (Electronic Arts); Gillette (Proctor and Gamble); Nike; Gatorade (PepsiCo) and TLC Laser Eye Centers. Overall, Knittel and Stango conclude that the scandal reduced shareholder value in the sponsor companies by 2.3% but admit that there might be a "particularly large" margin of error due to some brands being subsidiaries.

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