Tuesday, December 29, 2009

What's in a Name?

And you think we go full nerd on you? How about determining the amount of money Tiger Woods' sponsors lost in the wake of his minor traffic accident? Two UC-Davis Economists, Christopher R. Knittel and Victor Stang, did just that.

Here's the abstract:

We estimate that in the days beginning with Tiger Woods' recent car accident and ending with his announced \ inde finite leave" from golf, shareholders of companies that Mr. Woods endorses lost $5-12 billion in wealth. We measure the losses relative to both the entire stock market and a set of competitor firms. Because most of the firms that Mr. Woods endorses are either large or owned by large parent companies, the losses are extremely widespread. Mr. Woods' top five sponsors (Accenture, Nike, Gillette, Electronic Arts and Gatorade) lost 2-3 percent of their aggregate market value after the accident, and his core sports-related sponsors EA, Nike and PepsiCo (Gatorade) lost over four percent. The pace of losses slowed by December 11, the date on which Mr. Woods announced his leave from golf, but as late as December 17 shareholders had not recovered their losses.

That's right sports fans, BILLIONS. Even if you don't believe in morality and "all that stuff," perhaps you can think of a few million or billion other reasons to behave in a different manner than you'd like.

Full study here, if you're interested.

And we do hope that Tiger Woods has "abdicated" his crown to Tebow, if it's worth $100 million a year. We suspect there are a few orphanages that wouldn't mind seeing that crown passed either.

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