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December 31, 2021

AT&T; drops Tiger amid claim he caused $12B corporate loss

It’s the story that won’t go away.

Yes, many facets of Tiger Woods’ lurid tale do not belong on MSN Money. Like that he needed emergency plastic surgery after Elin whacked him in the face with a nine iron. Or that he’s now rumoured to be in sex therapy (sex therapy!).

But there is also a huge financial piece to his still-unravelling chronicle that's worth discussing, and that aspect’s interest level has hit a fresh peak with a few recent bits of news.

For starters, communication giant AT&T announced today it will drop Tiger from its sponsorship, the third of his major endorsers to fully separate themselves from the golfer.

Both Accenture and Gillette chipped Woods from their roster earlier in December.

So, if you’re scoring at home, the breakdown on how Tiger’s sponsors have handled his scandal looks like this:

-Dropped: Accenture, AT&T, Gillette.
-Supporting: Nike, EA Sports, Gatorade (though Tiger’s brand drink has been discontinued) and Tag Heuer (which will “respect his desire of privacy” and cut down on Tiger’s marketing presence in the coming months, according to its website)

An impressive resume when you look at it, no? Which brings us to …

… The second big piece of news. While Tiger’s career earnings were well documented, it wasn’t quite as clear how much each of his sponsorship deals was worth. AT&T, for one, never admitted how much it had invested in the golfer.

But while we’ll never know for sure how much Tiger lost in all this, it seems like we’re closer to measuring things going the other way.

A new study from the University of California estimates Woods’ infidelities (and the resulting fallout) have cost shareholders of the firms that endorsed him $12-bilion in value.

Victor Stango, a Cal professor of economics, looked at stock market returns for the 13 trading days between Tiger’s U.S. Thanksgiving Day crash and Dec. 17, a week after he announced he’d be taking a leave from professional golf.

To get the figure, Stango compared the stocks to how they’d performed over the past four years, as well as the fluctuations of the total market and competing stocks relative to the ones involved with the golfer. (Read more about the research here.)

“Total shareholder losses may exceed several decades’ worth of Tiger Woods’ personal endorsement income,” Stango said.

Twelve billion dollars. Believe that number or not, but whatever you do, be sure to archive it in the ever-growing list of reasons why Tiger Woods is probably ready for the New Year.

By Jason Buckland, MSN Money



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Gordon PowersGordon Powers

A long-time fund company executive, Gordon Powers now heads up the Affinity Group, a financial services consulting firm. Gordon was a personal finance columnist for the Globe & Mail for many years, has taught retirement planning...

Jason BucklandJason Buckland

The modern-day MC Hammer of money, Jason can often be seen spending cash that isn’t his with the efficiency of a Wilt Chamberlain first date. After cutting his teeth as a reporter for the Toronto Sun, he joined the MSN Money team with...