Many companies on the long list of Tiger Woods’ sponsors abandoned the golfer after a tumultuous year, but Nike stuck with him. And that proved to be a good decision, according to researchers at Carnegie Mellon.
Researchers estimated that, purely in regards to golf balls, Nike’s agreement with Tiger resulted in 4.5 million customers over the last 10 years.
In the six months after news of Woods’ scandal broke, Nike lost 105,000 customers. But those customers did not seek other brands as the entire golf ball industry lost $7.5 million in profits.
“Although several major sponsors cut ties with Tiger Woods — Nike did not,” said Timothy Derdenger, as assistant professor that helped conduct the study. “So we examined the net effect on Nike’s sales and market share. What we found is that by maintaining their relationship with Tiger Woods, Nike’s overall profit in golf ball sales was $1.6 million greater than it would have been without him.”
Then again, considering the hundreds of millions of dollars Nike has payed Woods, the cost for that profit appears too high. And, it seems, had Tiger not gotten in trouble in the first place, the industry as a whole would have stayed afloat.
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