When Tiger Woods’ personal life and his golf game fell apart there was no shortage of self-appointed reputation experts who proclaimed that he was finished as a brand
Some sponsors quickly abandoned the fallen star and two professors at the University of California Davis Graduate School of Management created a media stir by announcing in December 2009 that his major sponsors could lose between $5 billion and $12 billion in shareholder value.
However, as early as mid-March, Advertising Age reported a study showing that, while Woods did major damage to his own brand, most of the brands he endorsed escaped relatively untarnished.
Now a fresh study by two different academics has concluded that Nike’s decision to stand by Woods was the right decision, because “even in the midst of the scandal, the overall profit was greater by $1.6 million for Nike with Tiger Woods than without him.”
Using a complex analysis relating to the sales golf-balls, the two professors from Carnegie Mellon University’s Tepper School of Business found that Nike lost 105,000 golf-ball customers in the six months after the golfer’s scandal broke. But they calculated that the losses would have been even greater had they ditched him and would have cost the company $1.6 million in profits.
Their detailed statistical workings may be incomprehensible to most ordinary people, but one conclusion is clear – when it comes to predictions in issue and crisis management, the pundits and other armchair are more than likely to be wrong