A study from researchers from Carnegie Mellon University's Tepper School of Business concluded that Nike Golf has benefited from its continued sponsorship of with Tiger Woods. Nike lost 105,000 golf-ball customers in the six months after the
golfer's sex scandal went public. But the losses would have cost Nike Inc. $1.6
million in profits had they dropped the golfer.

Researchers employed sales figures of Nike golf balls starting in 2000 (the year Woods began endorsing Nike golf equipment) and extrapolated its findings over the entire Nike golf equipment line.

“In golf ball terms, the endorsement of Nike products by Tiger Woods, which began in 2000, resulted in the acquisition of approximately 4.5 million customers and $60 million dollars in profit (in 1997 dollars) for the last 10 years,” a news release on the study noted.

“From the findings of this study, which involve one specific product, we conjecture that similar market impacts have been realized across a full line of golfing equipment, which Tiger Woods was paid $180 million for 10 years (in 1997 dollars) to endorse,” said Kevin YC Chung, a doctoral candidate and one of three from Carnegie Mellon involved in the study. “Having found that $60 million was recovered in the golf ball sector alone, we project that this would intensify the overall profits and losses across the golfing industry.”

The fact that Nike retained Woods following his off-course controversies also paid a dividend, the study found. “In the six months following Mr. Woods' highly publicized personal scandal,” the news release state, “Nike lost approximately 105,000 customers. However, these losses were not gained by other brands as the negative publicity resulted in a net loss to the golfing industry, overall, of $7.5 million in profit.”

“Although several major sponsors cut ties with Tiger Woods — Nike did not,” said Timothy Derdenger, assistant professor of economics and strategy at Carnegie Mellon, in a statement. “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.”

“From the findings of this study, which involve one specific product, we
conjecture  that similar market impacts have been realized across a
full line of golfing equipment, which Tiger Woods was paid $180 million for 10 years (in 1997 dollars) to endorse.  Having found
that $60 million was recovered in the golf ball sector alone, we
project that this would intensify the overall profits and losses across
the golfing industry,” added doctoral candidate Kevin YC Chung.  “Although we have found Woods'
continued endorsement to be profitable for Nike, this may not translate
into similar results with non-golf related consumer goods — where the
celebrity is not inherently part of the enthusiasts community or where
his financial success is not directly tied to  the use of the endorsed
product.” 

The full study is below.