Two weeks ago, we mentioned that idea of "reputational risk" insurance being floated in the wake of the Tiger Woods scandal.
But how to measure the damage? This is not like, say, a fire, where an insurer can simply tally up structural damage and replacement cost of contents.
Well, yesterday two professors from the University of California, Davis attempted to put a price tag on the damage, and the number's pretty astounding.
Professors Christopher Knittel and Victor Stango estimate that shareholders in the companies that Woods endorsed lost a total of $5 billion to $12 billion in value in the time between his much-publicized SUV crash and his announcement that he was leaving golf indefinitely. And those calculations don't include losses to Wood's current- or future endorsement income.
Interestingly, the researchers concluded that Woods' sports-related endorsees suffered substantially more economic damage than non-sports companies, like business consultant Accenture.