An interesting issue little explored in the celebrity endorsement literature is whether or not the activities of a celebrity endorser affect company performance. We examine the impact of Tiger Woods’s tournament performance on the endorsing firm’s value subsequent to the contract signing. We do not find a relationship between Tiger’ss tournament placement and the excess returns of Fortune Brands (parent of Titleist). This is likely due to Titleist being a very small contributor to the total market value of Fortune Brands. We also fail to find a significant relationship for American Express suggesting the market does not view a golfer endorsing financial services as credible. We do, however, find a positive and significant impact of Tiger’s performance on Nike’s excess returns suggesting that the market values the additional publicity that Nike receives when Tiger is in contention to win.
Farrell, K.A., Karels, G.V., Montfort, K.W. and McClatchey, C.A. (2000), "Celebrity performance and endorsement value: the case of Tiger Woods", Managerial Finance, Vol. 26 No. 7, pp. 1-15. https://doi.org/10.1108/03074350010766756
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