When Tiger Woods hurts, so do businesses

Tiger Woods is sitting out of the game of golf for the rest of the year following reconstructive surgery this week, and his knee is not the only thing that is hurting. Companies dependent upon his presence at golf tournaments to boost attendance are going to be hurting too. Tiger's absence is going to cost sponsors an estimated $10 million.

The companies Tiger promotes, like Nike and Buick will be hurt because their payoff comes when he's out in the public eye. Nike depends on the visibility of their brand on what he's wearing and Buick puts their logo on his golf bag. No Tiger, no visibility. The sponsors also lose out on their chance for additional promotion when he wins a tournament.

Decreased attendance at PGA Tour events means the event organizers lose revenue from merchandise sales. Television networks lose advertising revenue because the number of projected viewers goes down, making the advertising time worth less.

The sport of golf and companies with revenues tied to it will undoubtedly be hurt by Tiger's hiatus from golf. They can only hope that this is just temporary, and that Tiger will be back next season and ready to play. If he decides not to return to the sport (or can't because he doesn't heal well), there will be an even bigger impact to the sport and the companies he endorses. Let's all cross our fingers and hope Tiger has a successful recovery and comeback. The sport depends on it.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.