With all the media coverage about Lance Armstrong, this question arises: Just how much money do celebrities make for endorsing companies or products? To give you an idea, check out this Forbes article about Michael Jordan. Here’s a quote from the article:
“Yet even out of the spotlight, the business of Michael Jordan has never been better. We estimate that Jordan earned $60 million over the past year mainly through his endorsement deals with Nike, Gatorade, Hanes, Upper Deck, 2K Sports and Five Star Fragrances. He also owns five restaurants and a car dealership in North Carolina. His annual earnings are greater than any other sports figure save Tiger Woods who topped our world’s highest-paid athletes this year.”
In case you didn’t know, Nike dropped Lance Armstrong back in October after the U.S. Anti-Doping Agency released an extensive report on the doping allegations against him. You can read the full article here and the full report of the doping allegations here.
MIT recently released an article entitled “Celebrity Endorsements, Firm Value and Reputation Risk: Evidence from the Tiger Woods Scandal” by Christopher R. Knittel and Victor Stango. This article focuses on the effects that his scandal had on the stock market. The article can be found here.
