My finance view

The complex prescription for successful health care investing usually includes the careful consideration of drug pipelines, current-product sales, patent expirations, potential mergers and stock dividends.

Add to that list in 2010 an untested ingredient called health care reform.

"Institutional investors don’t want to see big headlines about the health care industry that they weren’t able to predict," said Les Funtleyder, health care strategist for Miller Tabak & Co. in New York. "So they’re currently operating on the fear of increased regulation or pricing pressures."

If you’re in any way optimistic that the outcome of health care reform won’t be bad for drug companies, the current fears mean that health care stock prices will never be more reasonable than they are now. Prices are depressed and the dividends solid.

"Once we know what the reform will look like in detail we can then move forward," believes Linda Bannister, health care analyst for Edward Jones in St. Louis. "Managed care is the most at risk from health care reform, and then the risk declines from there."

Beyond the potential negatives of reform on drug stocks there may be some long-term positives.

"If 30 million people who didn’t have health insurance were to have it, imagine what that does for a pharmaceutical company," said James Molloy, pharmaceutical analyst for Caris & Co. in Boston. "The plus side of drugs is that most people with insurance never pay full price, but instead pay a co-pay, and you can imagine what kind of car everyone would drive if they had a co-pay for their gas."

While awaiting a clear prognosis on reform, investors must fall back on traditional considerations that tend to favor big pharma that keeps growing bigger.

Merck & Co., whose stock is flat this year after a 25 percent gain last year, is recommended by Bannister and Funtleyder because its strong product pipeline means it won’t require the endless cutting of costs to be profitable. It faces loss of patents on several key drugs in coming years and fierce competition, yet its financial health is strong and its research excellent.

Merck’s launches of diabetes drug Januvia, papillomavirus vaccine Gardasil and HIV drug Isentress have all been successes, while its acquisition of Schering-Plough could result in $3.5 billion in annual cost-saving synergies by 2012. More than half of Merck’s sales are outside the U.S.

Johnson & Johnson, its stock down slightly this year after last year’s 11 percent rise, has suffered through a period of patent expirations, but Bannister believes its drug pipeline coupled with continued efficiencies should accelerate its growth. It benefits from being the world’s largest and most diverse health-care company, with the top or number-two leadership position in 70 percent of its products.

"I cover mostly smaller names of the world and try to find those with downside protection in the form of some core value," said Molloy.

Warner Chilcott Plc, whose stock is down 8 percent this year after last year’s 96 percent gain, is Molloy’s top pick in part because it has massive cash flow. This marketer of women’s health and dermatology products recently purchased Procter & Gamble’s prescription drug business. Its product mix includes hormonal oral contraceptives and hormone therapy products for menopausal symptoms, as well as topical products for psoriasis and an antibiotic for acne.

The other Molloy favorite is Endo Pharmaceutical Holdings Inc., up 10 percent this year after last year’s 21 percent decline. It is a specialty drug company in pain management whose flagship product is the Lidoderm adhesive patch for post-shingle pain. The company, which cross-sells many of its pain-related products, last year acquired Indevus Pharmaceuticals, which specializes in urology and endocrinology.

"My biggest consideration is whether the good news or bad news is factored into the stock price," explained Molloy. "I also ask whether its primary drug has to be a $1 billion drug for the company’s stock price to go higher."

Novartis AG and Bristol Myers Squibb Co. are Funtleyder’s other favorites. Though he says "no one is firing on all cylinders right now," there is little downside, they offer solid dividends and their upside is the enormous potential of their drug pipelines.

Mergers can come fast and furious among drug companies, but is an unpredictable trend that none of the experts expect will take place soon.

"Pharma has been a consolidating industry ever since it was an industry," said Funtleyder, noting that patent expirations and slowing sales drove the most recent mergers and innovation may someday drive the next go-around. "Consolidation happens in waves and last year was a pretty big wave, so we think there will be a break for a couple of years before we see the next wave of consolidation."

Other Bannister choices include Eli Lilly & Co., Pfizer Inc. and Abbott Laboratories.

"If a company like Lilly is unable to execute its pipeline, then at some point it is going to have to make a sizeable acquisition or it will potentially be acquired," concluded Bannister, who considers investment in Lilly a three- to five-year story. "Yet most of these companies’ strategies are licensing deals or small ‘tuck-in’ acquisitions, so I’m not betting on a new wave of industry consolidation."

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Toyota president Akio Toyoda accepted on Thursday a formal invitation to testify at a hearing to be held next Wednesday.

The House Oversight Committee sent the invitation Thursday morning. Toyoda had initially said he would not appear before the committee but would instead send North America chief Yoshimi Inaba.

But late Thursday, Toyoda released a short statement: "I have received Congressman Towns’ invitation to testify before the House Committee on Oversight and Government Reform on February 24 and I accept. I look forward to speaking directly with Congress and the American people."

The invitation sent by Committee Chairman Edolphus Towns, D-N.Y., reads: "There appears to be growing public confusion regarding which vehicles may be affected and how people should respond. In short, the public is unsure as to what exactly the problem is, whether it is safe to drive their cars, or what they should do about it."

After Toyoda announced his acceptance, Towns released his own statement, with Ranking Member Darrell Issa, R-Calif,: "We are pleased Mr. Toyoda accepted the invitation to testify before the Committee. We believe his testimony will be helpful in understanding the actions Toyota is taking to ensure the safety of American drivers."

Earlier Thursday, the committee issued a subpoena for "all documents relating to Toyota motor vehicle safety and Toyota’s handling of alleged motor vehicle defects and related litigation" that are held by Toyota’s former U.S. counsel Dimitrios Biller.

Biller has claimed that he possesses documents that proved Toyota hid key findings of safety defects. Even before Thursday’s news, Toyota had filed an injunction to prevent Biller from making those documents public, but a Committee aide said the Committee’s subpoena overrides the state-level injunction.

"Mr. Biller is a former Toyota attorney who left the company in 2007," Toyota spokeswoman Cindy Knight said in an e-mailed statement. "He would have no knowledge about Toyota matters since that time and is not a reliable source of information."

Toyota will continue to fight Biller’s allegations, Knight said.

Mr. Toyoda has been criticized for being slow to speak up regarding the issues. The carmaker has recently faced a string of massive recalls and, only yesterday, became the subject of a second ongoing National Highway Traffic Safety Administration investigation into potential safety problems with its cars.

Also, late Thursday, the NHTSA announced it had officially opened an investigation into possible steering problems with Toyota’s Corolla compact cars.

The investigation involves reports that Corolla cars can wander or drift at highway speeds. Seven people have been injured in incidents that may have been related to the problem, according to a NHTSA report.

Toyota plans to cooperate fully in the investigation, a Toyota spokesman said.

Gene Grabowski, head of the crisis communication practice for Washington-based Levick Strategic Communications, said Toyoda "needs to be very well-prepared."

Grabowski’s firm has worked with more than a dozen witnesses called to testify on Capitol Hill, he said, and the most important thing they all must remember is to remain humble. A witness must remember that the members of Congress need to be seen helping their constituents and the best thing for a witness to do is to play his part.

"Your job in a hearing is to assist the members of Congress," he said, "and sometimes that means taking some lumps."

If Mr. Toyoda is smart, Grabowski said, he’ll come to Washington a few days early to meet privately with the Congressional members he’ll be testifying for.

"If you go in cold and they don’t know you," Grabowski said, "they’re far more likely to attack you." 

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Goldman Sachs has filed a lawsuit against seven former Atlanta-based executives in its wealth management division for soliciting employees and former clients after their departure for rival Credit Suisse.

The suit, filed Feb. 17 in U.S. District Court in Atlanta, alleges that Credit Suisse facilitated the executives’ departure promising payouts worth of millions of dollars.

The suit seeks to block the defendants from contacting their former Goldman clients and colleagues.

The five vice presidents and two associates are accused of “pirating” Goldman’s clients and trying to coax employees to defect to Credit Suisse in violation of non-solicitation clauses, the suit alleges. The suit was first reported by Reuters.

Named in the suit were: David Greene, Craig Savage, Andrew Thompson, Sharran Srivatsaa, John Pitt, Stephanie Dennard and Kim Tyson.

Atlanta’s wealth management firms have been embroiled in the industry-wide shakeup of personnel and clients, with established players and newcomers fighting over top talent.

The lawsuit states that the seven investment executives “abruptly” left Goldman on Feb. 5, after Credit Suisse offered the team “tens of millions of dollars to leave.”

The group “immediately began soliciting Goldman Sachs’ clients and employees in violation of non-solicitation clauses” that Greene, Savage, Thompson, Srivatsaa and Pitt had previously accepted. The suit alleges that Dennard and Tyson did an end around the non-solicitation clauses by approaching former colleagues and clients on their superiors’ behalf to convince them to move over to Credit Suisse, and also improperly used confidential Goldman information.

The suit states that Greene and Savage met with the head of Goldman’s Atlanta office late Feb. 5 and announced their intent to leave, and later Greene said in a phone call that he had been promised $11 million to join Credit Suisse.

The suit also alleges that the defendants told clients about a shakeup and claimed that it had destabilized the Atlanta office.

Another Goldman executive claimed in the suit he received an unsolicited offer to leave for Credit Suisse in exchange for $10 million.

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Rural/Metro Medical Services is launching a new service designed to help the homebound and seniors in case of emergency.

Many people will remember the television commercials in which an elderly woman pushes a button on a wearable monitor for help after falling. Rural/Metro’s HomeHelpLine service offers a similar service with a major difference: Calls come in to trained emergency medical dispatchers who respond using Rural/Metro’s network of local hospitals and ambulance services.

“When you call a LifeLine or other national providers, calls come through security companies or you’re really dealing with a call center that could be anywhere in the country,” says Jay Smith, public affairs manager. “Our dispatchers are medically trained EMTs and emergency dispatch. We’re local and we’re trained.”

Launched in mid-December, the service has signed up 60 customers so far with a goal of 500 by the end of Rural/Metro’s fiscal year in July. The service is currently available in Erie and Niagara counties, but plans call for extending service into all eight Western New York counties.

The company is targeting seniors and homebound individuals, as well as the children of such people who worry they can’t check in on their loved ones as often as they’d like. Smith says the company is relying on brand recognition and Rural/Metro’s reputation in the region to close the deal.

Additionally, the company is targeting individuals recovering from surgery; those with chronic conditions; and anyone who lives alone or spends several hours at home alone on a regular basis.

The service is available for $24.99 per month. That’s lower than some national services, enabled in part by Rural/Metro’s existing equipment and infrastructure that results in less overhead, Smith says.

Based in Scottsdale, Ariz., Rural/Metro Corp. (RURL) is a national provider of emergency services in 22 states.

Locally, the company has more than 550 employees, including 450 EMTs and paramedics, and a fleet of 90 emergency vehicles that responds to more than 100,000 calls every year.

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BRIDGETON — A new Walmart Supercenter would produce an estimated $7 million a year in sales and property tax revenue beginning in 2012, the developer’s proposal says.

Bridgeton Rock Development LLC will present the number Tuesday to a government-appointed TIF Commission as part of the company’s application for up to $8 million in TIF financial benefits.

The $7 million in sales and property taxes is based on projected sales of $82.5 million and would be split among Bridgeton, the state, county and several other taxing jurisdictions. The terms of any TIF arrangement would determine how the money is allocated.

While Bridgeton officials embrace the idea, the proposal has stirred opposition in neighboring St. Ann. Officials there say a supercenter would mean the closing of a smaller, older Walmart on the border of St. Ann and Bridgeton. Ten percent or less of that store is in St. Ann, but it is St. Ann’s second-biggest source of revenue, behind a Shop ‘n Save.

St. Ann’s finances, already staggered by the decline of the Northwest Plaza, cannot take another hit, said city manager Matt Conley. He predicted layoffs of city employees would result, including a loss of police officers.

CHANGE IN TIF LAW

For years, local governments doled out tax-increment financing as a tool to encourage developers to locate in their cities. In 2007, the Missouri Legislature changed the law, taking some authority from the cities and adopting a regional countywide approach. That — combined with the downward spiral of the economy — put a lid on TIF requests.

Walmart’s proposal is only the second in St. Louis County to be considered under the new TIF law, which went into effect Jan. 1, 2008. University City recently approved a mixed-use residential and retail project.

Bridgeton officials say the amount of revenue their city would receive from the supercenter clearly would exceed the amount now realized from the current Walmart, at 10835 St. Charles Rock Road. That store originally was built entirely inside Bridgeton, but was expanded with a garden center that crossed over into St. Ann.

Bridgeton Mayor Conrad Bowers said it was safe to assume his city would gain in sales tax. "The store is going be larger, and have many more products, and the sales will be higher," he said.

Bridgeton Rock Development, an affiliate of THF Realty Inc., will make a formal presentation Tuesday to the Tax-Increment Financing Commission, made up of representatives of St. Louis County, the city and other jurisdictions.

TIF is a tax incentive that allows the developer to divert some funds that would go to taxes initially for development costs.

The developer is proposing to build a 159,000-square-foot Supercenter on about 13 acres on the south side of St guaranteed high risk personal loans. Charles Rock Road at Harmony Lane. The existing store, built in 1988, is almost 120,000 square feet — or about 40,000 square feet smaller.

THF said in a written proposal to the city that it was prepared to move immediately after getting approval. THF said it hoped to have title by this summer and open the Supercenter in the fall of 2011.

In addition to construction jobs, THF said the Supercenter would employ about 300 workers.

In September, Walmart closed another older, smaller store in Town and Country and opened a larger supercenter one mile away in neighboring Manchester. In St. Louis, a Sam’s Club was closed at the MarketPlace and reopened in adjacent Maplewood. Sam’s Club is a division of Wal-Mart Stores Inc.

NO SET POLICY

Wal-Mart officials say the company does not have a policy of closing older stores and rebuilding. In fact, the company is engaged in a large-scale remodeling program it calls "Project Impact."

Ryan Horn, senior manager of public affairs for Wal-Mart, said that Project Impact would fully remodel 80 percent of the Walmart stores in the U.S. in the next five years.

At the same time, the company’s other business strategy is to build new supercenter in some communities to modernize.

In Bridgeton, he said, the Supercenter would allow the company to "add full retail-grocery service and make it a modern Walmart. That’s the crux of it. There’s a real need for it in the Bridgeton-St. Ann area and it’s a way of better servicing our customers."

He said Wal-Mart had no intention of tearing down the existing Walmart in St. Ann and would put it on the market.

"We have a very good track record of marketing our buildings," he said.

Even if the TIF Commission recommends against the TIF request, the Bridgeton City Council could overrule it if six of eight council members agreed.

Bowers added: "In my judgment, I think that it (the supercenter) will happen because I really believe it’s good for the area, it’s good for the county. It’s not like we’re stealing this from another area; the store is in Bridgeton."

Bowers said no major development would occur at the now vacant site — formerly a Grandpa Pigeon’s and then a Value City — without financial assistance in part because of the demolition costs.

"The point is Wal-Mart is going to build a Supercenter and I’m pleased they want to be in Bridgeton and at a site that needs to be redeveloped," Bowers said. "As far as I’m concerned it’s the correct use of a TIF."

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Call it financial literacy for the rich.

Bank of Montreal’s private banking division will start offering cross-Canada seminars next month specially designed for affluent adults, including those who marry into money.

The invitation-only program enables a high net-worth client to enrol a spouse or another adult relative in a financial boot camp of sorts that teaches the basics of money management and keeping the family fortune intact.

BMO’s "Financial Focus" part-day seminars tackle a variety of day-to-day issues such as budgeting, mortgages, banking, cash-flow management, credit, investing and estate planning.

It launched the program at the urging of its well-off clients. Many believe a spouse or an adult family member lacks experience with personal finances, said Sara Plant, vice-president and national director of wealth services with BMO Harris Private Banking.

"We’re often having very personal discussions with them about their families. And in those discussions, it comes to light that our clients are experiencing some kind of change or transition," Plant said.

"There may be a marriage, a divorce, a death in the family, an inheritance or selling a business, a retirement – these are sort of transitional changes that we find our clients up against."

A high net-worth client is someone with investable assets of at least $500,000. The new spousal seminars are the latest evolution of a program the bank launched last year to educate rich youth, aged 18 to 25, on money management.

Its staff had received a flood of requests for training. Some clients worried their children would squander inheritances, while others believed their offspring were "under the influence" of an untrustworthy person such as a devious spouse or business partner.

"Individual clients have said, `I know you’ve got one for young people, but do you have one for adults to deal with the issues that we face?’" Plant said.

The bank held a pilot version of its new adult course in Toronto on Nov. 3. Women mostly attended but the seminar is geared toward both sexes. Sessions will be held in major cities from February to April cash advance payday loans.

BMO is not the only bank coaching clients on coping with the pressures of being rich. TD Waterhouse Private Client Services offers special seminars for wealthy women called "Securing Your Future" and a guide book for the children of prosperous clients.

Its high net-worth planning group, meanwhile, provides a "Monte Carlo" analysis to clients – a computer simulation that outlines the trade-offs between short-term wants and long-term capital preservation.

"The first million dollars seems like it will last forever, which isn’t true," said Dave Kelly, group head of the Private Investment Counsel at TD Waterhouse Private Client Services. "For anyone who is new into wealth – whether that’s a lottery win, inheriting or marrying into – … the concept of $5 million, $10 million, $20 million is awfully hard to appreciate when you haven’t had it before."

Last month, RBC Private Banking launched a financial literacy kit for clients’ children, in addition to individual education sessions. "One of their top concerns is preserving wealth for future generations," RBC says.

The Bank of Nova Scotia’s Private Client Group, meanwhile, held a one-day money management pilot program called "Let’s Talk $" for its clients’ adult kids, aged 22 to 27, in November. It will hold at least two more seminars this year and one will be in Toronto.

A number of foreign banks, including Citigroup, JP Morgan and UBS, are also offering so-called "affluenza" courses. Those programs teach skills such as distinguishing between gold diggers and true friends, according to press reports.

Barron’s, meanwhile, ran a 2005 story stating the "Brat Patrol" was the new "battleground" for private bankers. "Among wealthy parents and their bankers, the rallying cry is: `Don’t let the kids become the next Paris Hilton,’" the article said.

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Carolynn Ingerson Hoffman says she knew even as a little girl that she wanted to become a nurse and help sick people get better.

She says she also gained a strong work ethic from her father, who held two or three jobs at a time to earn enough to support a family of six girls and a boy in north St. Louis County.

Hoffman didn’t let a lack of money for education and partial deafness stemming from illnesses get in her way while pursuing her goal of a nursing degree. She got a scholarship and studied hard. Compounding the difficulty was that she was a divorced mother with a young son.

Then, after working as a registered nurse for several years, she pursued a new dream: a business to provide nursing services throughout the St. Louis area.

Her business, now called MediNurse Inc., marks its 25th anniversary this year. The business, originally named CompreHealth Inc., employs more than 100 full- and part-time workers and provides a wide range of nursing services for hospitals, businesses, organizations and individuals.

I understand that you overcame great personal difficulties to get to where you are in life. What is your best advice for others who similarly face great odds?

I guess I would say that growing up in a large family when I did had its challenges, certainly monetarily. I could also take you through the ’60s and ’70s and tell you what it was like at the time being a divorced mother who had to work.

Now, that was a challenge — just getting housing and credit were challenges. I’d like to think, and I do know, that it was because of women like me who opened doors — or crashed through them — that many women today have been able to move forward and upward. We fought the battles so that they could win the war.

My best advice for anyone is to just keep going. Don’t give up, find a way around every obstacle and find the opportunity in every challenge. You have to take control and make things happen — things you want to happen.

How has your hearing loss affected the way you’ve operated your business?

It has affected my career greatly. In the beginning, I was treated with kid gloves — kind of pitied. That surprised me, because I was elated I could even hear! I didn’t consider wearing hearing aids a handicap but rather blessings.

But because everybody seemed to be so sympathetic, I decided to use it to my best advantage in business. I could always get the best seat in a conference room and could say "excuse me" when I needed to think for a moment. I never hid the fact that I was hearing impaired.

I do need the best seating possible to hear. I do have trouble distinguishing words. Now I have to take a second person on marketing calls just to make sure I’m hearing correctly.

The need for nursing services seems to be ever increasing. Did you foresee that trend when you started your business?

In this business and others you have to pay attention to the trends and stay one step ahead of them. We’ve been through shortages, we’ve been through periods of oversupply. Now we’re looking at a national shortage of nurses unlike all others.

It was perfectly predictable. The largest block of nurses, the baby boomers, are retiring. There aren’t enough qualified faculty available in order to admit more nursing students. Nurses have so many more opportunities today other than actual bedside nursing. Add it all up and it spells shortage.

Would the legislation being considered in Congress do enough to address the nation’s health care crisis and bring affordable care to more people?

I haven’t read the Senate bill. I did, however, read the House bill — every page of it — and was appalled. …

Do I think what we are doing is good for health care and this country? No, I do not.

It seems to me we could have purchased insurance for everyone who didn’t have it, pay the premiums each year and it would have been less than this, and the majority would still have their insurance.

What could we do to make health care more affordable? Let us buy the insurance that meets our needs from any state.

Tort reform also is needed. Physicians practice too much defensive litigation to the extent that it impacts every aspect of health care. Simply put, they’re concerned they will be sued.

I have great concerns about what is happening in Washington. I’ve become a political activist at 64!

Even as your business has grown and thrived, do you wish you had done anything differently along the way?

Yes. I was going to franchise and, in fact, had a check for $50,000 in my hand to take to the lawyers to get started. It was the day the stock market crashed (in 1987). I canceled the appointment, which was the right decision at the time. However, I should have done the franchising when conditions were favorable again.

I try not to look back and second-guess myself. I have always been guided by a strong work ethic and commitment to doing what is right, while maintaining a good profit margin. I got these traits from my father.

We have been number one in size, visibility and profitability. I really don’t have the need to do that again.

Don’t get me wrong — I am very committed to being successful. However, being successful means to me helping others as well as guiding my company into the future.

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Fluke Networks said it’s purchased ClearSight Networks of Fremont, Calif., which makes computer networking analysis tools, for an undisclosed price.

Everett-based Fluke installs and certifies the testing, monitoring and analysis of copper, fiber and wireless networks.

“ClearSight’s network analysis solutions maximize network engineers’ ability to actively monitor critical links carrying high volumes of network traffic for performance bottlenecks, security anomalies and intermittent disruptions,” said Arif Kareem, president, Fluke Networks, in a statement.

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Home building is picking up once again in the St. Louis region.

The number of permits for new single-family homes jumped 69 percent in November from the same month last year, according to new figures from the Home Builders Association of St. Louis.

The sharp jump was due in part to better weather, and to an exceptionally slow November last year, but it was the fifth consecutive month of year-over-year gains and echoed a national increase reported last week.

The numbers add to the growing sentiment that the market for new homes has bottomed out and that the supply of new construction is coming back into line with demand, after overbuilding in recent years. That has some market-watchers predicting a home building rebound in the spring.

Still, the market has a long way to go to return to past heights. For the year through November, local permits were running 17 percent behind last year’s pace and two-thirds off their peak in 2005.

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Tiger Woods’ much-publicized marital problems have started to cost him money. But they’re probably going to hurt the pro golf tour, and its various sponsors and broadcasters, even more.

At the very least, Woods could lose significant earnings from the tour. In 2009, he was the sport’s top money winner with purses totaling $10.5 million.

Sports marketing consultant Marc Ganis said that Woods’ estimated $1 billion in lifetime earnings on and off the course mean his finances are completely secure, even if he has to pay a large divorce settlement. He said the bigger hit could be for the rest of his sport.

"The golf industry needs Woods far more today than he needs the golf industry," said Ganis.

The PGA Tour issued its own statement Friday saying it supported Woods’ decision to take a leave. "We look forward to Tiger’s return to the PGA Tour when he determines the time is right for him," the statement said.

Ty Votaw, executive vice president of the PGA Tour, said the tour couldn’t speculate on the economic impact of Woods’ absence because the length of his leave isn’t known yet.

He said final financial figures from the 2009 season are not yet available, but that they will show a decrease from the record $124 million the tour donated to charities in 2008, a close approximation of the tour’s profit. He attributed the decline to the recession.

David Carter, executive director of the Sports Business Institute at the University of Southern California, said losing Woods comes at a bad time for the PGA, given the bite the recession has put on sponsorships.

"The PGA is just now fully appreciating what the financial fallout may be," he said. "Its fallout may last for years."

Viewership for golf tournaments is likely to plunge as long as he stays off the tour. A study by rating firm Nielsen a year ago, when Woods was returning from a six-month injury rehabilitation, found that ratings for tournaments he missed in 2008 after playing them in 2007 were down an average of 47%.

Even the major tournaments are likely to take a hit in their television audience if he misses them. Nielsen found that viewership for the final day of the Masters fell 20% in the years that Woods did not win the most watched tournament.

Neal Pilson, a sports broadcasting consultant who used to run CBS Sports, said the market for ads on this year’s tournaments was soft even before Woods’ problems burst into view. "Now everyone is in a wait-and- see mode," he said.

Most of the tournaments have multi-year contract deals, but networks might need to offer additional ad time to advertisers if the ratings plunge as much as feared, said Pilson. But he said the market won’t collapse altogether, given the fact that the average golf viewer is more affluent than the fans of many other sports.

"We did sell golf before Tiger showed up. But just as there was a Michael Jordan bubble when he was winning championships with the Bulls, there has been a Tiger bubble in golf ratings," he said.

But Ganis said even after Woods returns networks might be less willing to sign new deals for the second-tier tournaments due to losses they might suffer during his absence.

But television deals are only part of the revenue stream for the PGA. It also depends heavily on sponsorship dollars cash till payday. He said Woods’ problems give sponsors one more reason to question the money they’ll spend on golf tournaments.

"They have to try to calibrate what their spending will be in the sport at a time when marketing budgets are very hard to justify," said Carter.

While some tournaments have gone out of business in the last two years, they have generally been replaced by new tournaments, including one which Woods himself hosts along with AT&T (T, Fortune 500), one of his sponsors.

Woods’ sponsors pull back

But the tour isn’t the only one that could lose sponsors. The bad publicity about his admitted infidelity could also cost Woods some of his own sponsorship deals down the road.

The first golf shoe to drop came Sunday when business consultant Accenture, which had previously made Woods the focus of its marketing campaign, announced it would no longer use him because "the company has determined that he is no longer the right representative for its advertising."

But Accenture did not respond to questions about whether it would have to continue to pay Woods under terms of his contract. Experts in the field say that while sponsors are likely to keep their Tiger Woods commercials off the air while he takes his leave from the game, most will continue to pay him the millions owed under those contracts.

The loss of sponsorship money in the future is inevitable given the damage done to the Woods image in the last couple of weeks.

"He probably won’t have to take less from the sponsors he keeps," said Ganis. "He’s made a lot of money for those guys. But he’ll probably have fewer sponsors in the future as these deals come up for renewal."

He said he thinks the deals with AT&T (T, Fortune 500), PepsiCo’s (PEP, Fortune 500) Gatorade brand and Procter & Gamble’s (PG, Fortune 500) Gillette are the deals most at risk. AT&T issued a statement over the weekend that it is "presently evaluating our ongoing relationship with him."

But Ganis said Woods is certain to keep at least a couple of his top sponsorship deals — including his biggest at Nike (NKE, Fortune 500), reported to be worth $40 million.

"There was no Nike Golf before Tiger. Nike’s not going anywhere," he said. "Neither is (video game maker) Electronic Arts."

Nike issued a statement saying that Woods and his family has "Nike’s full support," and that it looks forward to his return to playing. Nike Golf suffered a $77 million, or 11%, revenue decline in the fiscal year ended May 31, which it attributed to the recession cutting into discretionary spending, even as the company’s overall revenue rose 3%.

EA (ERTS) also issued a statement supporting Woods Friday, stating "At this time, the strategy for our Tiger Woods PGA Tour business remains unchanged."

Gillette’s statement over the weekend did not speak of its long-term plans for its deal with Woods, saying only "As Tiger takes a break from the public eye, we will support his desire for privacy by limiting his role in our marketing programs."

Gatorade did not respond to requests for comments Monday. 

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