The Sponsorship Effect: Do Sport Sponsorship Announcements Impact the Firm Value of Sponsoring Firms?

Matthias Reiser (), Christoph Breuer and Pamela Wicker ()
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Matthias Reiser: German Sport University Cologne
Pamela Wicker: Griffith University

International Journal of Sport Finance, 2012, vol. 7, issue 3, 232-248

Abstract: This study analyzes the effect of sponsorship announcements on the firm value of sponsoring firms by investigating whether sponsorship announcements have an influence on abnormal returns on share prices. As previous research has neglected sponsorships from different regions and the comparison of sponsorships in different sports, a unique dataset of sponsorship deals between 1999 and 2010 is created (n=629). Using event study methodology the data is analyzed for all sports in general as well as for different sub-samples including soccer, motor sports, and different regions. The results of the event study provide evidence that sport sponsorship announcements positively impact stock returns, but this impact differs among sports and regions. The regression results reveal that abnormal returns are significantly higher for sponsorships on brand level, smaller firms, and deals with national reach. The findings have implications for corporate managers and sport managers as equilibrium prices for sponsorship deals have not yet been reached.

Keywords: abnormal returns; event study; sponsorship; sponsorship effectiveness (search for similar items in EconPapers)
JEL-codes: L83 (search for similar items in EconPapers)
Date: 2012
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International Journal of Sport Finance is currently edited by Arne Feddersen, Babatunde Buraimo, Joachim Prinz and Jane Ruseski

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