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Athlete Endorsement Contracts: The Impact of Conventional Stars

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  • John Fizel
  • Chris McNeil
  • Timothy Smaby

Abstract

Despite a continuing increase in the dollar value of athlete endorsement contracts and the prominence of athlete endorsements as a marketing tool, the value of endorsement contracts has gone largely unexamined. Employing event study analysis, this paper assesses the effects of endorsement contract announcements on changes in the share price of firms. In contrast to previous studies which focus on a single megastar athlete or sporting event and find significant positive returns to the firm, this study evaluates 148 endorsement announcements for conventional athletic stars in various sports and finds that the average endorsement contract has an insignificant impact on the market value of the firm. Also, there is no support of the product–endorser match-up hypotheses but endorsements by golfers do exhibit significant abnormal returns. Copyright International Atlantic Economic Society 2008

Suggested Citation

  • John Fizel & Chris McNeil & Timothy Smaby, 2008. "Athlete Endorsement Contracts: The Impact of Conventional Stars," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 14(2), pages 247-256, May.
    • Handle: RePEc:kap:iaecre:v:14:y:2008:i:2:p:247-256:10.1007/s11294-008-9144-0
    DOI: 10.1007/s11294-008-9144-0
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    References listed on IDEAS

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    1. Corrado, Charles J., 1989. "A nonparametric test for abnormal security-price performance in event studies," Journal of Financial Economics, Elsevier, vol. 23(2), pages 385-395, August.
    2. Tripp, Carolyn & Jensen, Thomas D & Carlson, Les, 1994. "The Effects of Multiple Product Endorsements by Celebrities on Consumers' Attitudes and Intentions," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 20(4), pages 535-547, March.
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    Cited by:

    1. Junzhou Zhang & Lei Huang, 2018. "Loss or gain? The impact of Chinese local celebrity endorser scandal on the global market value of the endorsed brands," Journal of Marketing Analytics, Palgrave Macmillan, vol. 6(1), pages 27-39, March.
    2. Marco Caiffa & Vincenzo Farina & Lucrezia Fattobene, 2020. "All that glitters is not gold: CEOs' celebrity beyond media content," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 25(3), pages 444-460, July.
    3. Christopher R. Knittel & Victor Stango, 2014. "Celebrity Endorsements, Firm Value, and Reputation Risk: Evidence from the Tiger Woods Scandal," Management Science, INFORMS, vol. 60(1), pages 21-37, January.
    4. Dirk F. Gerritsen & Saskia van Rheenen, 2017. "The value of winning: endorsement returns in individual sports," Marketing Letters, Springer, vol. 28(3), pages 371-384, September.

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    More about this item

    Keywords

    Athlete endorsement; Event study analysis; Athlete contracts; M00; M21;
    All these keywords.

    JEL classification:

    • M00 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - General - - - General
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics

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