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Estimating the Value of Brand Alliances in Professional Team Sports

Author

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  • Yupin Yang

    () (Faculty of Business Administration, Simon Fraser University, Burnaby, British Columbia V5A 1S6, Canada)

  • Mengze Shi

    () (Joseph L. Rotman School of Management, University of Toronto, Toronto, Ontario M5S 3E6, Canada)

  • Avi Goldfarb

    () (Joseph L. Rotman School of Management, University of Toronto, Toronto, Ontario M5S 3E6, Canada)

Abstract

Brands often form alliances to enhance their brand equities. In this paper, we examine the alliances between professional athletes (athlete brands) and sports teams (team brands) in the National Basketball Association (NBA). Athletes and teams match to maximize the total added value created by the brand alliance. To understand this total value, we estimate a structural two-sided matching model using a maximum score method. Using data on the free-agency contracts signed in the NBA during the four-year period from 1994 to 1997, we find that both older players and players with higher performance are more likely to match with teams with more wins. However, controlling for performance, we find that brand alliances between high brand equity players (defined as receiving enough votes to be an all-star starter) and medium brand equity teams (defined by stadium and broadcast revenues) generate the highest value. This suggests that top brands are not necessarily best off matching with other top brands. We also provide suggestive evidence that the maximum salary policy implemented in 1998 influenced matches based on brand equity spillovers more than matches based on performance complementarities.

Suggested Citation

  • Yupin Yang & Mengze Shi & Avi Goldfarb, 2009. "Estimating the Value of Brand Alliances in Professional Team Sports," Marketing Science, INFORMS, vol. 28(6), pages 1095-1111, 11-12.
  • Handle: RePEc:inm:ormksc:v:28:y:2009:i:6:p:1095-1111
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    File URL: http://dx.doi.org/10.1287/mksc.1090.0513
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    References listed on IDEAS

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    Cited by:

    1. Jeremy T. Fox & David H. Hsu & Chenyu Yang, 2012. "Unobserved Heterogeneity in Matching Games with an Application to Venture Capital," NBER Working Papers 18168, National Bureau of Economic Research, Inc.
    2. Ashish Arora & Michelle Gittelman & Sarah Kaplan & John Lynch & Will Mitchell & Nicolaj Siggelkow & Denisa Mindruta & Mahka Moeen & Rajshree Agarwal, 2016. "A two-sided matching approach for partner selection and assessing complementarities in partners' attributes in inter-firm alliances," Strategic Management Journal, Wiley Blackwell, vol. 37(1), pages 206-231, January.
    3. Pavan Rao Chennamaneni & Ramarao Desiraju, 2011. "Comarketing Alliances: Should You Contract on Actions or Outcomes?," Management Science, INFORMS, vol. 57(4), pages 752-762, April.
    4. repec:bla:stratm:v:38:y:2017:i:10:p:1964-1985 is not listed on IDEAS
    5. Naidoo, Vik & Hollebeek, Linda D., 2016. "Higher education brand alliances: Investigating consumers' dual-degree purchase intentions," Journal of Business Research, Elsevier, vol. 69(8), pages 3113-3121.
    6. Andrews, Matt & Harrington, Peter, 2016. "Off Pitch: Football's Financial Integrity Weaknesses, and How to Strengthen Them," Working Paper Series 16-009, Harvard University, John F. Kennedy School of Government.
    7. Denisa Mindruta, 2013. "Value creation in university-firm research collaborations: A matching approach," Strategic Management Journal, Wiley Blackwell, vol. 34(6), pages 644-665, June.

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