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

Author

Listed:
  • Matthias Reiser

    () (German Sport University Cologne)

  • Christoph Breuer

    () (German Sport University Cologne)

  • Pamela Wicker

    () (Griffith University)

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.

Suggested Citation

  • Matthias Reiser & Christoph Breuer & Pamela Wicker, 2012. "The Sponsorship Effect: Do Sport Sponsorship Announcements Impact the Firm Value of Sponsoring Firms?," International Journal of Sport Finance, Fitness Information Technology, vol. 7(3), pages 232-248, August.
  • Handle: RePEc:jsf:intjsf:v:7:y:2012:i:3:p:232-248
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    Cited by:

    1. Iuliia Naidenova & Petr Parshakov & Alexey Chmykhov, 2014. "Soccer Sponsor: Fan Or Businessman?," HSE Working papers WP BRP 28/FE/2014, National Research University Higher School of Economics.

    More about this item

    Keywords

    abnormal returns; event study; sponsorship; sponsorship effectiveness;

    JEL classification:

    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

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