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The Effect of a Sports Institution’s Legal Structure on Sponsorship Income: The Case of Amateur Equestrian Sports in Germany

  • Pamela Wicker


    (Griffith University)

  • Christian Weingärtner


    (University of Zurich)

  • Christoph Breuer


    (German Sport University Cologne)

  • Helmut Dietl


    (University of Zurich)

Choosing the legal structure of a sports institution is one of the key decisions that sports managers must make. Using platform theory and property rights theory, this paper shows that the choice of legal structure influences the revenue composition of sports institutions. We hypothesized that member associations should receive higher sponsorship revenues than private firms because their legal structure offers better protection against hold-up for sponsors and also for customers/members, which in turn leads to increased attention for the sponsor. We tested this prediction using quantitative data from a nationwide online survey of equestrian sports institutions in Germany. In 2009, n=574 private firms and n=1,165 member associations completed the same questionnaire. Regression analyses were run to determine whether the legal structure has an impact on sponsorship income. The results confirmed the hypothesis that the legal structure has a significant impact on sponsorship income.

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Article provided by Fitness Information Technology in its journal International Journal of Sport Finance.

Volume (Year): 7 (2012)
Issue (Month): 4 (November)
Pages: 340-357

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Handle: RePEc:jsf:intjsf:v:7:y:2012:i:4:p:340-357
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  1. Helmut Dietl & Egon Franck & Tariq Hasan & Markus Lang, 2006. "Governance of Professional Sports Leagues - Cooperatives versus Contracts," Working Papers 0011, University of Zurich, Center for Research in Sports Administration (CRSA), revised 2007.
  2. Helmut Dietl & Tobias Duschl & Egon Franck & Markus Lang, 2009. "A Contest Model of a Professional Sports League with Two-Sided Markets," Working Papers 0114, University of Zurich, Institute for Strategy and Business Economics (ISU), revised Nov 2010.
  3. Daly, George & Moore, William J, 1981. "Externalities, Property Rights and the Allocation of Resources in Major League Baseball," Economic Inquiry, Western Economic Association International, vol. 19(1), pages 77-95, January.
  4. Helmut Dietl & Christian WeingŠrtner, 2011. "The Effect of Professional Football Clubs' Legal Structure on Sponsoring Revenue," Working Papers 0041, University of Zurich, Center for Research in Sports Administration (CRSA).
  5. Egon Franck, . "Private Firm, Public Corporation or Member`s Association – Governance Structures in European Football," Working Papers 0106, University of Zurich, Institute for Strategy and Business Economics (ISU).
  6. Helmut M. Dietl & Martin Grossmann & Markus Lang, 2011. "Competitive Balance and Revenue Sharing in Sports Leagues With Utility-Maximizing Teams," Journal of Sports Economics, , vol. 12(3), pages 284-308, June.
  7. Jean-Charles Rochet & Jean Triole, 2002. "Platform competition in two sided markets," LSE Research Online Documents on Economics 24929, London School of Economics and Political Science, LSE Library.
  8. Marc Rysman, 2009. "The Economics of Two-Sided Markets," Journal of Economic Perspectives, American Economic Association, vol. 23(3), pages 125-43, Summer.
  9. Egon Franck, 2010. "„Zombierennen“ und „Patenonkel“ - Warum deutsche Fussballklubs in der Champions League den Kürzeren ziehen," Working Papers 0036, University of Zurich, Center for Research in Sports Administration (CRSA).
  10. Helmut Dietl & Tobias Duschl, 2009. "The Organization of Professional Sports Leagues: A Comparison of European and North-American Leagues from the Perspective of Platform Organization," Working Papers 0119, University of Zurich, Institute for Strategy and Business Economics (ISU).
  11. Jean-Charles Rochet & Jean Tirole, 2014. "Platform Competition in Two-Sided Markets," CPI Journal, Competition Policy International, vol. 10.
  12. Daniel R. Marburger, 2002. "Property Rights and Unilateral Player Transfers in a Multiconference Sports League," Journal of Sports Economics, , vol. 3(2), pages 122-132, May.
  13. Helmut Dietl, 2010. "Erfolgsstrategien im Plattformwettbewerb," Working Papers 0123, University of Zurich, Institute for Strategy and Business Economics (ISU).
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