The Worth Of Sport Event Sponsorship: An Event Study
Abstract
The authors investigate the relationship between sports-related event sponsorship and stock market valuation and identify factors that influence the financial rewards of sponsorship using World Cup and PGA tour sponsorship data. In particular, relationship between sports sponsorship with financial performance is examined in terms of sponsorship fit, event characteristics, and brand equity. Event study results show that sponsorship for World Cup and PGA is positively related to abnormal stock returns for sponsors but not every sponsor enjoys significantly positive cumulative abnormal returns. Regression analysis indicates that unexpectedly brand equity and U.S. country of origin is negatively associated with financial performance. However, U.S. sponsors with top brand value boost their abnormal stock return. Product fit enhances short-term financial performance but the significant impact of event type on financial outcome was not observed.
Introduction
Many companies make investment to sponsor the big sports events such as Olympic, World Cup and popular sports games. Although being official sponsor requires a huge amount of financial resource