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Marketing Letters

, Volume 20, Issue 2, pp 169–182 | Cite as

The impact of title event sponsorship announcements on shareholder wealth

  • John M. Clark
  • T. Bettina Cornwell
  • Stephen W. Pruitt
Article

Abstract

Title sponsorships are often considered the crown jewels of sports sponsorship programs. Garnering top media coverage, title sponsorships are prized for both generating brand/product awareness and building image for their sponsors. Not surprisingly, the rising cost of title sponsorships has led some managers to question their underlying value. Accordingly, this study presents an analysis of the impact of 114 title sponsorship announcements of professional tennis and golf tournaments (both men’s and women’s), auto racing (NASCAR), and college bowl games on the stock prices of sponsoring firms. Overall, the results of the study suggest that title sponsorships are generally signed at market-clearing prices. Thus, companies undertaking title sponsorships typically receive exactly what they pay for—except in the case of NASCAR races (which show evidence of increases in share prices). Splitting the sample into new and renewing sponsorships generates results which differ dramatically by sport. Finally, a cross-sectional regression finds congruence of sport and sponsor, sponsorship by high tech firms and sponsorships by large firms all correlated with perceived sponsorship success.

Keywords

Sponsorship Title Marketing Finance Sport Event study 

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Copyright information

© Springer Science+Business Media, LLC 2008

Authors and Affiliations

  • John M. Clark
    • 1
  • T. Bettina Cornwell
    • 2
  • Stephen W. Pruitt
    • 3
  1. 1.University of Southern MississippiHattiesburgUSA
  2. 2.University of Michigan—Ann ArborAnn ArborUSA
  3. 3.Henry W. Bloch School of Business and Public AdministrationUniversity of Missouri—Kansas CityKansas CityUSA

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