The Worth Of Sport Event Sponsorship A

Journal of Management and Marketing Research

The worth of sport event sponsorship: an event study
Jin-Woo Kim
The University of Texas at Arlington
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.
Keywords: sports sponsorship, sports marketing, event study, brand equity, sponsorship fit

The worth of sport, Page 1

Journal of Management and Marketing Research
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, it is expected to create more favorable outcomes including profit increase, improved stock returns, and positive advertising effect. While sports sponsorships were 7.8% of the size of advertising expense in 1985, they were 13.9% of the size in 2006 (BMI Sport info).
Coca-Cola spent $40 million to become an official sponsor of 1996 Olympic Games and an estimated $500 million to maintain this sponsor status (Shani and Sandler, 1996). Sponsorship opportunities are increasing for companies to connect their brands

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