How does Wall Street react to global sports sponsorship announcements? An analysis of the effect on sponsoring companies' stock market prices

Carmen Abril, Joaquin Sanchez and Teresa Recio

This study aims to analyze the potential ability of sponsorship to create shareholder wealth on the basis of how the announcement of global sports sponsorships affects sponsoring companies' stock market prices.

Management Slant

  • Announcements of global official sponsorships in the 10-year period analyzed showed an overall positive effect on the stock market value of the sponsoring company.
  • This positive reaction decreased over time, perhaps because investors considered the higher fees now associated with global sports sponsorships.
  • Investors highly valued sponsorship in the company's home country and the functional synergy between the sponsor and the sponsorship.
  • The FIFA World Cup, the Olympic Games, and the UEFA European Soccer Championship were positive for a company's stock price, but expensive or niche sports, such as the America's Cup, were negative.
  • Companies should consider reevaluating...

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