Corporate stadium sponsorships, signaling theory, agency conflicts, and shareholder wealth

Clark, John M., Cornwell, T. Bettina and Pruitt, Stephen W. (2002) Corporate stadium sponsorships, signaling theory, agency conflicts, and shareholder wealth. Journal of Advertising Research, 42 6: 16-32.

Author Clark, John M.
Cornwell, T. Bettina
Pruitt, Stephen W.
Title Corporate stadium sponsorships, signaling theory, agency conflicts, and shareholder wealth
Journal name Journal of Advertising Research   Check publisher's open access policy
ISSN 0021-8499
Publication date 2002-12
Sub-type Article (original research)
Volume 42
Issue 6
Start page 16
End page 32
Total pages 17
Editor A.J. Kover
Place of publication New York, N.Y. U.S.A.
Publisher World Advertising Research Center
Collection year 2002
Language eng
Subject C1
350200 Business and Management
720401 Marketing
Abstract Contrary to the plethora of critical articles recently appearing in both the popular and business press, this carefully controlled investigation of 49 stadium- and arena-naming-rights agreement announcements provides striking evidence that such sponsorships can significantly enhance the stock prices of sponsoring companies. Indeed, the results of the study show that the average stadium sponsor's stock prices increased by 1.65 percent at the time of announcement of the programs-a result considerably in excess of the returns associated with other major marketing programs such as the signing of Olympic sponsorships and celebrity endorsers. A multiple regression analysis employing firm-specific changes in stock prices as the dependent variable and quantifiable corporate and sponsorship-related attributes as independent variables is also presented. Variables positively and significantly correlated with perceived sponsorship success include team-winning percentages, contract length, and high technology and locally based companies. Overall, the findings of the study are consistent with the novel hypothesis that, for some firms, the real value-added of a stadium sponsorship may lie in its ability to serve as an effective or honest signal of managerial confidence in the future of the company.
Keyword Business
Q-Index Code C1

Document type: Journal Article
Sub-type: Article (original research)
Collection: UQ Business School Publications
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Created: Tue, 14 Aug 2007, 17:29:39 EST