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Journal of the Academy of Marketing Science
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The Relationship Between Major-League Sports’ Official Sponsorship Announcements and the Stock Prices of Sponsoring Firms

T. Bettina Cornwell

University of Queensland, Australia, b.cornwell{at}business.uq.edu.au

Stephen W. Pruitt

University of Missouri at Kansas City, pruittst{at}umkc.edu

John M. Clark

University of Southern Mississippi, clarkj{at}cba.usm.edu

This study presents analysis of the impact of "official product" sports sponsorships with the National Football League (NFL), Major League Baseball (MLB), the National Hockey League (NHL), the National Basketball Association (NBA), and the Professional Golfers Association (PGA) on the stock prices of sponsoring firms. The primary finding of the study is that, in the main, announcements were accompanied by increases in shareholder wealth. The 53 sponsors analyzed experienced mean increases in stock valuations of about $257 million. A multiple regression analysis of firm-specific stock price changes and selected corporate and sponsorship attributes indicates that official product sponsorships with the NBA, NHL, and PGA and those with smaller market shares were associated with the largest gains in share prices. Although corporate cash flow (a proxy for agency conflicts) is statistically unrelated to shareholder approval, sponsorships by high-technology companies were associated with stronger stock price reactions than otherwise. Finally, product congruence with the sponsored sport was positively related to changes in stock prices.

Key Words: official • sponsorship • event study • stock prices • major-league sports

Journal of the Academy of Marketing Science, Vol. 33, No. 4, 401-412 (2005)
DOI: 10.1177/0092070305277385
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