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A Dichotomy of Sport Sponsorships: Does the Nature of Competition Among Sponsors Matter?

in Journal of Sport Management
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  • 1 Saint Louis University
  • | 2 Crummer Graduate School of Business
  • | 3 The University of Tulsa
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In this paper, the authors argue that the firm value implications of sport sponsorships for sponsors may depend on the competitive environment during the bidding process for different types of sponsorships. More specifically, the authors contend that the bidding environment for professional football (soccer) kit sponsorships represents a form of common value auction, while the bidding environment for corporate logo sponsorships on teams’ shirts does not. As common value auctions are prone to winner’s curse, the firm value implications should be different for kit sponsorship announcements than for shirt sponsorship announcements. Our results suggest that shareholders indeed perceive the value derived from kit and shirt sponsorships differently, resulting in the predicted distinction in their impact on sponsors’ firm value. This study sheds light on conflicting results on firm value implications of sport sponsorships in the prior literature and provides rich areas for future research.

Doellman is with the John Cook School of Business, Saint Louis University, Davis-Shaughnessy Hall, St. Louis, MO, USA. Walkup is with the Crummer Graduate School of Business, Rollins College, Winter Park, FL, USA. Bouchet and Chabowski are with the Collins College of Business, The University of Tulsa, Helmerich Hall, Tulsa, OK, USA.

Doellman (tdoellma@slu.edu) and Walkup (bwalkup@rollins.edu) are co-lead and corresponding authors.
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