Due to the perceived benefits of NCAA Division I participation, institutional decision makers regularly encounter the appropriate extent of intercollegiate athletics commitment. Amid evidence of limited profitability, many institutions continue investment in Division I athletics. However, select institutions have redirected Division I athletic commitment from former failing courses of action. Based on escalation of commitment theory, this study investigated de-escalation of commitment within the bureaucratic educational setting of Division I athletics by implementing a collective case study of select higher learning institutions (N = 8). Participants (n = 32) included decision makers involved in the development and implementation of de-escalation initiatives. Findings revealed unique theoretical contributions related to the absence of negative feedback and importance of accurate information in redefining the magnitude of a problem. Contrary to previous de-escalation research, findings provided further contribution related to the importance of limited stakeholder consultation and a lack of engagement in impression management among decision makers.
Michael Hutchinson and Adrien Bouchet
Michael Hutchinson, Calvin Nite, and Adrien Bouchet
Amid evidence of limited financial benefit, universities in the United States continue increasing their commitment to the NCAA’s highest level of competition. Consequently, it is believed that such behavior is the result of more intangible motivations by university decision makers. Using escalation of commitment theory as a framework, the authors explored social and structural determinants of increasing commitment, specifically examining the role of organizational status, former performance, and side-bets in commitment escalation. Applying a collective case study approach, the authors examined institutions (N = 10) having increased their commitment to Division I athletics within the last 10 years. Serving as the primary data source, participants (n = 35) included decision makers involved in the implementation of escalation initiatives. QSR International’s NVivo 10 software was employed for data analysis in the application of a three-step coding process. Findings revealed unique theoretical advancement in the emergence and role of organizational status in commitment escalation. Further, decision makers identified the impact of former organizational performance in the decision to increase athletic commitment. Finally, findings revealed the increased significance of organizational side-bets serving as the sole means for sustaining course of action commitment.
Adrien Bouchet, Thomas W. Doellman, Mike Troilo, and Brian R. Walkup
Gaining exclusive sponsorship rights to international football club apparel has become increasingly competitive, resulting in larger deal values. The first objective of this study was to analyze the effect of kit sponsorship announcements on the underlying value of sponsoring firms. Utilizing event study analysis, we found that firms announcing kit sponsorships experience negative abnormal returns. This finding may not be surprising given the fierce competition for obtaining valuable, scarce marketing space and the well-known winner’s curse. The second objective was to shed further light on the value of kit sponsorship deals by conducting a novel test in which we analyzed a subset of sample observations where the kit sponsorship changed to a new sponsor. We found that firms may be willing to overpay for sponsorships to pre-empt their direct competitors from obtaining valuable, scarce marketing space. Firms losing a pre-existing sponsorship to a direct competitor experience large negative abnormal returns.
Adrien Bouchet, Thomas W. Doellman, Michael Troilo, and Brian R. Walkup
The effect of sponsorship on the stock market returns of the sponsoring companies has been previously studied, but the internationalizing aspect of sponsorship has been overlooked. We examine returns to shareholders for firms sponsoring international football matches using an event study analysis. We find that there are cumulative abnormal returns to stockholders of sponsoring firms of international matches 10 days after the match and 20 days after the match. This finding is robust across several different event-study methods. We also find this general pattern across different professional football leagues, as well as a positive effect on returns by sponsoring high-profile football clubs. We theorize that the elapsed time until the effect on the stock price is the result of building brand awareness before a shift in the price becomes evident. These findings add nuance to the literature on sponsorship and event studies, which is almost exclusively domestic in character.
Thomas W. Doellman, Brian R. Walkup, Adrien Bouchet, and Brian R. Chabowski
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.