Marketing investments in sport venue naming rights and the market value of the firm Online publication date:: Wed, 22-May-2019
by David M. Goldberg; Jason K. Deane; Terry R. Rakes; Loren Paul Rees
International Journal of Sport Management and Marketing (IJSMM), Vol. 19, No. 3/4, 2019
Abstract: Sport venue naming rights agreements represent monumental long-term marketing investments to increase brand awareness and improve a firm's image. These agreements require enormous expenditures, highlighting the importance of understanding their impact on the firm's market value. Questions of the wisdom of such investments today, which types of sport venues are most appropriate, and whether full corporate names or truncated ones are equally successful are of more than academic interest. Prior research has presented only a limited window into the efficacy of these deals. Results from the well-known event study methodology show improved stock market returns based on 122 announcements of naming rights deals, although it is found that market reactions have soured since 2001, when several firms investing in naming rights experienced insolvency. Investments in naming major league baseball or multi-sport venues have been particularly wise. Somewhat surprisingly, we observe that longer sport venue names are preferred to other name lengths.
Online publication date:: Wed, 22-May-2019
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