Category Archives: Advertising

The Impact of Corporate Sports Sponsorship

A recent Seton Hall Sports poll found, as Darren Rovell of ESPN noted, that

Some of the responses to this finding were interesting, to say the least; a couple wondered if this news would “finally” lead to less corporate spending for sponsorships — a decluttering of stadiums.

I believe Rovell’s take is closer to the truth — that the number saying sports sponsorship did have an impact was too low for the money spent by sponsors.

And, importantly, it should be noted that the poll gauged what people said, not what they do.

Among marketing people, that 44% admitted that they paid attention was cause for major celebration; and perhaps, that 85% believe themselves to be unaffected by the ads was cause for even greater celebration– as advertising works best that way, just under the radar.

But what do sponsors get from these placements and affiliations?

I’ll leave that analysis to the able hands of Seton Hall, Stillman School of Business, Professor Kurt W. Rotthoff, a co-author of “Influences on Sponsorship Deals in NASCAR: Indirect Evidence from Time on Camera,” which was published in Applied Economics and looks at sponsorship value and influence. This passage below deals with sponsorship and stock price, as good a place to start as any.

Rotthoff writes:

Although the measurement of sponsorship effectiveness if notoriously difficult (for a description of the difficulty see Breuer and Rumpf 2012), the marketing literature, as well as the economics and finance literature, have all attempted to measure the overall benefit and effectiveness of corporate sponsorship dollars. In the finance literature, event studies have found a positive relation between athletic sponsorship and stock prices. Cornwell, Pruitt, and Clark (2005) find that sponsorship in the National Basketball Association (NBA), Major League Baseball (MLB), the National Hockey League (NHL), and the Professional Golfers Association (PGA) all increased the stock prices of the sponsoring firms. Pruitt, Cornwell, and Clark (2004) also find that announcement of sponsorship of a NASCAR team increases the sponsoring company’s stock price. Mahar, Paul, and Stone (2005) find that NASCAR sponsors that sell directly to end consumers have a positive relationship between winning and sponsors stock price; however, this does not hold for firms that market to businesses. Durr, Eaton, and Broker (2009) find that a portfolio of corporations that sponsor NASCAR teams consistently outperforms the risk-adjusted returns of the S&P 500.

They claim that NASCAR sponsorship sends a signal of a firm’s financial health. Other event studies have also found a relationship between athlete image and stock prices. For instance during the Tiger Woods scandal in 2009, his sports-related sponsors’ stock value decreased by over four percent and the stock prices of his top five sponsors fell by two to three percent (Knittel and Stango 2010).

Seton Hall Sports Poll Update

Seth Everett gives the latest Seton Hall SportsPoll update: MLB’s World Series vs. NFL; interesting result for sports stadium billboard sponsorship and perceived effect (1 minute, 27 seconds).

‘Deflategate’ Equals Deflated Popularity for those Involved

The aftershock of the prolonged debate over “Deflategate,” which resulted in Tom Brady’s suspension over deflated footballs being overturned in judicial proceedings, has crushed the popularity of those involved.

-Commissioner Roger Goodell, who had rebounded from a 12% favorable rating a year ago after his Ray Rice decision to 24% at the conclusion of the Super Bowl, fell back down to 14% favorable.

-Brady himself fell from 61% to 34% favorable since his winning Super Bowl performance.

-Coach Bill Belichick fell from 38% to 21% favorable in the same seven months.

Brady’s counterpart, the ever-popular Peyton Manning of Denver, remains consistently high, with a 61% favorable rating, almost double Brady’s, and right where he has been since the question was first asked in November of 2010.

“Winning a court decision is not the same as winning back the hearts of the fans,” said Gentile. “They have a long way to go.”

Fantasy Sports Games Viewed as Gambling, not Game of Skill by Wide Margin in Seton Hall Sports Poll

Waiver to Advertise and Promote in Sports Telecasts Was Based on Argument That It Is Not Gambling

This is the year that American sports fans have become accustomed to seeing advertising for fantasy sports games (involving the selection of players), while viewing live sports. While sports long embraced a “No Betting” concept with fans, the operators of such companies as DraftKings and FanDuel persuaded regulators that their games were games of skill, not gambling per se.

But the American people are not buying that argument. According to a Seton Hall Sports Poll conducted this week, 52% of Americans believe them to be a form of gambling, with only 31% believing them to be games of skill. The margin remains the same among categories of respondents that should know the difference: those that have gambled before, participated in fantasy sports and even those that paid money to participate in fantasy sports, with all categories saying it is a form of gambling by a range of 50-54%.

By a margin of 41% to 47% against, people are saying that these games should not be advertised during live sports coverage, though this is not as one-sided as the 29% to 59% that are against advertising gambling on the direct outcome of the games themselves.

“To see the influx of these fantasy games is a remarkable milestone for sports, which has always taken such a hard line on gambling,” noted Rick Gentile, director of the poll, which is sponsored by The Sharkey Institute. “No betting signs were always prominent at ballparks. And now this.”

The Seton Hall survey found that 19% of respondents have participated in a fantasy league, a daily fantasy or both, while 13% have participated in the last 12 months. This is almost a threefold increase compared to February 2006 when 5% gave an affirmative answer in the Pew Social Trends Poll.

“This topic figures to remain an important one in the sports universe for the foreseeable future,” said Gentile.