Shirt sponsorship and sponsors’ financial

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Shirt Sponsorship and Sponsors’ Financial

Performance

Master Thesis Business Studies

Faculty of Economy & Business

MSc. in Business Studies – Marketing Track Student: Ashley Hortulanus, 10295216 First supervisor: Umut Konus

Second supervisor: F.B. Situmeang

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Abstract

The importance of sports sponsorship is increasing rapidly. Due to developments in the media, the audience being exposed to sports games and sports events is increasing more and more. This development has enabled companies to advertise their brand more efficiently. For example, companies engaging in shirt sponsorship with professional football clubs can expose their brand/product for ninety minutes at a time, to millions of viewers on a weekly basis. Whereas, companies that advertise their brand/product on a billboard are likely to reach far less people in the same amount of time. The question is; is the former way of advertising more effective as well as efficient? The aim of this research is to create a deeper and sharpened understanding of the association between being a football club’s shirt sponsor and sponsors’ corporate financial performance. In addition, it aims to find out if sponsorship fit and sponsee performance play a significant role in the level of association. A sample of thirty-six football shirt sponsorship deals was used to investigate the relationships between the different variables. First

of all, the results indicate that shirt sponsorship does have a clear association with sponsors’

corporate financial performance. Secondly, based on what existing literature says about the links between sports sponsorship, marketing performance and corporate financial performance, it is highly likely that marketing performance plays a mediating role in the relationship between shirt sponsorship and corporate financial performance. However, this is not statistically proven in this research. Thirdly, it was found that the level of sponsorship fit plays a significant role in the level of association between shirt sponsorship on corporate financial performance. Finally, the results of this research indicate that the level of sponsee performance is not linked to the level of association between shirt sponsorship and corporate financial performance.

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1. Introduction

For the last thirty years, advertising and marketing have evolved increasingly and sponsorship has transformed itself from brands willing to pay vast amounts of money to be

associated with “trendy” events in the sports-, arts- and entertainment sector, to one of the most

important tools used in advertising (Belzer, 2013). The International Event Group (IEG) defines sponsorship as “cash and/or in-kind fee paid to a property (typically a sports, entertainment, non-profit event or - organization) in return for access to the exploitable commercial potential

associated with that property” (Cornwell, Weeks & Roy, 2005).

One form or sponsorship is sports sponsorship. It is a way of marketing in which companies use sports as a channel to connect with consumers (Fuse, 2013). Nowadays, sports events attract a larger audience than any other form of entertainment (Chen & Chen, 2012). Thus, engaging in sports sponsorship is likely enable companies to reach a larger group of consumers as opposed to sponsorship in other fields of entertainment. When companies engage in sports sponsorship, they expect to gain commercial benefits from the sponsorship. For example, companies might engage in a sports sponsorship deal to create a sustainable competitive advantage (Amis, Slack & Berrett, 1999). Another common reason for engaging in sport sponsorship is to create a positive corporate image or an increase in brand awareness and sales (Geng, Burton & Blakerriore, 2012). Over the years it has been found that overall; sports sponsorship can create these commercial benefits for the sponsor (Amis, Slack & Berrett, 1999; Cornwell, Pruitt & Clark, 2005; Filis & Spais, 2008; Samitas, 2008; Kim, 2010; Jensen & Hsu, 2011). Having said that, the main question to be answered by this research is; does this also apply for cases including shirt sponsorship deals between companies and professional football clubs?

This study will discuss a research on the association between shirt sponsorship deals with a professional football clubs and the sponsors’ corporate financial performance. Secondly, the research investigates if there are additional factors (sponsorship fit and sponsee performance) that play a role in the level association between shirt sponsorship and corporate financial performance. Furthermore, this research briefly discusses if this relationship is mediated by marketing performance (e.g. brand equity, brand awareness & market share). The research is

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focused on multiple shirt sponsorships deals that took place between 2000 and 2013 within the top six European football leagues as rated in 2010 by Soccer Lens (Stuart, 2010).

There are three main motivates for conducting this research. The first reason is that, many researchers agree on sponsorship being beneficial and that measuring the outcomes of sponsorship deals are the most interesting streams in this field of research (Dolphin, 1997). The second reason is that, many researchers have either focused on the association between (sports) sponsorship and brand equity and/or brand awareness or the association between (sports)

sponsorship and sponsors’ corporate financial performance by looking at their stocks. However,

none have investigated the possibility of brand equity, brand awareness, and market share playing

a mediating role in the association between (sports) sponsorship and sponsors’ corporate financial

performance neither have they investigated if the level of sponsorship fit and sponsee performance could play a role in influencing this relationship. The third and final reason is the fact that shirt sponsorship deals within the professional football world have become a million euro business. Between 2007 and 2009 football clubs in Europe's top six leagues accumulated and average of €398.000 in shirt sponsorship deals (Financial Times, 2009). Engaging in such sponsorship deals could be a large risk for a company. Prior to making a decision involving such amounts of money, companies must be convinced that the investment is going to pay off for them. Thus, it is important to know what rewards companies will receive in return for these investments and, at the end of the day, if it is worth investing these large amounts of money.

As mentioned above, in the past, researchers have investigated the effect of sports sponsorship by looking at the sponsor’s stocks (Filis & Spais, 2008; Cornwell, Pruitt & Clark, 2005). However, they have managed to leave a gap in this field of research. Firstly, these researchers have merely focused on a single sponsorship situation (Filis & Spais, 2008). Secondly, they have focused on sponsorship deals only in America and focused on product sponsorship as opposed to shirt sponsorship (Cornwell, Pruitt & Clark, 2005). Lastly, they have merely focused on sponsorship deals with sports events and not on sponsorship deals with sports clubs (Filis & Spais, 2012). This research sets out to fill in this research gap by addressing the deficiencies that have surfaced from the previous researches. Which is why this research will focus on multiple sponsorship deals (as opposed to one) in Europe (as opposed to America), and focus on deals with sports clubs (as opposed to sports events).

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This research aims to help managers gain a deeper and sharpened understanding of the

association between being a football club’s shirt sponsor and their marketing performance (e.g.

brand equity, brand awareness, market share), corporate financial performance and which external influences may play a role in the level of association. If the results show there is no positive association between shirt sponsorship and their marketing performance and/or corporate financial performance, managers might think twice before investing large amounts of money in shirt sponsorship deals and decide to invest their money in another field of sponsorship (e.g. film industry). However, if the results show that engaging in shirt sponsorship is positively associated to their marketing performance and/or corporate financial performance, the decision to invest in such a deal might be easier to underpin and make. Overall, I expect the results of this research to provide important implications for managers who are considering investing in shirt sponsorship.

The next (second) chapter of this study contains a literature review of relevant researches done in the past. The third chapter covers the methodology section, which discusses the research design including the different variables, types of data, procedures that were followed, and the analysis of the collected data. In the fourth chapter the research results are revealed. The fifth and final chapter consists of a discussion covering the research findings, managerial implications, the limitations and suggestions for future research, and it finishes with an overall conclusion.

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2. Literature review

This chapter will discuss the found literature relevant to this research. The chapter starts off with explaining what sponsorship is and how it has developed over the past. It will then discuss what sports sponsorship is, how companies can use this form of sponsorship, and what they expect to gain from engaging in sports sponsorship. Furthermore, the pros and cons of engaging in sports sponsorship and the effects it has on sponsors will be discussed. Finally the chapter ends by introducing the research hypotheses and conceptual model of this research and discussing its elements.

2.1 Sponsorship

2.1.1 The development of sponsorship

According to Moonman (1974), sponsorship was once seen as a form of philanthropy in

which a sponsor would give a ‘sponsee’ (i.e. the party being sponsored) financial resources in

return for the intangible benefits of association. In most cases a sponsorship was motivated by a sense of wanting to do something good for the community. Any commercial benefits gained were seen as incidental as opposed to intended (Chadwick, 2004). Nowadays, sponsorship is seen more as an activity to gain commercial benefits for the sponsor. Over the years sponsorship definitions have gradually started to mention the commercial benefits for the sponsor. For example, in 1979, Sports Council of the UK defined sponsorship as: "a gift or payment in return for some facility or privilege which aims to provide publicity for the donor." Nine years later in 1988, Gardner & Schuman clearly mention the commercial benefits by defining it as: "investments in causes or events to support corporate objectives or marketing objectives" (Chadwick, 2004). Companies can choose different ways to use their recourses when engaging in sponsorship. The most common way of sponsorship is offering the sponsee monetary support (Stovall, 2011). However, a sponsor could also decide to engage in sponsorship by offering the sponsee use of their products/services free of charge.

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2.1.2 Sponsorship-linked marketing

Sponsorship can be used to gain many benefits for the sponsor. For example, it can be used to generate publicity and awareness of the brand or to obtain access to a wider audience than the company's budget could normally afford (NxtConcepts, 2013). In 1995, sponsorship-linked

marketing was defined as: “the orchestration and implementation of marketing activities for the

purpose of building and communicating an association to a sponsorship” (Cornwell, Roy & Steinhard, 2001).

There are two main types of sponsorship that can be used. The first is socio-sponsorship. This type of sponsorship is based on symmetrical support in structure, but not always in implementation. The sponsor aims to meet mainly social needs and in return receive compensation rewards (Seitanidi, 2007). These compensation rewards could include enhancing company image and increasing brand awareness (Gardner & Shuman, 1987). Socio-sponsorship

can be defined as “the vehicle through which resources are justifiably allocated from the profit to

the non-profit sector, when the company’s primary intent is the attainment of social

responsibility, accompanied by compensation rewards” (Seitanidi, 1999). The second type of

sponsorship is commercial sponsorship. This type is based on a symmetrical relationship between the sponsor and the sponsee. During the relationship, the sponsor will transfer resources, aiming to promote their business, products or services and in exchange receiving compensation rewards in the form of an increased brand image and brand awareness (Seitanidi & Ryan, 2007).

2.2 Sports sponsorship

The following paragraph will discuss what sports sponsorship is, what the objectives are to engage in this type of sponsorship, the pros and cons of sports sponsorship and what kind of effects it brings with it.

2.2.1 What is sports sponsorship?

Sports sponsorship is also known as sports marketing, which is a form of commercial sponsorship. Sports sponsorship is a way of marketing in which corporations use sports as a channel to connect with consumers. Many companies and/or brands have used sports sponsorship to build positive brand awareness, support their retail and sales promotions and gain an overall

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advantage in their market (Fuse, 2013). In a sports sponsorship situation the sponsor (company) receives commercial benefits (e.g. increase in brand awareness), in exchange for financial or product/service benefits for the sponsee (e.g. league, club, team or player) (Seitanidi & Ryan, 2007). For example, the telecom company Vodafone used to sponsor the McLaren Mercedes team in Formula One. Vodafone supplied the racing team with financial recourses and in exchange the racing car was covered in stickers with Vodafone’s brand name, promoting the brand and creating brand awareness.

2.2.2 Objectives of engaging in sports sponsorship

Sports sponsorship has two key functions. It can either be used to market sports-related products and services or it can be used to market non-sport products and services through sport. The marketing of sports products and services includes, for example, marketing sports equipment or tickets to sports events. Examples of sports marketing through sports might include athletes endorsing clothing brands or corporations sponsoring large sports events like the Olympic Games or a professional football club (Smith, 2012). Marketing through sports is a concept that has become increasingly important over the last two decades due to the growth and expansion of different types of sports (Beech & Chadwick, 2007). An example of a situation in which both functions of sports sponsorship arise is the sponsorship of a football kit versus being a football shirt sponsor. Although the two sound the same, there is a difference. Adidas is the kit sponsor

for the Dutch football club AFC Ajax. By sponsoring Ajax’s football kit they are marketing their sports products (sports clothing). Aegon is the sponsor of AFC Ajax’s football shirts. Their brand

name is printed on the front of the football club’s shirts. Aegon is an insurance company that is not linked to the sport and by sponsoring the club in this way they are marketing a non-sports product (insurance) through sport (football).

Over the years many researchers have attempted to identify the companies' objectives to engage in sports sponsorship. The sponsors were given several possible objectives and asked to rank the ones that matched their reason for involvement in sports sponsorship. Enhancing brand image and increasing goodwill were found to be the most important objectives. However, it was also found that marketing and communication objectives (e.g. brand equity, brand awareness) were mainly adopted by large companies, whereas smaller companies were mainly motivated by being able to support and establish their relationship with the community (Cornwell & Maignan,

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1998). Sports sponsorship should also be considered as an important resource for creating a sustainable competitive advantage for a company (Amis, Slack & Berrett, 1999). According to the Resource Based View (RBV), for resources to create a sustainable competitive advantage, they must be valuable, rare, inimitable, and non-substitutable (Barney, 1991). It has been found that the main objective for (large) companies’ to engage in sports sponsorship is to obtain favourable commercial advantages, including a positive corporate image, and an increase in corporate awareness and sales (Geng, Burton & Blakerriore, 2012). Nowadays, sports events attract more viewers and participants than any other form of entertainment. For example, Formula One auto racing hosts seventeen races each year that are broadcast live in nearly sixty countries, creating a total audience of over one billion people (Chen & Chen, 2012). Advertising during an event like this enables companies to reach an extremely large amount of people in a short period of time.

2.2.4 Pros and cons of sports sponsorship for a sponsor

There are several pros and cons linked to being a sponsor. Hereunder are a few examples of the pros and cons that may occur.

Pros

Enhancing brand reputation. Linking a brand to a highly valued athlete, sports club or

sports event that already has a strong positive reputation could enhance the brands reputation simply by association (Straight Marketing, 2013). If a trustworthy athlete who is committed to promoting environmental causes were to endorse a product that claims to be environmentally friendly, it is likely that credibility perceptions of this product/brand will be affected in a positive way (Spry, Pappu & Cornwell, 2011).

Enhancing brand awareness. When sponsoring an athlete, sports club or sports event your

brand name will be promoted by the sponsee (e.g. football shirt sponsorship), which means gaining visibility leading towards an increase in brand awareness (Straight Marketing, 2013). Another example is when a sports event is named after the brand, for example, the London

Marathon has been named after their main sponsor Virgin Money creating the “Virgin London Marathon” (The Guardian, 2008) and the British Premiere league is named after their main sponsor Barclays bank creating the “Barclays Premiere League” (BBC News, 2012).

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Increasing sales. An increase in the sponsor’s sales could occur directly or indirectly. A

direct increase in sales could be stimulated when a sponsor decides to sell its product(s) at the sports event they are sponsoring. An indirect increase in sales could occur due to enhanced in brand awareness and the creation of a positive brand reputation (Straight Marketing, 2013).

Cost effective. Being a sports sponsor could be more cost effective than mainstream

advertising (Straight Marketing, 2013). Large sports events like the Olympic Games or the Super Bowl often have a large audience, so when you sponsor a major sports event like this, you will reach a lot more people in a small amount of time compared to, for example, hanging up advertisement posters through a city/country. It could be compared to running an advertising campaign in 120 countries at once (Robinson, 2013).

Differentiating themselves from competitors. Sports sponsorship can be an effective way

to differentiate yourself from your competitors (Amis, Slack & Berrett, 1999). A shirt sponsor of a professional football team could demand the exclusive rights to have only their brand name printed on the football shirts. For example, there is only one brand name printed on the Real Madrid football shirts and that is Bwin. Thus, no other brand in the world is able to sponsor Real

Madrid’s shirts whilst Bwin is their sponsor. Claiming this kind of exclusivity might be seen as

taking the opportunity before a competitor does so and even if this is the only objective a sponsor achieves with the sponsorship, they will at least have prevented any competitors from taking up the opportunity (Masterman, 2007).

Cons

Negative image association. A sponsorship deal could send out negative messages and

create a negative image for the brand if the sponsee is caught up in a scandal (Straight Marketing, 2013). For example, the famous disabled runner Oscar Pistorius (Blade Runner) is currently on trial for murdering his girlfriend. His main sponsor Nike did not want to be associated with this event so they decided to suspend the contract they had with him (BBC News, 2013). Another example is Louis Suarez. This professional footballer recently lost his sponsor 888poker, an online gambling firm who terminated their sponsorship deal with Suarez due to him biting one of his Italian opponents during the 2014 World Cup in Brasil (BBC Sport, 2014).

Lack of control. Being a sponsor is a risky business (Amis, Slack & Berrett, 1999). As a

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predict certain events (e.g. team performance, scandals) that may play a role in the effect the sponsorship will have on your company (Straight Marketing, 2013). In 2010, Tiger Woods became wrapped up in a sex scandal as he was found to of cheated on his wife multiple times. Due to this scandal some of his sponsors like Gatorade, AT&T and Accenture decided to end their contracts with the athlete (BBC News, 2010). He lost a total amount of twenty-two million dollars worth of endorsements (Business Insider, 2010).

Ambush marketing. This type of marketing occurs when another company (usually a competitor) attempts to take the target group’s attention away from the sponsor by promoting

their own brand (Straight Marketing, 2013). An example of such an event took place during the 2010 FIFA World Cup in South Africa. The American beer brand Budweiser was the main beer sponsor for the event, but the Dutch beer brand Bavaria decided to ambush them by sending 36

‘Bavaria Meisjes’ (i.e. girls dressed in orange Bavaria dresses) to the stadium to catch the

attention of the audience in the stadium as well as all the viewers at home. Even through the girls got removed from the stadium and arrested for unlawful commercial activities, it resulted in a lot of publicity for Bavaria (BBC News, 2010).

2.2.5 Potential effects of sports sponsorship on the sponsors

As mentioned before, and similar to general advertising, companies use sports sponsorship as a resource to enhance brand awareness, increase sales and/or to improve the image of the brand/company (Cornwell, 2001). Moreover, enhancing brand awareness and the brand image are known to be the most important objectives for companies to engage in sponsorship (Amis, Slack & Berrett, 1999). Engaging in sports sponsorship is likely to have an effect on your company; this could be a positive effect as well as a negative effect. However, when agreeing on a sports sponsorship deal, as a company, you can never be certain of how the sponsored party is going to perform and how the deal will be perceived by the ones whom the sponsor is trying to appeal to (Amis, Slack & Berrett, 1999), this makes sports sponsorship a risky business.

The following example demonstrates how celebrity endorsement can have a positive effect on a company. Celebrity endorsement means that a brand becomes associated with a celebrity. Having highly valued celebrities use certain brands is expected to create a positive attitude towards those brands (Keller, 1993). Consumers are likely to think, if that celebrity uses it, it must be good so I will buy it too. According to some researchers, using celebrities in

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marketing campaigns makes the advertisements more trustworthy and creates a positive image for the brand. It also creates more brand awareness and helps give the brand its own personality (Amis, Slack & Berrett, 1999). Agrawal and Kamakura (1995) found that more than fifty-five percent of celebrity endorsements include sports celebrities. This causes little doubt about the fact that the effect of sponsorship deals with sports teams, clubs and leagues are likely to show similar positive effects (Amis, Slack & Berrett, 1999). However, if the sponsorship is built in a way that it does not provide a coherent image, the success of the sponsorship is likely to be a short-term one (Amis, Slack & Berrett, 1999). Thus, if the sponsorship is not integrated within the rest of the

sponsor’s marketing mix the benefits are likely to be temporarily only.

During an event-study measuring the effects on shareholders’ wealth after the announcements of celebrity endorsement deals, it was found that these kinds of deals have a positive effect on the stock returns. This suggests that overall, using celebrity endorsement is seen as an economically viable investment (Cornwell, 2001). However, the following example demonstrates how sports sponsorship deals can also have a negative effect on a company. When investigating the sponsorship deals for the 1996 Atlanta summer Olympic Games, negative stock price effects were found. This suggests that, overall, being a sponsor for the Olympic Games, or another major sports event, may not enhance the value of your company. In this case the reason for this, is thought to be linked to occurrence of wrong intentions behind the sponsorship deal, as the sponsorships were agreed upon purely based on the self-interest of the companies’ top management (Cornwell, 2001) and the fact that the event was poorly organised (Amis, Slack & Berrett, 1999). Another example of an unsuccessful sports sponsorship deal is one of a bank sponsoring a Canadian multi-sport organisation. The motivation behind the deal was purely based

on the fact that the chairman of the bank wanted it. He said it was “an investment to the community”, but then he made no attempt to link the bank to the sponsored party (Amis, Slack &

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Effects Researcher(s) Positive effects

Enhance brand awareness Cornwell (2001), Amis, Slack & Berrett (1999)

Increase in sales Cornwell (2001)

Improve brand/company image Cornwell (2001), Amis, Slack & Berrett (1999)

Creating a positive attitude towards the brand Keller (1993)

Creating a personality for the brand Amis, Slack & Berrett (1999)

Positive effect on stock returns Cornwell (2001)

Negative effects

Negative effect on stock returns Cornwell (2001), Amis, Slack & Berrett (1999)

Table 1: Potential effects

2.2.6 The effects of sports sponsorship on marketing performance

In this research the marketing performance consists of brand equity, brand awareness, and market share. The following paragraph explains what these factors are and the effect that sports sponsorship has on them.

Effect on brand equity

Brand equity is an intangible asset known as the combination of brand image and brand reputation (Amis, Slack & Berrett, 1999). Aaker (1991) and Keller (1993) define brand equity as:

“the value to a customer of a perceived product above that which would result for an otherwise identical product without the brand's name” (Amis, Slack & Berrett, 1999). According to

Bharadwaj et al. (1993), having strong brand equity has several benefits for a company. Firstly, it

can help differentiate a company’s products from those of competitors. Secondly, it can serve as a

quality measure creating positive images about the company/brand/products in de minds of consumers. Finally, it can help prevent a decrease in market share during competitive times, like a price war, and also by giving companies time to respond to environmental threats (Amis, Slack & Berrett, 1999). Several studies have shown that sponsorship deals have contributed towards enhancing a company's brand equity (Jensen & Hsu, 2011). According to McDonald (1991), if a sponsorship program is thought through and well-designed, it can contribute to enhancing the

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perception of the company and its products/services and thus will therefore contribute to enhancing the brand equity. Furthermore, it has been established that Sports sponsorship plays a significant role in forming brand equity perceived by managers. More than twenty-five percent of the variance in the brand equity change, due to sponsoring, could be explained by the level of sports sponsorship (Henseler et al., 2007).

Effect on brand awareness

Brand awareness is also an intangible asset. Some researchers see it as a part of brand equity (Cornwell, Roy & Steinhard, 2001), others see it as a part of brand knowledge (Keller, 1993). Brand awareness can be defined as consumers' ability to identify the same brand under different circumstances (Keller, 1993) in other words it refers to the strength of a brand’s presence in the

consumer’s mind (Henseler et al. 2007). Being aware of a brand means learning about the brand’s

personality and being able to differentiate the brand from its competitors. For consumers to do so, they must understand what the brand has to offer them (Cornwell, Roy & Steinhard, 2001). Sponsorship can be used to segment a market based on different interests or lifestyles of the target group and in doing so it can increase awareness by linking the company/brand to a highly valued event or organization (Kim, 2010).

Market share

The market share gives a general idea of the size of a company compared to its competitors and

can be defined as “the percentage of an industry or market's total sales that is earned by a

particular company over a specified time period.” One can calculate market share by taking a

company’s sales volume over a certain period of time and dividing that by the total sales of the

industry that the company is active in (Investopedia, 2014).

2.2.7 The effects of sports sponsorship on corporate financial performance

The financial performance is a reflection of a company’s success in monetary terms (Business Dictionary, 2014). It can be used to a measure a company’s financial health and to

compare the company with others (e.g. competitors). There are multiple ways to measure a

company’s financial performance. For example, one could look at the sales, profits and changes

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performance is found to be driven by the amount of existing fit between the sponsor and the sponsee.

Effects on sales & profits

As mentioned in section 2.2.4, according to Straight Marketing (2013), sports sponsorship could have a direct as well as an indirect effect on a sponsor’s sales. Provided that the company costs stay the same or decrease, an increase in sales will lead to a higher profit. An example found by Miles (2001) indicates that the benefits of sponsorship in the football industry could increase company sales (Chadwick, 2004). Furthermore, it was found that by participating as a sponsor of the 2004 Olympic Games in Athens, small companies increased their turnover, sales and profits (Samitas, 2008).

Effects on stock returns

Stocks are tangible assets that are relatively easy to measure. They are transparent and it is common for their value to be reflected in the balance sheet valuation of a company (Fahy, Farelly & Quester, 2004). Furthermore, stock prices are comparable across companies, as well as countries (Calomiris, Love & Martínez Pería, 2012) and according to Jensen & Hsu (2011), stock

price appreciation can be used as a key indicator for measuring a company’s performance.

Corporations can use the sale of their stocks as a way to raise capital for the growth and expansion of the company. However, buying and selling stocks can be a risky business, for example, it is impossible to predict exactly how well a company is going to perform. In addition to that there are many other risks linked to investing in stocks (e.g. rating risk, obsolescence risk, detection risk, etc.) (Investopedia, 2011). When you purchase a stock, you automatically become an owner of the company. The more stocks one purchases the stronger ones ownership becomes (The Nest, 2014). A firm’s stock returns consist of two types of returns. The first is the expected returns and the second is the residual returns. The latter are dependent on firm-specific news (Calomiris, Love & Martínez Pería, 2012). A sponsorship deal with a sports club is an example of firm-specific news that could have an effect on the company’s stock returns. If this news is received positively, the stock returns are likely to increase, but if the news is received negatively, the stock returns are likely to decrease. Changes in stock prices can offer a bias-free measure of the success of a sports sponsorship (Cornwell, 2001).

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In the past it has been proven that being a sponsor can have an effect on the stock returns of a company. In 2008, Filis & Spais conducted a research to test who would benefit most from a sports sponsorship deal, the sponsor (FIAT) or the sponsored organization (Juventus Football Club). In this study they looked at the stock market reaction to official football club sponsorship announcements using the event-study method. Their intention was to test what influence an

announcement of an official football club sponsorship program would have on stockholders’

behaviour within both the sponsor (corporate organization) and the sponsee (football club). The

results showed that the announcement had a greater impact on Juventus’s stock than on Fiat’s. More specifically, the impact on Juventus’s stock seemed to be negative, whereas the impact on Fiat’s stock seemed to be positive (Filis & Spais, 2008).

In 2005, Cornwell studied the impact of being an official product sponsor for the National Football League (NFL), National Hockey League (NHL), Major League Baseball (MLB), National Basketball Association (NBA) and the Professional Golfers Association (PGA). Being an official product sponsor means that you have an agreement with the party, that you are sponsoring, that you will be the only brand to offer that party a particular product. For example,

in 2003 Kellogg’s was the official breakfast cereal sponsor for the NHL. The study was

conducted by investigating the change in stock returns on and around the dates of the sponsorship deal announcements. The results revealed that overall, stock market investors perceived official sponsorships in a positive way (Cornwell, Pruitt & Clark, 2005).

Furthermore, not only did small companies sponsoring the 2004 Olympic Games benefited from an increase in turnover, sales and profits, the sponsorship deals also had a larger positive impact on their stock returns compared to larger companies sponsoring the event (Samitas. 2008).

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2.3 The association with marketing performance and corporate financial

performance

This study focuses on sports sponsorship. To be more specific, it focuses on marketing through sport. This type of sports sponsorship is investigated by focusing on the shirt sponsorship of football clubs within the top six European football leagues. The research question is as follows:

Is there a positive association between shirt sponsorship and sponsors’ performance – and what are additional factors that play a role in sponsors’ performance?

According to Thwaites (1995), Miles (2001) and Mosson (2001), the most important objectives for engaging in a shirt sponsorship deal are; increase in brand awareness and sales, and an improved relationship with local communities and other businesses (Chadwick, 2004). It has been found that brand awareness and engagement with local markets are a result of shirt sponsorship deals. However, direct financial results or increased sales are not directly linked to the shirt sponsorship deals (Chadwick, 2004). The latter is something that is challenged during this research; the association between shirt sponsorship and financial performance is measured by looking at the sponsors’ stock prices. The reason for this is that stock prices are transparent assets and they are comparable across the world (Fahy, Farelly & Quester, 2004; Calomiris, Love & Martínez Pería, 2012; Jensen & Hsu 2011). As this research focuses on six different countries, stock prices are a representative measurement. If this research were to focus on the association between shirt sponsorship and brand equity, it would be difficult to compare the different results from different countries, as brand equity is an intangible asset based on peoples’ opinion. When it

comes to peoples’ opinion (subjective) in different countries and different cultures, these opinions

could be formed in different ways and based on different factors. Meaning this measure would not be representative.

Based on all the found literature about corporate financial performance and marketing performance, it is expected that being the shirt sponsor of a football club is likely to be positively

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2.4 The mediating role of marketing performance

Does marketing performance play a mediating role in the association between shirt sponsorship and corporate financial performance? In the previous literature it has become apparent that sports sponsorship most definitely has an effect on a company’s brand equity and brand awareness (McDonald, 1991; Henseler et al., 2007; Straight Marketing, 2013; Cornwell, 2001; Kim, 2010; Chadwick, 2004; Geng, Burton & Blakerriore, 2012) and, when looking at the stock market sports sponsorship can also has have an effect on corporate financial performance (Filis & Spais, 2008; Filis & Spais, 2012 Chadwick, 2004; Samitas, 2008; Straight Marketing, 2013; Cornwell, Pruitt & Clark, 2005). The question is; does this sponsorship affect follow on to affect the corporate financial performance? According to Kim (2010), it does. He found that brand equity plays an important role when looking at the association between sports sponsorship

and the sponsor’s financial performance. Thus, given the existing literature on this subject it is

likely that marketing performance plays a mediating role in the relationship between shirt sponsorship and corporate financial performance. However, this research will not be empirically analysing this occurrence due to the data limitations.

2.5 Factors impacting sports sponsorship

As mentioned above, this study expects to find an overall positive association between

shirt sponsorship and the sponsor’s financial performance. However, there are two additional

factors that could affect the level of this effect. These influences are discussed hereunder.

2.5.1 Sponsorship fit

Fit can be defined as a strategic match between sponsor and sponsee (Becker-Olsen & Hill, 2006). Fit between a sponsor and a sponsee can occur on different levels. Two examples are geographical fit and product fit.

Geographical fit. This type of fit can be defined as a situation where the geographical location

(e.g. country/region/city) that is most strongly associated with a sponsor matches the

geographical location most strongly associated with the sponsee (Carrillat, d’Astous & Davoine,

2013). For example, Umbro (a British sportswear brand) used to sponsor the English national football team.

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Product fit. This type of fit can occur on three different levels. Firstly, there are strongly linked

products. This type of fit occurs when the actual product or its performance has a direct link to the sponsee and is demonstrated at the sponsored event (Cornwell, Pruitt & Van Ness, 2001). For example, Rolex the worlds leading Swiss watchmaker has been Wimbledon’s official timekeeper since 1978. The link is clear; Rolex is a luxury watch brand sponsoring the timekeeping at Wimbledon, which is considered to be the most prestigious tennis tournament. Secondly, the product can be linked but not strongly. This is the case when the product shows a certain link to the event (Cornwell, Pruitt & Van Ness, 2001), but the link is not clear instantly. For example, the product could be linked to the image of the event. So, if Gillette Fusion Power (brand for

men’s razors) were to sponsor a men’s speed skating team, the link would be that the skating team exists of men who need to stay ‘extra’ smooth to achieve the quickest times on the ice rink.

The final form of product fit is non-linked. When this is the case, if the product is linked, it will be in such a way that the linkage is not clear at all (Cornwell, Pruitt & Van Ness, 2001). For example, Ajax Amsterdam is sponsored by Mercedes. There does not seem to be a link between the two until it becomes clear that Mercedes provides all Ajax players with a Mercedes. According to Cornwell, Pruitt & Clark (2005), product fit was positively related to changes in the stocks, the more direct the link was, the stronger the effect was on the stock returns and overall, the fit between sponsor and sponsee is a positive indicator of perceived sponsorship success. However, according to Kim (2010), product fit only enhances short-term financial performance but the significant impact of event type on financial outcome was not observed.

Many researchers have found that the fit between sponsor and sponsee has a positive effect on the sponsorship outcomes. For example, Grohs and Reisinger (2005) found that the fit between sponsor and sponsee is the main driver of the strength of image transfer toward consumers (Chavanat, Martinent & Ferrand, 2009). According to Amis, Slack & Berrett, (1999), the more that the sponsor and sponsee become linked in the eyes of consumers, the more the sponsor is likely to benefit from the sponsorship. Furthermore, Quarterman and Flynn (2006) found that the effects of the perceived image fit between the sponsor and the sponsee were

significantly related to consumers’ intention purchase. Whereas Becker-Olsen and Simmons

(2002) found that in the case of a sponsorship with low fit, consumers generated less favourable thoughts and attitudes towards the sponsorship deal, did not have a clear vision on the positioning

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of the sponsor and showed less favourable behaviour to the sponsorship (Chavanat, Martinent & Ferrand, 2009).

Interestingly, it was found that while consumer perceptions show that fit has a positive effect on the relationship between sports sponsorship and brand equity, managers seem to believe the opposite. Apparently from their perspective, if the level of sponsorship is high enough, fit is not so important (Henseler et al., 2007).

Based on the found literature about sponsorship fit, it is expected that when the fit between sponsor and sponsee is high, the shirt sponsorship is likely to have a more positive association with the corporate financial performance of the sponsor. Thus, the first hypothesis is as follows:

H1: The presence of sponsorship fit is related to an increase in corporate financial performance

2.5.2 Sponsee performance

In this research sponsee performance stands for the success of the sponsee. When investigating if the performance of the sponsee (e.g. football club/team) has an effect on stock prices, the findings are varied. Hanke and Kirchler (2009) investigated the effect of football

teams’ performance on sponsors’ stocks and found that there was a significant relationship

between the two. However, they merely focussed on the sports brands like Nike, Adidas and Puma sponsoring the kits, and not on the corporations sponsoring the clubs/teams. Astika (2010) found that the results of the Dutch national football team did not impact the Dutch stock exchange. Whereas, Ashton, Gerrard & Hudson (2003; 2011) found that, the football results of the English national football team did have a significant relationship with the London stock exchange. Their results showed that good (bad) performances were followed by good (bad) market returns. Furthermore, Edmans, Garcia & Norli (2007) documented a significant negative reaction on the stock market after losses by national soccer teams.

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Partly based on the literature found about sponsee performance, it is expected that shirt sponsorship is likely to have a more positive association with corporate financial performance when the sponsee is performing well. Thus, second and third hypothesis are as follows:

H2: When sponsee performance prior to the sponsorship is high, sponsors’ corporate financial

performance is more likely to increase

H3: When sponsee performance during the first season of the sponsorship is high, sponsors’

corporate financial performance is more likely to increase

2.6 Conceptual model

This paragraph discusses the conceptual model (see figure 1). The conceptual model exists out of the following five variables: an independent variable; Club Shirt Sponsorship, a dependent variable; Corporate Financial Performance, a mediator; Marketing Performance and two moderators; Sponsorship Fit & Sponsee Performance. Sponsee Performance is divided into two types of performance namely, the sponsee performance prior to the sponsorship and the sponsee performance during the first football season of the sponsorship. The green variables are investigated in his study. The red variable is not investigated in this study.

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2.6.1 Club Shirt Sponsorship

In 2002 IEG indicated that between 50% and 60% of sponsorship investments are focused on the sponsorship of sport. According to Mintel, the estimated total value of sponsorships in the United Kingdom in 2002 was close to £849 million. Approximately 50% of this amount was spent on sport sponsorships with large media coverage (e.g. football). Furthermore, Mintel (2002) and Keynote (2003) found that in the United Kingdom, 30% - 40% of the total sponsorship value is spent on football. According to Keynote (2003), the reason behind this is that deals with football clubs enable companies to have their brand names printed across the football shirts. In this same period, the ten highest valued sports sponsorship deals were linked to football.

Two examples are the shirt sponsorship deals between Chelsea and Emirates Airlines, and Manchester United and Vodafone. Thus, within the sports sector, football has been a major recipient of sponsorship funding. In 2001, 209 out of 589 sponsorship deals were football-linked deals (Chadwick, 2004). So, what exactly is a shirt sponsorship deal and what do such deals entail? According to Chadwick (2004), a typical shirt sponsorship deal occurs when an organisation (usually corporate) gains legal rights to be associated with a sports club for a certain period of time in exchange for financial resources. The deal allows the sponsor to place their company/brand name on the shirts of the sponsored club. Furthermore, it has been found that approaches concerning the shirt sponsorship deals are more likely to be initiated by the sponsee as opposed to the sponsor (Chadwick, 2004).

2.6.2 Corporate Financial Performance

As mentioned in section 2.6.2 the corporate financial performance reflects the financial success of a company, which can be used to compare a company to its competitors. In this research the corporate financial performance is measured based on the changes in stock prices. The measurement is done over two different periods; one whole calendar year and one football

season. In this research the change in stock price is measured by taking the companies’ stock price from one day before the football season starts and comparing it to the companies’ stock

price either one year later or one day after the football season ends, this depends on the period used for the analysis.

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2.6.3 Marketing Performance

According to Baron & Kenny (1986), “a mediator can explain how external physical

events take on internal psychological significance.” A variable is recognised as a mediator when all of the following events occur: changes in the independent variable cause for changes in the dependent variable (path A), changes in the mediator cause for changes in the dependent variable (path B), and the relationship between the independent variable and the dependent variable, that was previously significant, is no longer significant as a result of path A and path B being controlled. This research will briefly discuss if marketing performance plays a mediating role in the relationship between shirt sponsorship and corporate financial performance. As mentioned in paragraph 2.4 the link between sport sponsorship and marketing performance has been proven to exist, as for the link between sports sponsorship and corporate financial performance.

2.6.4 Sponsorship fit

Sponsorship fit is one of the moderators in this conceptual model. A moderator can be a qualitative (e.g. sex, race, class) or quantitative (level of reward) variable. It has an effect on the direction and/or strength of the relationship between an independent variable and dependent variable (Baron & Kenny, 1986). As mentioned in section 2.5.1, sponsorship fit is defined as the strategic match between sponsor and sponsee. It can occur on different levels of which the most well known are geographical fit and product fit. The latter can be divided into three levels namely, strongly linked, linked and non-linked.

2.6.5 Sponsee performance

The second moderator in this research is sponsee performance. In this research the sponsee performance entails the success of the football club and exists of two types. The first type of sponsee performance is the performance of the football club prior to the sponsorship deal. This type of sponsee performance can be measured by taking into account the number of recent match wins. For example, if the club wins the majority of their matches, this is seen as a good performance, but if the majority of the football matches are lost, their performance is seen as poor

one. Other ways of measuring this type of sponsees’ performance is by looking at their position

in the national league at the time of the sponsorship announcement. For example, if they are in the top of the league, this is seen as a good performance, but if they are at the bottom of the

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league, this is seen as a poor performance. The second type of sponsee performance measured in this research is the performance of the football club during the first football season of the sponsorship. This type of sponsee performance can be measured by looking at their league position at the end of the season, if they won the league title and/or if they qualified themselves to play European football.

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3. Method

The following chapter covers the methodology of this research. The first paragraph will discuss what the research design is. The second paragraph covers which data is used for this research. The third paragraph will explain how the different types of data are collected. The fourth and final paragraph of this chapter will explain how the data is analysed using SPSS.

3.1 Research design

This study consists of an exploratory research (Saunders, 2009, p. 139) investigating the association between shirt sponsorship and corporate financial performance and a possible mediation by marketing performance and moderation by sponsorship fit and sponsees’ performance. To test the proposed hypotheses, a multi-method quantitative study design (Saunders, 2009, p. 152) is used. The independent variable is shirt sponsorship, the dependent variable is corporate financial performance, the proposed mediator is marketing performance, and the proposed moderators are sponsorship fit and sponsees' performance. The expectations for this research are as follows:

 Shirt sponsorship is expected to be associated with the sponsors' corporate financial performance

 Marketing performance is expected to play a role in the level of association between shirt sponsorship and corporate financial performance

 Sponsorship fit is expected to play a role in the level of association between shirt sponsorship and corporate financial performance

3.2 Sample

The sample of this research exists of shirt sponsorship deals within the English, Spanish, Italian, Dutch, French and German national football leagues that were announced between 2000 and 2013. The announcement data have been collected by means of various Internet websites. The majority of shirt sponsorship announcements were found on sports news websites like sportspromedia.com and several were found on the football clubs’ own websites. There are

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several points of criteria that the sponsorship deals had to meet to be appropriate for this research. Firstly the sponsorship deal had to be a shirt sponsorship deal. Secondly, the sponsorship deal had to have taken place between the year 2000 and 2013. Lastly, the sponsee had to be a club within the English, German, Spanish, Dutch, Italian or French national football league. These leagues were chosen as they have been ranked as the top six best European leagues based on criteria such as finances, attendance figures, amount of goals scored, managers, star players, stadiums and competitiveness (Benlin, 2013). After screening the collected deals for the above-mentioned criteria, thirty-six sponsorship deal announcements qualified to be used in the research sample.

3.3 Measures

All the data used for the study, is secondary data. This choice is based on the fact that in this case using secondary data is less time consuming than, for example, collecting data via a survey, as the data is already available. Furthermore, according to Stewart and Kamins (1993), secondary data is likely to be of higher quality than collecting the data yourself (Saunders, 2009, p. 268). The collected secondary data in this study consists of daily stock prices, performance data of the football teams, and geographical and product information about the sponsor.

Sponsorship period. To measure the association between shirt sponsorship and corporate

financial performance, this research will measure stock prices over two different periods namely, the first calendar year of the sponsorship and the first football season of the sponsorship. In both cases the period starts on the trading day before the football season starts. However, the calendar year runs for twelve months and the football season runs for nine months.

Stock prices. The change in stock prices is used to indicate the association between shirt

sponsorship and corporate financial performance. Two scenarios could occur; either the sponsors’ stock price changes in a positive way (stock price increases) or the sponsors’ stock price changes in a negative way (stock price decreased). The data to measure the change in stock prices exists of the stock prices for the trading day before the season started and the stock prices for the trading day after the first football season ends and one calendar year later.

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Sponsorship fit. The data concerning the sponsorship fit exists of geographical and product

information. The data for sponsorship fit is obtained by answering the following questions: Do both sponsor and sponsee originate from the same country? Does the business that the sponsor is in match the game of football? Section 3.4.3 will elaborate on how this is measured.

Sponsee performance. The football teams’ performance data exists of two types of performance.

The first being the performance prior to the sponsorship and the second being the performance during the first season of sponsorship. The former is measured by looking at the sponsees’ national league position at the time of the announcement, their performance over the last five matches prior to the announcement, and whether they were named league champion the year prior to the announcement. The latter is measured by looking at the sponsees’ position in the national league at the end of the first football season, whether they are named champion of that season, the percentage of matches they won during that season, whether they are playing European football the next season and if they managed to win a league cup that season. Section 3.4.4 will elaborate on how this is measured.

Measures

Sponsorship period Calendar year: twelve months, starting on day before start of season Football season: nine months, starting on day before start of season

Stock prices Used to measure the change (increase/decrease) due to a shirt sponsorship deal by comparing the stock price on the day before the start of the season and the stock price on the day after the end of season/one calendar year later.

Sponsorship fit Geographical fit: sponsor and sponsee originate from same country Product fit: link between product/brand and sponsee

Sponsee performance Performance prior to sponsorship: How was the sponsee performing before the sponsorship took place?

Performance during first season: How was the sponsee performing during the first football season of sponsorship?

Table 2: Summary of measures

3.4 Procedure

The following paragraph will explain the procedures used to measure corporate financial performance, sponsorship fit and sponsee performance.

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3.4.1 Measuring association with corporate financial performance

The association between shirt sponsorship and corporate finance performance will be measured using data collected over the first calendar year of the sponsorship as well the first football season of the sponsorship, both periods starting one trading day prior to the start of the football season. Monitoring the change in stock price that is caused by certain events, shows the market's perception of the financial impact that event has (McWilliams & Siegel, 1997). Thus, as

mentioned before, in this research the stockholders’ reactions to the sponsorship deal are

measured by looking at the changes in stock price due to the shirt sponsorship deal. The stock prices are collected using DataStream, which is a global financial and macroeconomic database covering stock market indices for 175 countries and sixty markets (European University Institute, 2014). For example, AON decides to sponsor Manchester United. The first football season of this sponsorship is the season of 06/07 and it starts on the 19th of August 2006. When looking at the first calendar year of the sponsorship, the change in stock price will be measured by looking at

the difference between AON’s stock price on the 18thof August 2006 and AON’s stock price on

18th of August 2007. When looking at the first football season of the sponsorship, the change in

stock price will be measured by looking at the difference between AON’s stock price on the 18th

of August 2006 and AON’s stock price on 23rd_{of May 2011, as the football season ends on the}

22ndof May 2011.

3.4.2 Measuring marketing performance

There exist various ways of measuring the association between marketing performance and shirt sponsorship. The first would be to use a database that collects companies’ change in brand awareness, brand equity and market share due to certain events taking place. Unfortunately, no such database exists/was available. A second option would be to use data collected by means of interviews with the companies’ marketing managers. Such interviews

could then be used to find out if and how a company’s reputation changed during that period.

However, as several sponsorship deals took place up to ten years ago and they may not keep records of such data it would cause for a decrease in the sample size. A last option would be to hold a survey asking respondents if shirt sponsorship has changed their knowledge and opinions about the sponsor. Again, this way of measurement would only be able to look at recent sponsorship deals, causing a decrease in the research sample.

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Furthermore, due to the short time frame of this research it is not realistic to investigate this association other than by showing what other researchers have found in the past.

3.4.3 Measuring sponsorship fit

To measure sponsorship fit a ranking system has been developed in which the sponsee gets assigned a number of points. When measuring the sponsorship fit the first step is to look at the geographical fit by looking at where the sponsee and sponsor originate from. The second step is to measure if there is a case of product fit. If they originate from the same country and/or there is a link between the sponsor’s business and the sponsee, there is a case of fit and two points gets assigned. However, if there if they do not originate from the same country and there is no link between the sponsor’s business and the sponsee, there is no fit and zero points het assigned. (see table 3). Thus, if there is talk of geographical fit or product fit, there is a case of fit. If there is no talk of geographical nor product fit, there is a case of no fit. The highest level of sponsorship fit occurs with a score of two points and the lowest level of fit occurs with a score of one point.

Geographical & Product fit Points

Fit: Same country and/or product link 2 No Fit: Different country and no product link 1

Table 3: Sponsorship fit point system

3.4.4. Measuring sponsee performance

Similar to measuring sponsorship fit, measuring the sponsees’ performance is also done

by means of a ranking system. To conduct a reliable Chi-Square analysis with the small sample available, the sponsee performance is divided into two categories; Low performance and High performance (see tables 5 and 7). To make two equal categories, the highest amount of receivable points has to be an even number; in this case it is twelve points. The total amount of received points will decide to which category the sponsee is assigned.

In this research there are two types of performance that are measured. The first type is the performance prior to the sponsorship. The second type is the performance during the first football season of the sponsorship.

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The performance prior to the sponsorship is measured by looking at several factors. The first factor to look at is the position of the club in the national league. If the team is in the top half of the league at the time of the sponsorship announcement, three points are assigned to the team. If the team is in the bottom half of the league at the time of the sponsorship announcement, zero point is assigned to the team. The second factor to look at the number of recent matches won prior to the sponsorship announcement. This research focuses on the last five matches prior to the sponsorship announcement. They will receive six points for winning five out of five matches, five points for winning four out of five matches, four points for winning three out of five matches, three points for winning two out of five matches, two points for winning one out of five matches and one point for winning zero out of five matches. The third and final factor to look at is if the team was league champion the season prior to the sponsorship announcement. If this is the case, the team receives three points and if this is not the case the team receives zero points. Thus, the team(s) with the highest level of performance around the announcement date, scores(s) twelve points. The team(s) with the lowest level of performance score(s) one points. The points division is shown in table 4.

League position Points

Top half 3

Bottom half 0

Most recent matches won Points

Five out of five 6

Four out of five 5

Three out of five 4

Two out of five 3

One out of five 2

None out of five 1

League champion the previous year Points

Yes 3

No 0

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Sponsee performance (prior sponsorship) Points

Low performance 1<6

High performance 7>12

Table 5: Total sponsee performance points

When measuring the performance during the first season of sponsorship, several factors are taken into account (see table 6). The first thing to look at is the position of the club in the national league at the end of that season. If the team is in the top half of the league at the end of the season, two points are assigned to the team. If the team is in the bottom half of the league at the end of the season, zero points are assigned to the team. The second step is to see if they were champion of their national league. If this is the case they receive two points and if this is not the case they receive zero points. The third step is to look at the percentage of matches won during the first season. They will receive one point for winning between 0% and 25% of their matches, two points for winning between 26% and 50% of their matches, three points for winning between 51% and 75% and four points for winning between 76% and 100% of their matches. The fourth step is to see if they have qualified to play European football or not. If they have qualified for the Champions League they receive two points, for the Europa League they receive one point and if they have not qualified they receive zero points. The fifth and final step is to see if they won a league cup that season. If they have won a cup they receive two points and if they have not won a cup they receive zero points. Thus, the team(s) with the highest level of performance during the first season of sponsorship, scores(s) twelve points. The team(s) with the lowest level of

performance score(s) one point. Based on these points the teams are divided into two types of performance levels. These are shown in table 7.

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Table6: Sponsee performance during 1st_{season point system}

Sponsee performance (1st_season) _Points

Low performance 1<6

High performance 7>12

Table 7: Total sponsee performance points during 1st_season

League position at end of 1st_season _Points

Top 2

Bottom half 0

League champion after 1st_season _Points

Yes 2

No 0

Percentage of matches won during 1st_season _Points

0%-25% 1

26%-50% 2

51%-75% 3

76%-100% 4

Qualification for European football Points

No 0

Europa League 1

Champions League 2

Winning a league cup Points

No 0

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4. Results

This Chapter will explain how the collected data is analysed and what the results are of the analyses. The results are divided into two groups, based on the two different periods used in this research.

Sponsors’ financial performance

Within the sample of 36 company-club duos, 18 companies (50%) showed their stock price increased during the first year of sponsorship and the other 18 companies (50%) showed their stock price decreased during the first year of sponsorship. Whereas, during the first football season of the sponsorship, 14 companies (38,9%) showed their stock price increased and 22 companies (66,1%) showed their stock price decreased (see table 8).

Period Stock price increase Stock price decrease

Calendar year 18 (50%) 18 (50%)

First football season 14 (38,9%) 22 (66,1%)

Table 8: Sponsors’ financial performance

Sponsorship fit

When measuring the presence of sponsorship fit, the results indicate that there were 14 (38,9%) cases of fit and 22 (66,1%) cases with no fit.

Sponsees’ performance

As for the sponsee performance prior to the sponsorship; 17 clubs (47,2%) were in the low performance group, 18 clubs (50%) were in the high performance group, and the data for one club was missing. Whereas, during the first football season; 24 (66,7%) were in the low performance group, and 12 clubs (33,3%) were in the high performance group (see table 9). It is possible that the difference is due to the different factors that were looked at during two rankings of the sponsee performance (see table 4 and table 6).

Shirt sponsorship and sponsors’ financial