Corporate Sport Sponsorship and Stock Returns: Evidence from the NFL

Abstract

Most of the home stadiums/arenas of major-sport teams in the U.S. are sponsored by large publicly traded companies. Using NFL data we find that stock returns to the sponsoring firms are affected by the outcomes of games played in their stadiums. For example, the mean difference between next-day abnormal returns after a win and after a loss of the home team is 50 basis points for Monday night games and 82 basis points for post-season elimination games. Evidence suggests that this effect is partially driven by investor sentiment. The next-day abnormal return is further carried to subsequent days, providing profitable trading strategies.

Keywords: Stock returns; Sport sponsorship

JEL Classification: A12, G12, G14