Corporate Sport Sponsorship and Stock Returns

Corporate Sport Sponsorship and Stock Returns

September 16, 2015 Uncategorized
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(Last Updated On: September 16, 2015)

The NFL is back!!!

Unfortunately, the Eagles may need a new kicker…and now we have to listen to Wes talk trash about the Cowboys victory around the office. Tragic!

In the spirit of the new NFL season, I figured it was a good time to highlight a newer paper titled “Corporate Sport Sponsorship and Stock Returns: Evidence from the NFL” written by Assaf Eisdorfer and Elizabeth Kohl. Versions of the paper can be found here and here.

Here is the 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.

Here is an interesting table from the paper:

Corporate sport sponsorships and stock returns
The results are hypothetical results and are NOT an indicator of future results and do NOT represent returns that any investor actually attained. Indexes are unmanaged, do not reflect management or trading fees, and one cannot invest directly in an index. Additional information regarding the construction of these results is available upon request.

Is this a tradeable strategy?

Possibly, but I would not want to bet my own capital based on the outcome of a previous football game.

However, I am happy football is back!!!


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About the Author

Jack Vogel, Ph.D.

Jack Vogel, Ph.D., conducts research in empirical asset pricing and behavioral finance, and is a co-author of DIY FINANCIAL ADVISOR: A Simple Solution to Build and Protect Your Wealth. His dissertation investigates how behavioral biases affect the value anomaly. His academic background includes experience as an instructor and research assistant at Drexel University in both the Finance and Mathematics departments, as well as a Finance instructor at Villanova University. Dr. Vogel is currently a Managing Member of Alpha Architect, LLC, an SEC-Registered Investment Advisor, where he heads the research department and serves as the Chief Financial Officer. He has a PhD in Finance and a MS in Mathematics from Drexel University, and graduated summa cum laude with a BS in Mathematics and Education from The University of Scranton.


  • Michael Milburn

    Interesting. They state: “When all home games are included in the sample, the results do not indicate any abnormal return after wins or losses.”

    For high visibility games, if returns are related to free national brand advertising/exposure, it would seem the result should be stronger for a home team playoff win when they have another future home playoff game, and less for a home team win when they don’t have another home playoff game. Similarly, some home teams that lose wouldn’t have had another home playoff game anyway, so a home team loss might be expected to have a greater/lesser impact depending on this. I can’t tell if they addressed this, but to the degree that the returns are influenced by the free add’l advertising/exposure, it would seem that the returns would be dependent upon where “next week’s” home playoff game is expected to be played (and co-dependent upon whether a top seed wins/loses potentially changing the future venue). Similarly conference championship games might be expected to have less impact than semi-final playoff games because the next game played will be superbowl, so there is not future expected free home field exposure.

  • Jack Vogel, PhD

    Interesting points!