corporate sport sponsorship and stock returns evidence from.pdf

Corporate Sport Sponsorship and Stock Returns: Evidence from the NFL Assaf Eisdorfer Elizabeth Kohl April 2015 ABSTRACT Most 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. Wins in Monday night games generate next-day abnormal returns 50 basis points higher than losses. The effect is 80 basis points in the post-season and when the game outcome is unexpected. This does not revert over the next few days. Outcomes of NFL games could serve as a reasonably exogenous instrument for investor sentiment. Keywords: Stock returns; Sport sponsorship JEL Classifications: A12, G12, G14 * Assaf Eisdorfer is from University of Connecticut; Assaf.Eisdorfer@. Elizabeth Kohl is from University of Connecticut; Elizabeth.Kohl@. We thank Ivo Welch, and seminar participants at University of Connecticut, Hebrew University of Jerusalem, and Interdisciplinary Center Herzliya for helpful comments. All errors are our own. 1. Introduction Consider a major sport team that is hosting an important and highly rated televised match, at which it is expected to win. The match is played at the team’s home stadium, which is named after the team’s sponso