Assessing Returns from New Sport Marketing Opportunities: The Case of NBA Jersey Sponsorships

Abstract

One of the newest opportunities available to sport marketing decision-makers is branding on the game-worn jerseys of teams competing in the National Basketball Association (NBA). Given the novelty of this opportunity, research on the returns marketers may receive from such investments is scarce. This study applies the event study methodology to measure shareholder reaction to the announcements of NBA jersey sponsorships utilizing multiple financial models and event windows, with results indicating abnormal and positive return on investment (ROI). Reflective of signaling theory, the market's reaction to announcements involving tech firms was more positive, and as expected based on the theoretical lens of agency theory, the reaction for firms with regional proximity was muted. Given that the NBA is one of several leagues that will be providing brand integration on game-worn jerseys, this study's findings have important managerial implications for brand marketers planning investments in such opportunities.

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