The decision to raise firm value through a sports‐business exchange: How much are Real Madrid’s goals worth to its president’s company’s goals?

The decision to raise firm value through a sports‐business exchange: How much are Real Madrid’s goals worth to its president’s company’s goals?

0.00 Avg rating0 Votes
Article ID: iaor20117718
Volume: 215
Issue: 1
Start Page Number: 281
End Page Number: 288
Publication Date: Nov 2011
Journal: European Journal of Operational Research
Authors:
Keywords: brand identity, Spain
Abstract:

Global brands emerging from the world of sports are becoming commonplace, and firms invest in the realm of sports, usually through sponsorship initiatives, to get a link with these global brands. Over and above just a mere business link, what if a company makes a personal commitment to get into the core of a renowned, celebrated sports team? This article provides managers with a procedure to analyze, in a weekly basis, how valuable this type of decision is. A conceptual model shows that the personal involvement of a firm’s figurehead in a first‐class sports club can impact positively on firm value if the person is doing well in the task s/he is entrusted with by the club. The empirical application to the soccer club Real Madrid, over 1,409days and 215 matches, finds that the club’s performance on the field has a significant impact on the economic returns of its president’s company, with asymmetrical effects on firm value in a ‘loss aversion’ pattern, that is, lost matches have a greater effect on firm value than games won.

Reviews

Required fields are marked *. Your email address will not be published.