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: | Nicolau Juan L |
Keywords: | brand identity, Spain |
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.