Latest News

Back to Latest News back

 

Companies that sponsor outperform those that don’t

Companies that sponsor outperform those that don’t
September 9, 2011

Companies that invest in sponsorship outperform those that don't according to new research published by the International Journal of Sports Marketing & Sponsorship.

Does sponsorship pay off? An examination of the relationship between investment in sponsorship and business performance also shows that spend at above average rates on sponsorship (so called 'super sponsors') also outperform those that spend at below average rates.

The research, led by Professor Jonathan A. Jensen of Columbia College Chicago, analysed 50 major US corporations including NIKE, AT&T, Coca-Cola, VISA, McDonald's and Ford over a five-year period. The researchers analysed key performance indicators such as stock price appreciation, total revenue, net income and earnings per share. To adjust for company size, annual compound growth rates (CAGR) and percentage changes for stock price were also factored.

During the five year period between 2005/09, the super sponsors outperformed other S&P companies in three of the four key performance indicators.

The super sponsors who had the highest net income growth over the five-year period were General Motors (107.9%), Anheuser-Busch (35%), Ford (26.0%), AT&T (19.7%) and Procter & Gamble (13.5%). All but three of the super sponsors (Bank of America, Verizon and FedEx) posted higher net income growth than the average of the Standard & Poor (S&P) 500 index (6.5%).

The top super sponsors in terms of growth in earnings per share were General Motors (111.8%), McDonald's (16.8%), AT&T (10.9%) and Nike (10.2%). All but two of the companies (Anheuser-Busch and Verizon) posted earnings per share growth rates that exceeded the S&P 500 index average of 6.97%.

In terms of stock price appreciation, the super sponsors declined by an average of 0.64%, compared to a decrease of 7.94% for the S&P 500 index. The super sponsors who realised the highest percentage increase in stock price were McDonald's (96.2%), Visa (66.7%), Nike (45.7%) and Coca-Cola (37.2%).

In addition to achieving higher than market averages, the super sponsors also outperformed the companies on the list who invested in sponsorship at a below-average level, in revenue growth, net income growth and earnings per share growth. As a group, the companies who invested an average of

US$33.7 million per year in sponsorship (versus an average of US$160 million per year by super sponsors) had an average revenue growth of 6.56%, average net income growth of 0.07% and average EPS growth of 3.03%. As a group, the 35 peer companies realised a mean stock price increase of 3.85%.

Professor Jensen explains "we do not suggest a causal relationship between investment in sponsorship and business performance, rather, it is our theory that these companies have consistently outperformed peer companies who spend less on sponsorship and due to the fact that they already enjoy the benefits of their brands being more established and valuable compared to their peers, which contributes to better company performance over time. Their consistent investment in sponsorship is reflective of their efforts to continue to nurture their brands, which, according to branding experts, are among some of the most valuable in the world."

The research's Executive Summary can be viewed by clicking here www.imrpublications.com/imr/login-table.aspx?sum=216&volno=L&no=L

For more information please contact Simon Rines, Publisher, International Journal of Sports Marketing & Sponsorship on +44 1364 642 224, E: srines@imrpublications.com

6th November 2010 - INFLATED CROWD FIGURES SHORT-CHANGE SPONSORS

18th August 2010 - CHINESE COMPANIES SET TO SPONSOR MAJOR INTERNATIONAL SPORTS PROPERTIES

17th May 2010 - ARABIAN GULF APPROACH TO SPORT SPONSORSHIP ‘NEEDS TO CHANGE’ 

29th June 2009 - NUTRI-GRAIN AND BILLABONG MOST RECOGNISED SPORTS SPONSORS 

17th February 2009 - SPORTS SPONSORSHIP IN DECLINE


Asking a small favour
We hope that you value the news that we publish so while you're here can we ask for your support?

The news we publish at www.ausleisure.com.au is independent, credible (we hope) and free for you to access, with no pay walls and no annoying pop-up ads.

However, as an independent publisher, can we ask for you to support us by subscribing to the printed Australasian Leisure Management magazine - if you don't already do so.

Published bi-monthly since 1997, the printed Australasian Leisure Management differs from this website in that it publishes longer, in-depth and analytical features covering aquatics, attractions, entertainment, events, fitness, parks, recreation, sport, tourism and venues management.

Subscriptions cost just $90 a year.

Click here to subscribe.

 

supplier directory

The Complete Guide to Leisure Industry Products & Services.

See the directory see all

SeatGeek Asia Pacific

SeatGeek is a search engine and mobile-focused ticket marketplace that allows fans to buy and sell tickets for live events. As of August 2018, SeatGeek has exited the Australian, New…

read more

Entertainment / Sport / Technology / Ticketing / Venues

 
 

Neptune Benson

Neptune Benson is a manufacturer of high quality water filtration and disinfection products for the recreational, industrial, and municipal water markets. With more than 20,000 installations…

read more

Aquatics / Design / Recreation

 
 

DEBITSUCCESS

Over the past 10 years Debitsuccess has been providing expert billing services to businesses across Australia. Debitsuccess is now the largest full service direct debit provider in Australasia,…

read more

Billing / Finance / Fitness / Golf / Recreation

 
 

Digonex

Digonex is a leading provider of customised dynamic pricing solutions to clients in arts and entertainment, sport, attractions, cultural institutions and retail sectors. Digonex’s technology is…

read more

Attractions / Entertainment / Sport / Technology / Ticketing

 
 

SLE WORLDWIDE AUSTRALIA PTY LTD

SLE Worldwide Australia is a Managing General Underwriter specialising in insuring risks in the world of Sports, Leisure and Entertainment. Be it relaxing, playing, organising or watching sports,…

read more

Insurance / Venues

 
 

HTS Group Ltd

HTS Group Ltd provides a complete design, system integration, installation and maintenance package to the transportation, traffic engineering, parking and sports timing industries in New Zealand,…

read more

Aquatics / Events / Sport / Technology

 
 

LANDER & ROGERS

Lander & Rogers' Sports Business Group is the leading sports law practice in Australia, representing over 150 national and international sporting bodies. Our clients include international…

read more

Legal

 
 

HQH FITNESS

HQH Fitness is an international company that specialises in improving the health, fitness and wellness of people everywhere. We are the South Pacific distributors for Total Gym/GRAVITY Education and…

read more

Fitness / Recreation / Technology / Wellness

 
 
 
 

get listed with our suppliers directory

Get your business noticed in our targeted directory. Viewed by 10,000 industry professionals per week!

list your business