Sport sponsorship and stock returns during Covid-19: an event management review in Switzerland

Abstract

The purpose of this study was to examine the Switzerland professional football league teams event management and jersey sponsors stock price returns fluctuations following the match day during COVID-19. Since few jersey sponsors are not listed companies, we focus on sponsors which are listed in the financial markets. Furthermore, for reasons of media coverage and spectator numbers, we focus on “Credit Suisse Super League” since has had the largest TV audience during COVID-19 in Switzerland. Strategic partners, rivals, clients, and other stakeholders need to know essential details about the general health and well-being of publicly listed companies in order to make informed decisions. We investigate, if victories or defeats yield positive or negative stock price fluctuations and if the team performance has different affect in newly growing or well-established firms. Initially, it is observed that in sporting events where teams experience defeat, the presence of jersey sponsors is associated with adverse abnormal returns. The disparity in the impact of victories and losses can be elucidated by the presence of an allegiance bias. Moreover, it was observed that matches exhibiting goal differences exceeding two goals displayed considerably higher positive or negative returns within the initial week following the match. The football and the financial market industry should take into account these recent empirical findings to for the efficacy of sports sponsorship. Finally, the size of this effect is expected to depend on the relevance of matches and should be most pronounced for the most popular teams. This makes good economic sense since victory or defeat easily has more direct consequences for a team and hence for a sponsor.