Value of Naming Rights Agreements

Examination of the economic benefits of private investment in the naming rights for stadiums has been sparse, with most investigation related to marketing. Through examination of previous literature, the authors of this study found no lasting influence on the profitability of sponsoring organizations. Using events-study analysis methodology, the authors examined the long term economic benefits of sports facility naming rights agreements. Analysis included naming rights deals for professional sports franchises in the United States and Canada over a 14-year period (1990-2004). The authors determined that naming rights agreements offered no economic benefit, in terms of abnormal value, to the companies that purchased them. In addition, the authors proposed that naming rights agreements normally do not outperform other organizational investments with regards to company profitability. Information presented in this study could assist sport managers in the development of a comprehensive evaluation model for sport sponsorship agreements.