Sport sponsorship as a strategic investment: an integrated assessment of stock prices, government risk and brand impact, surpluses and shortages

Abstract

This study delves into the effects of sustainability investments, financial leverage, and growth rates on stock price returns within football clubs. Employing a combination of data envelopment analysis and regression analysis, our research uncovers critical insights. Firstly, sustainability investments emerge as significant drivers of football clubs' stock price returns, indicating investor appreciation and underlining the pivotal role of sustainable practices. Secondly, a positive correlation is identified between the growth of football clubs and their stock price performance, highlighting the importance of growth strategies in stock price dynamics. Thirdly, although no significant association between financial leverage and sustainability investments is detected, it suggests the presence of other factors shaping clubs' decisions regarding sustainability initiatives. Furthermore, the study delineates its limitations, emphasizing the necessity for further exploration into the motivators behind clubs' sustainability endeavors. These findings carry profound implications for both academia and industry, accentuating the positive repercussions of sustainability investments on stock returns and advocating for nuanced approaches that intertwine financial decisions with sustainability pursuits in football clubs. In addition, the study elucidates the econometric methodologies employed to assess stock prices alongside sporting performance, elucidating the impact of football outcomes on the stock prices of jersey sponsors. Lastly, the study concludes by delving into the economic dynamics surrounding the hosting of the Olympic Games, revealing a positive nexus between hosting the Olympics and GDP growth, while stressing the significance of informed decision-making and enduring sustainability considerations.