Investigating sponsor decision-making: the role of schema theory, agency conflicts, and signaling theory in the persistence of naming rights agreements

Abstract

Naming rights sponsorships of sport facilities are among the most highly visible marketing agreements in the world. However, factors that may lead one sponsorship to persist for decades, while others end after just a few years, have yet to be investigated. Thus, this study examines the decision-making of brand marketers by investigating the predictors of a sponsoring brand's decision to either continue or dissolve such agreements.,Utilizing a global data set of 219 naming rights agreements, an empirical approach is utilized to isolate whether a variety of factors increase or decrease the probability of sponsorship dissolution.,Results indicate that agreements entered into with new, as of yet-unnamed facilities lead to a reduction in the probability of dissolution, with a high level of brand equity also reducing the probability of dissolution. Agency conflicts may also play a role, as the sponsoring firm being headquartered in the same metropolitan area as the facility also contributes to the persistence of such agreements.,These results are intended to assist both sides of what is ideally a long-term relationship in better understanding the factors that may either contribute to or inhibit longer-term partnerships.