When sports sponsorship incurs brand risk: the roles of team performance, brand familiarity and team identification

PurposeThis study investigated the potential negative effects of a sponsored team's losing performance on audiences' trust and purchase intention toward the sponsoring brand. Shedding light on the moderating role of sponsoring brand familiarity among audiences and audience team identification regarding such negative effects, the study establishes when sports sponsorship may incur risk to a sponsoring brand.Design/methodology/approachThree experimental designs (audience as stimulus of a team's losing vs control condition) were used to indicate whether and when losing performance influences participants' trust and purchase intention toward the sponsoring brand.FindingsThe participants in the losing condition report lower brand trust and purchase intention. Brand trust mediates the relationship between losing results and decreased purchase intention. The negative effects of losing on brand trust and purchase intention only appear when the sponsoring brand has low familiarity among audiences and only for audiences with low identification.Practical implicationsThe strategy of a brand with low familiarity sponsoring a team that frequently loses has risks and is not worth advocating. However, if an unknown brand has already sponsored a team that often loses, the efforts to cultivate audiences' identification with the team can reduce the potential risks.Originality/valueThe affirmed negative effects of losing performance on brand trust and purchase intention have value for firm sponsorship decisions. This study contributes to the sponsorship literature by revealing two boundary conditions (sponsoring brand familiarity and audiences' team identification) for those negative effects.