Dynamics and peer effects of brand revenue in college sports

Abstract

Team branding plays a key role in attracting corporate sponsorship for the multi-billion dollar business of college sports. In this paper, we study peer effects in the dynamic brand revenue evolution of major college sports teams that play in the same National Collegiate Athletic Association conferences. To examine the peer effects in each conference, we propose a new dynamic model that can identify conference-specific peer effects while capturing the dynamic evolution of brand revenue. Our model estimation results reveal significant positive peer effects in the six conferences — ACC, Big 12, Big East, Big Ten, SEC, and Pac-12 — where the brand revenue of teams benefit from other teams in the same conference. Our modeling approach also sheds light on the effect of a conference switch on a team's brand revenue by showing the difference between predicted brand revenue with a switch and the predicted brand revenue without a switch.