Outsourcing Sports Sponsorship Activities: A Multi-Theoretical Approach

Abstract

The purpose of this paper is to understand and explain why some professional sports organizations outsource their sponsorship-related activities to sports marketing agencies whereas others purposely retain these activities in-house. The paper applies the Resource-Based View (RBV) and Transaction Cost Economics (TCE) to the outsourcing of sports sponsorship activities. It examines the extent determinants descending from these theories influence the sourcing choice of professional sports organizations. We argue that RBV- and TCE-related determinants are useful to analyze which sponsorship-related activities are more or less likely to be outsourced, but they are not sufficient to answer which kinds of sports organizations will outsource and to what extent. With recourse to Contingency Theory, we propose two additional determinants, a sports organization's size and its degree of professionalism, as key drivers for the sourcing decision. Based on these additional determinants we make recommendations on how intensively different sports organizations should outsource, explain why sports organizations actually deviate from these recommended outsourcing levels, and discuss ways to counteract these deviations. This is the first paper to apply classical theoretical concepts to outsourcing sports sponsorship activities. As a conceptual paper, it hopes to stimulate further research on outsourcing in sports sponsorship and on the relationship between sports organizations and sports marketing agencies.