Abstract
ABSTRACTThe Fédération Internationale de Football Association's World Cup (FIFA WC) is one of the most popular sporting events in the world in general and Europe in particular, and famous for the extraordinary amount of sponsorship fees it attracts. To create value for the stockholders of FIFA’s respective commercial affiliates, these sponsorship expenses should be exceeded by (discounted) future cash flows in order to make this investment profitable. This study analyses return effects for stockholders of FIFA WC Commercial Affiliates, while distinguishing between several image scenarios pertaining to FIFA and applying several models for calculating abnormal returns. We find weak evidence for significant positive abnormal returns of announced FIFA sponsorships in case of a stable FIFA image across different return models. In contrast, we find negative abnormal returns when the latest corruption scandals around FIFA became public. We also detect negative price effects when Gianni Infantino was announced as new FIFA president. The image-related price effects become less pronounced for FIFA Partners and initially closed sponsorship contracts. Finally, we do not find any image-related spillover effects for main competitors of firms sponsoring FIFA.
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