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The purchasing of naming rights for sports stadiums : a harbinger of bad corporate governance or just bad timing?

Maberly, Edwin D., Pierce, Raylene and Vornik, Oleg 2003, The purchasing of naming rights for sports stadiums : a harbinger of bad corporate governance or just bad timing?, in Proceedings of the 7th New Zealand Finance Colloquium 2003, Massey University, [Palmerston North, N. Z.], pp. 1-34.

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Title The purchasing of naming rights for sports stadiums : a harbinger of bad corporate governance or just bad timing?
Author(s) Maberly, Edwin D.
Pierce, Raylene
Vornik, Oleg
Conference name New Zealand Finance Colloquium (7th : 2003 : Palmerston North, New Zealand)
Conference location Palmerston North, New Zealand
Conference dates 7-8 February, 2003
Title of proceedings Proceedings of the 7th New Zealand Finance Colloquium 2003
Publication date 2003
Start page 1
End page 34
Publisher Massey University
Place of publication [Palmerston North, N. Z.]
Summary The literature on corporate governance and the market’s delayed reaction to news events proliferated over the last two decades. This paper examines return patterns surrounding the event date for firms purchasing naming rights for North American sports stadiums. One argument appearing in the financial press is that such acquisitions are a harbinger of widespread corporate mismanagement and hubris at the highest levels of corporate governance. Purchases of stadium naming rights provide sidebenefits to executives such as “being in the limelight” and the use of supplementary corporate boxes. Thus, management has a strong incentive to undertake such investments even if their decision is not value enhancing to shareholders. The extent to which these agreements are associated with negative risk-adjusted returns is an empirical question, which this study addresses. On average, negative riskadjusted returns are observed over the three years following the event date, and these results are significant at standard levels of significance. The efficient market hypothesis suggests that these results are not due to a cause and effect relationship but represent data snooping or just bad timing.
ISSN 1175-8074
Language eng
Field of Research 150205 Investment and Risk Management
150303 Corporate Governance and Stakeholder Engagement
HERDC Research category E1.1 Full written paper - refereed
Persistent URL http://hdl.handle.net/10536/DRO/DU:30023921

Document type: Conference Paper
Collection: School of Accounting, Economics and Finance
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Created: Thu, 25 Feb 2010, 07:53:03 EST

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