Deakin University
Browse

File(s) under permanent embargo

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

conference contribution
posted on 2003-01-01, 00:00 authored by E Maberly, R Pierce, O Vornik
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.

History

Event

New Zealand Finance Colloquium (7th : 2003 : Palmerston North, New Zealand)

Pagination

1 - 34

Publisher

Massey University

Location

Palmerston North, New Zealand

Place of publication

[Palmerston North, N. Z.]

Start date

2003-02-07

End date

2003-02-08

ISSN

1175-8074

Language

eng

Publication classification

E1.1 Full written paper - refereed

Title of proceedings

Proceedings of the 7th New Zealand Finance Colloquium 2003

Usage metrics

    Research Publications

    Categories

    No categories selected

    Keywords

    Exports

    RefWorks
    BibTeX
    Ref. manager
    Endnote
    DataCite
    NLM
    DC