Green Bay Packers

Study: Winning NFL teams can trickle down big money to sponsors

Published Sep. 11, 2015 11:58 a.m. ET

foxsports

America loves winners.

Nowhere is the line between victory and defeat drawn more clearly than in the NFL. And while teams battle for supremacy on the field, big coporations fight for stadium-naming rights around the league.

As it turns out, getting your publicly-traded company's name attached to a winning team's building can have a positive effect on your stock price.

According to a story on CNBC.com, two researchers at the University of Connecticut wrote a piece for a business journal which says that sponsors of winning teams get an abnormal return of investment.

The evidence doesn't reveal itself during a typical Sunday NFL game. However, if the team a company sponsors plays a game on a Monday night or in the postseason, the numbers spike.

From CNBC:

A win during the postseason has a positive effect on the stadium sponsor's stock price, the authors found, to the tune of 82 basis points higher than a loss when averaged out over six models. Monday night games too, generate an abnormal return of 50 basis points higher.

Monday night matchups, of course, are special because there's just the one game on, so they're not competing with the rest of the NFL for TV airtime. Plus it's always shown in prime time and the league tends to schedule bigger games for "Monday Night Football."

That means that while a company spends millions of dollars annually for stadium sponsorship -- Procter & Gamble spends an average of $7 million for the naming rights to Gillette Stadium in Foxborough, Massachusetts -- they can make that back in market capitalization in just one high-profile game.

"We were surprised by the magnitude of the effect," said Assaf Eisdorfer, professor of finance and co-author of the paper. "Typical games don't show any effect but it definitely happens in Monday night games [when] 30 or 40 million viewers see and hear the sponsor for three or four hours."

And what's interesting, it doesn't matter if the team plays in a small or big market.

From CNBC:

The Carolina Panthers who play in the fourth-largest market among teams studied showed a similar abnormal return as the Tennessee Titans, the smallest market.

"You have the population of the large markets, but in the small markets you get really loyal fan bases," said Elizabeth Kohl, professor of accounting at the University of Cincinnati (she was at Connecticut when the research was done.) "The magnitude is not driven by the size of the market."

Researchers looked at home games of NFL teams with stadiums sponsored by publicly traded companies and checked the status of their stock after wins and losses. The study took place from 1996-2013 with a focus on games played on Monday nights, playoffs and so-called "upsets" -- meaning, games in which the final score was at least five points outside the pregame betting line.

The NFL is an excellent test subject for this kind of research because it plays far fewer games compared to the NBA, NHL and MLB. What's more, it's the most-watched and most popular sport in the United States by a wide margin.

So, if you're trying to jack your stock price up, try and bully your way into some kind of deal with the Patriots, Seahawks, Packers and any other franchise that can get on TV on Monday night or make the playoffs. It appears you won't be sorry.