Athletic Apparel: Forecasting Sponsorship Costs in Intercollegiate Athletics

What is it about?

This exploratory study developed a framework for predicting sponsorship costs in the competitive athletic apparel industry, focusing on agreements with US intercollegiate athletic programs. A hierarchical regression analysis found that property-specific factors (like being a member of a "power" conference, enrollment, and the number of student-athletes) and performance-related factors (like football attendance and NCAA basketball appearances) were significant predictors of costs. For example, each football fan attending a game was valued at $33 in sponsorship costs for the apparel brand. Conversely, broad market-related variables (like market population and median income) were found to be non-significant predictors. The results indicated that market leader Nike was able to negotiate substantial savings (underpaying by 18.3%), while challenger brands Adidas and Under Armour appeared to overpay significantly in their push for market dominance. The study also revealed potential agency conflicts, as some resources were allocated to programs based on their proximity to corporate headquarters.

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Photo by Emma Dau on Unsplash

Photo by Emma Dau on Unsplash