Are Olympic Sponsorships Worth it? The Case of the Vancouver 2010 Winter Olympic Games

As corporate sponsorship of sporting events becomes a more popular marketing tool, the price tag associated with these sponsorship agreements has steepened considerably. Over the past thirty years, sponsorship has become an integral part of the Olympic Games. In this paper, we employ an event study methodology to assess the impact of both the Vancouver 2010 Winter Olympic Games and the performance of Canadian Olympic athletes on the shareholder value of national Olympic sponsors. We hypothesize, in line with current behavioral finance research, that the national Olympic sponsors will capitalize on the positive mood and attention associated with the Games in such a way that Olympic sponsorship will positively impact shareholder value. However, we find that, from a stock return perspective, corporate sponsorship of the Vancouver 2010 Olympic Games is not a value-adding investment. We find that while the market index is positively impacted by both the Olympic Games and Canadian medalists, there is a negative and significant impact of the Olympic Games on national sponsors. Furthermore, Canadian medalists have a positive impact on the stock returns of three individual sponsors, but these winners\u27 effects are negative for two sponsors and insignificant for another two sponsors