What Drives the Value of Stadium Naming Rights? A Hedonic-Pricing Approach to the Valuation of Sporting Intangible Assets

Abstract

This study adopts a multi-attribute hedonic-pricing benchmark valuation approach to the determination of the observed market value of stadium naming rights. Using a sample of 112 naming rights deals covering both major-league and nonmajor-league facilities in North America over the period of 1979-2002, a hedonic-pricing model is estimated using regression analysis. It is found that the value of stadium naming rights is highly systematic and information-efficient. Naming rights value is principally related to variables reflecting the size of potential target audiences including the economic size of the host city, the facility's capacity, the league status of the resident teams, and the diversity of the facility usage. It is also found that sponsors are prepared to pay a significant premium for virgin sites with no previous name associations.

Keywords

naming rights intangible assets valuation hedonic pricing

Get full access to this article

View all access options for this article.

References

Barker

(2001). Determining value: Valuation models and financial statements. Harlow: Pearson Education.

Crompton

J. L.

, & Howard

D. R.

(2003). The American experience with facility naming rights: Opportunities for English professional football teams. Managing Leisure, 8, 212–226.

DeSchriver

T. D.

, & Jensen

P. E.

(2003). What's in a name? Price variation in sport facility naming rights. Eastern Economic Journal, 29, 359–376.

Gerrard

(2002). Name of risk: Has the bubble burst for corporate naming rights? Stadia, January, 2–4.

Gerrard

, & Dobson

S. M.

(2000). Testing for monopoly rents in the market for playing talent: Evidence from English professional football. Journal of Economic Studies, 27, 142–164.

Lancaster

K. J.

(1966). A new approach to consumer theory. Journal of Political Economy, 74, 132–157.

Mahan

B. L.

, Polasky

, & Adams

R. M.

(2000). Valuing urban wetlands: A property price approach. Land Economics, 76, 100–113.

Pearson

(2000). What's in a name? Stadia (Showcase Special), October, 119–121.

Shank

(2002). Sports marketing: A strategic perspective (2 ed.). Upper Saddle River, NJ: Prentice Hall.

10.

Sieger

, & Patel

(2001). Striking a deal: Examining the changing landscape of naming rights. Stadia, July, 62–65.

11.

Stewart

K. G.

, & Jones

J. C. H.

(1998). Hedonics and demand analysis: The implicit demand for player attributes. Economic Inquiry, 36, 192–202.

12.

Street & Smith (2002). By the numbers. Sports Business Journal, 37, 10–11.

13.

Zabel

J. E.

, & Kiel

K. A.

(2000). Estimating the demand for air quality in four US cities. Land Economics, 76, 174–194.