Why do marketing partnerships end? Evidence from global sport sponsorships

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With $57 billion allocated towards sponsorship annually, it has become an integral part of the marketing mix for firms and is necessary for the survival of many sport organizations. Despite the importance of these partnerships, conditions that can jeopardize what is intended by both sides to be a long-term relationship are under-researched. Utilizing survival analysis modeling to empirically examine a longitudinal dataset of 69 global sponsorships of the Olympic Games and FIFA World Cup, this research seeks to isolate factors that may predict the dissolution of such partnerships and test a dynamic, integrated model of sponsorship decision-making. Results indicate that groups of dyadic, seller-focused, and buyer-focused factors all predict a significant amount of incremental variance in the hazard (i.e., probability) of sponsorship dissolution. Among variables that are statistically significant predictors of the dissolution of sponsorships are economic conditions, such as the presence of an inflationary economy in the home country of the sponsor. For example, every one percent increase in the average annual growth rate of the consumer price index during the term of the sponsorship increases the hazard of dissolution by 28.3%. From the perspective of the sponsored property, increased clutter is also detrimental, with every one additional sponsor added increasing the hazard of dissolution by 46.7%, demonstrating the importance of exclusivity in global sponsorships. Consistent with past research on sponsoring brands, both congruence and high levels of brand equity reduces the hazard of dissolution, by 70.6% and 65.9%, respectively.

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