Influences on Sponsorship Deals in NASCAR: Indirect Evidence from Time on Camera by Kurt W. Rotthoff1 Assistant Professor Department of Economics and Legal Studies Seton Hall University Craig A. Depken, II Professor Department of Economics University of North Carolina – Charlotte Peter A. Groothuis Professor Department of Economics Appalachian State University ABSTRACT: When corporate sponsors want to maximize their exposure, they often focus sponsorship dollars on events, teams, and athletes that will prove to be reliable, respectable, and, most important, repetitive advertising outlets. Analyzing the factors that increase a broadcaster’s propensity to display a sponsor during television broadcasts is often hard to measure. Using a unique data set describing NASCAR broadcasts, we indirectly analyze what influences the value of a sponsorship contract through a proxy for driver sponsorship value: the value of time on camera. We find that the value of time on camera is influenced by driver performance and their celebrity status, as measured by driver experience and inherited brand-name capital. Although the values of individual sponsorship contracts are generally not reported, the evidence herein suggests that driver performance and status likely influence the value of NASCAR sponsorship contracts. KEY WORDS: Sports, Sponsorship, NASCAR, Naming Rights, Return on Investment, Advertising JEL Codes: D23, L14, M31, M37 1 Craig Depken:
[email protected] or 704.687.7484; Peter Groothuis:
[email protected] or 828.262.6077; Kurt W Rotthoff:
[email protected] or 973.761.9102. We appreciate comments received by seminar participants at the 2010 Southern Economic Association annual meetings. Any mistakes are our own. 1 I. Introduction Broadcasters often have a major influence on the value of marketing strategies.