Soccer Sponsor: Fan Or Businessman?

This paper investigates how soccer sponsorship influences the financial performance of sponsors. We use an instrumental variable regression framework combined with a fixed effects model to avoid the possible endogeneity raised by omitted variables and reverse causality. The number of tweets containing both team and sponsor names were collected to use as the instrumental variable. Top European leagues were analyzed. Our results show that soccer sponsorship is more charity than commercial investment. Shareholders should be aware of sponsorship deals, and senior management should analyze the financial assumptions of cash flow forecasting for such projects carefully.