What Drives the Price of Naming Rights? Quantifying the Relationship Between Naming Rights Prices and the Factors that Drive Them

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2014
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Haverford College. Department of Economics
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Thesis
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eng
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Open Access
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Abstract
This thesis examines the relationship between the prices of naming rights and the factors that drive them. Corporations engage in naming rights deals in order to increase revenue and exposure for their brand. Naming rights deals are a very lucrative type of sports sponsorship and can reach to the tens of millions annually, largely due to the unparalleled amount of exposure seen by the corporation. Past research has suggested that the prices of naming rights are positively driven by the potential target size of the audience, the building of a new facility, and that there has been a long-term price inflation of naming rights fees up until 2002. Using OLS regression, this thesis examines the effect that different facility characteristics have on both total fee and annual fee. One hundred sports facilities from Major League Baseball, the National Hockey League, the National Football League, the National Basketball Association, Minor League Baseball, Major League Soccer, and Division I College were observed. The findings in this thesis suggest that that total attendance has a positive and significant effect on both total and annual fees, facilities home to Major League Baseball, National Basketball Association, National Football League, and National Hockey League teams have higher premiums than Major League Soccer, Minor League Baseball, and collegiate facilities, and annual long-term price inflation has decreased since 2002.
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