The Link between Brand Equity and On-Field Performance in Professional Sports: An Exploratory Study

By Hattula, Stefan | Sport Marketing Quarterly, September 2018 | Go to article overview

The Link between Brand Equity and On-Field Performance in Professional Sports: An Exploratory Study


Hattula, Stefan, Sport Marketing Quarterly


Introduction

In the assumption that a strong brand is a critical success factor (Shuv-Ami, Thrassou, & Vrontis, 2015), sports clubs such as the Chicago Bears and Manchester United invest heavily in branding activities (Gladden & Funk, 2002). For instance, in 2016, the clubs of the German premier soccer league reported brand advertising expenditures of more than $4.3 million in total. However, like in most industries, club managers need to justify investments to their shareholders (Pinnuck & Potter, 2006). Owners of sports clubs ask for evidence that brand equity indeed contributes to performance goals: (1) the business side of a sports club considers the contribution to financial goals such as increases in sales and (2) the product side of a club focuses on superior on-field performance (Bloom, 1999; Smith & Stewart, 2010).

Yet, performance effects of branding were primarily studied from the business side's view. Previous results indicate a positive contribution of brand equity to financial measures such as revenues from merchandising (Gladden & Milne, 1999; Kerr & Gladden, 2008), sponsorships, and attendance numbers (Bauer, Sauer, & Schmitt, 2005; Robinson & Miller, 2003). In contrast, research has paid little attention to the relationship between brand equity and on-field performance. Initial studies (Gladden, Milne, & Sutton, 1998)have only considered how on-field performance stimulates brand equity by attracting TV exposure and enhancing atmosphere at games. This view, however, neglects that just as consumers form beliefs about a club's brand that affect their preferences and behavior (Biscaia, Correia, Ross, Rosado, & Maroco, 2013; Ross, 2006), so do current and potential employees of sports clubs and, in particular, players, coaches, and team managers as the key resources of on-field performance (Collins & Stevens, 2002; Wright, Smart, & McMahan, 1995). Specifically, potential employees may prefer working for clubs with a positive brand (Yang, Shi, & Goldfarb, 2009), increasing the chance for clubs to recruit sport-related talents (Cable & Turban, 2003; Lee, Miloch, Kraft, & Tatum, 2008).

Moreover, the current staff's behavior might be influenced by what consumers think of a brand. Employees are usually more involved and identify with brands that are liked by external actors (Kimpakorn & Tocquer, 2009). As a consequence, players show additional psychological and physiological engagement to achieve clubs' goals (Kahn, 1990). For example, when Liverpool captain Steven Gerrard was asked in 2013 why he did not move to Champions League winners Bayern Munich, he said that "[a] traditional club like Liverpool still has a value, that's the reason why I have stuck around for so long. It is more important to win a couple of trophies and achieve something that is a lot more difficult than go down the easy road and move to a club where it becomes easier" (de Menezes, 2013). This statement illustrates his extra motivation to win matches for the brand he identified with.

The present research explores the relevance of brand equity from the product side of a club, and examines whether superior brand equity helps achieve on-field performance goals:

RQ: Does the brand equity of a sports club influence the on-field performance and if so, what is the nature of this relationship?

To answer this question, this research reports an analysis of secondary data from the German soccer market. The results show that on-field performance of sports clubs indeed varies with brand equity. Specifically, the relationship is positive and non-monotonic, diminishing such that increases in brand equity stimulate on-field performance more at lower levels than comparable improvements at higher levels of brand equity. Therefore, the results provide empirical evidence for the relevance of branding sports clubs to achieve performance goals-a link which has previously been assumed but not yet empirically tested (Gladden & Milne, 1999; Shannon, 1999). …

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