By |Published On: September 16th, 2015|Categories: Uncategorized|

The NFL is back!!!

Unfortunately, the Eagles may need a new kicker…and now we have to listen to Wes talk trash about the Cowboys victory around the office. Tragic!

In the spirit of the new NFL season, I figured it was a good time to highlight a newer paper titled “Corporate Sport Sponsorship and Stock Returns: Evidence from the NFL” written by Assaf Eisdorfer and Elizabeth Kohl. Versions of the paper can be found here and here.

Here is the abstract:

Most of the home stadiums/arenas of major-sport teams in the U.S. are sponsored by large publicly traded companies. Using NFL data we find that stock returns to the sponsoring firms are affected by the outcomes of games played in their stadiums. For example, the mean difference between next-day abnormal returns after a win and after a loss of the home team is 50 basis points for Monday night games and 82 basis points for post-season elimination games. Evidence suggests that this effect is partially driven by investor sentiment. The next-day abnormal return is further carried to subsequent days, providing profitable trading strategies.

Here is an interesting table from the paper:

Corporate sport sponsorships and stock returns

The results are hypothetical results and are NOT an indicator of future results and do NOT represent returns that any investor actually attained. Indexes are unmanaged, do not reflect management or trading fees, and one cannot invest directly in an index. Additional information regarding the construction of these results is available upon request.

Is this a tradeable strategy?

Possibly, but I would not want to bet my own capital based on the outcome of a previous football game.

However, I am happy football is back!!!

About the Author: Jack Vogel, PhD

Jack Vogel, PhD
Jack Vogel, Ph.D., conducts research in empirical asset pricing and behavioral finance, and is a co-author of DIY FINANCIAL ADVISOR: A Simple Solution to Build and Protect Your Wealth. His dissertation investigates how behavioral biases affect the value anomaly. His academic background includes experience as an instructor and research assistant at Drexel University in both the Finance and Mathematics departments, as well as a Finance instructor at Villanova University. Dr. Vogel is currently a Managing Member of Alpha Architect, LLC, an SEC-Registered Investment Advisor, where he heads the research department and serves as the Chief Financial Officer. He has a PhD in Finance and a MS in Mathematics from Drexel University, and graduated summa cum laude with a BS in Mathematics and Education from The University of Scranton.