This Article Full Text (PDF) References Alert me when this article is cited Alert me if a correction is posted Services Email this article to a friend Similar articles in this journal Alert me to new issues of the journal Download to citation manager Google Scholar Articles by Yang, Y. Articles by Goldfarb, A.

Estimating the Value of Brand Alliances in Professional Team Sports

Faculty of Business Administration, Simon Fraser University, Burnaby, British Columbia V5A 1S6, Canada
Joseph L. Rotman School of Management, University of Toronto, Toronto, Ontario M5S 3E6, Canada
Joseph L. Rotman School of Management, University of Toronto, Toronto, Ontario M5S 3E6, Canada
yupin_yang{at}sfu.ca
mshi{at}rotman.utoronto.ca
agoldfarb{at}rotman.utoronto.ca

Brands often form alliances to enhance their brand equities. In this paper, we examine the alliances between professional athletes (athlete brands) and sports teams (team brands) in the National Basketball Association (NBA). Athletes and teams match to maximize the total added value created by the brand alliance. To understand this total value, we estimate a structural two-sided matching model using a maximum score method. Using data on the free-agency contracts signed in the NBA during the four-year period from 1994 to 1997, we find that both older players and players with higher performance are more likely to match with teams with more wins. However, controlling for performance, we find that brand alliances between high brand equity players (defined as receiving enough votes to be an all-star starter) and medium brand equity teams (defined by stadium and broadcast revenues) generate the highest value. This suggests that top brands are not necessarily best off matching with other top brands. We also provide suggestive evidence that the maximum salary policy implemented in 1998 influenced matches based on brand equity spillovers more than matches based on performance complementarities.

Key Words: branding; brand alliances; sports marketing; matching model
History: Received: November 1, 2007; accepted: April 26, 2009.