The Impact of Corruption on Sport Sponsorship

Abstract

Corruption can have a major impact on sport sponsors. Competition corruption, which influences the outcome of a contest, or management corruption, which deals with the administration of a sport event or organization, may have a negative effect on a sport sponsor’s brand. The corruption may create a negative impact for the sport sponsors. The association with a corruption sport organization can create a horn effect thus tarnishing the sponsor’s brand image. Further, a consumer may lower its intent to purchase the sponsor’s product based on that association. This paper investigates the impact of corruption on sport sponsorships. Global sport is besieged by corruption. For example, the FIFA’s World Cup events and organizational elections are consistently accused of fraud. The IOC had the Olympic Games bidding process tarnished due to bribery. The United States’ NCAA faces illegal payoffs associated with its basketball programs. International cycling suffered a devastating response by sponsors to its doping and cheating scandals. Cricket continues to suffer from match-fixing allegations. Corruption infects all sports. First, this study investigates the issue of sport corruption and scrutinizes the legal constraints to recommend effective sport sponsorship activation. It focuses on the act of bribery because this behavior led to many of the more infamous and problematic scandals for sponsors. Then the study examines the impact of this behavior on the sponsors, sport organizations, and consumers. Thus, this dissertation seeks to answer four research questions: First, how can a sport sponsor protect itself from a bribery violation? Next, is there a horn effect for a sponsor affiliated with a corrupt event? Then, does a sponsor suffer lower purchase intentions when affiliated with a corrupt event? Finally, does a sponsor suffer lower purchase intentions when the sponsor commits corruptive behavior? The findings of this study confirm that corruption may negatively impact the sport sponsor. Sport sponsors need to invest financial and human resources to create a compliant corporate culture to protect against corruptive behavior. Sport fans may support sponsors of an alleged corrupt sport but this support lessens when that corruption is proven. This support is further lessened when that corruption brings harm to the fan’s favorite team, country or sport. Conversely, the ongoing FIFA scandals have not created a negative association for a local Finnish football club. Finally, although fans suggest a negative purchase intention for corrupt sponsors. The potential insights are valuable to a sponsor and a sport organization. Both take proactive steps to protect the marketing investment against negative actions resulting from corruption.