How do sponsorship deal terminations affect the attitudes of fans toward the sponsor?

Diploma Thesis, 2012
70 Pages, Grade: 1


Table of contents

List of tables

List of figures

1. Introduction
1.1. Problem statement
1.2. Aim of the thesis
1.3. Structure of the thesis

2. Theoretical framework
2.1. Sponsorship and fan-team-sponsor relationship
2.1.1. Relationship between fan and team
2.1.2. Relationship between team and sponsor
2.1.3. Relationship between fan and sponsor
2.2. Sponsorship deal terminations
2.2.1. Relationship development
2.2.2. Dissolving partner relationships and the effects on attitudes
2.2.3. Relationship quality factors moderating the effects of termination on attitudes toward the relationship terminator

2.2.4. Sponsorship deal terminations and the effects on fan attitudes toward the sponsor
2.3. Hypotheses framework

3. Empirical study
3.1. Experimental design
3.2. Questionnaire design
3.3. Stimulus material
3.4. Data collection and data analysis
3.5. Hypotheses testing

4. Conclusion, implications and further research
4.1. Summary
4.2. Conclusion
4.3. Limitations and further research

Bibliography Appendices

List of tables

Table 1: Factors and factor levels in experimental and control group

Table 2: Manipulation check: mean comparisons of experimental conditions within each design factor

Table 3: Hypothesis testing: mean comparisons of attitude change depending on experimental conditions

List of figures

Figure 1: The Psychological Continuum Model (Funk and James 2001)

Figure 2: Relationship dyad between sponsor and team/fan (own illustration)

Figure 3: Relationship development model based on Levinger (1983) (own illustration)

Figure 4: Hypotheses framework (own illustration)

Figure 5: Experimental design and procedure

Figure 6: Data analysis procedure

Figure 7: Hypotheses framework with supported and rejected hypotheses

1. Introduction

1.1. Problem Statement

Sponsorship is a business relationship between a provider of funds, resources or services and an individual, event or organisation which offers in return rights and association that may be used for commercial advantage in return for the sponsorship investment (BDS Sponsorship 2011). As sponsors, organisations are increasing their expenditures on sponsorships with the goal to transfer positive feelings consumers have toward a property onto the sponsor’s brand in order to increase brand awareness, to establish, strengthen or change brand image as well as to achieve consumer gratitude (Cornwell and Maignan 1998, Crimmins and Horn 1996, Gwinner 1997, Gwinner and Eaton 1999, Speed and Thompson 2000). Previous research has focused on the early stages of a sponsorship relationship and the effects on consumers. However, few attempts have been made so far to study the impact on fan behaviour resulting from a termination of the sponsorship relationship between a sponsor and the sponsored property (i.e. a sports team). In the last years and months, a couple of firms decided to terminate sponsorship deals; Toyota, for example, withdrew its Formula One Teams in 2010 (Formula One 2009), Red Bull pulled out of NASCAR (Blount 2011) and the German bank Sparkasse terminated the sponsorship deal with the German soccer team Fortuna Düsseldorf ( Zschoche, Otte and Offermanns 2010). Sponsorship withdrawals and therefore utilized strategies are gaining importance as sponsors have to deal with possible problems following the termination of a sponsorship deal. While the termination might result out of reasonable causes for the sponsoring organisation, it might have unfavourable impacts on a sponsor’s image, as well as on fans attitudes, particularly when the termination is perceived as unjustified.

There is a gap that needs to be addressed, as little interest has been dedicated toward sponsorship deal terminations (Cornwell 2008). Fans who identify themselves with a sports team or the sports club enter into a social alliance with the team (Madrigal 2000). Those individuals with a high level of attachment to a team are likely to support their source of identification (i.e. the sports team) and therefore the organisation or brand that acts in favour of the property, i.e. the sponsor, as well (Gwinner and Swanson 2003, Madrigal 2000, 2001). This relationship between fans and their favourite sport teams’ sponsors can be explained as an “unwritten relationship” which can be harmed if the sponsorship deal is terminated (Woisetschläger, Grohs and Reisinger 2011). Sudden relationship terminations might result from environmental, partner-oriented or relational stresses. Relational stresses are invoked by a “trespass of unwritten relationship rules, breach of trust, failure to keep a promise...” (Fournier 1998) and have a negative effect on attitudes toward the terminator of a relationship. Woisetschläger, Grohs and Reisinger (2011) tested the effects of alternative sponsorship termination strategies in an experimental study. Results revealed negative effects of self-oriented motives for sponsorship termination on consumers’ perception of brand image and purchase intentions. Papies, Knubben and Schnittka (2010) analayzed consumer reactions to sponsorship terminations and found out that exit strategies can have unfavourable effects on the sponsor’s brand image, depending on the corporate situation. Little is known, however, which conditions with regard to the sponsorship relationship itself influence fans’ responses to a sponsorship termination. Therefore, the aim of this thesis is to contribute to research by addressing this issue.

1.2. Aim of the Thesis

This study investigates the effects sponsor initiated sponsorship deal terminations can have on the attitudes of fans toward the sponsor, depending on varying levels of sponsorship duration, fit, dependency on the sponsor and team condition. From the theoretical point of view, this research gives insights into the ability of sponsorship to serve as a proper relationship, where a sports team and highly identified fans enter into a relationship with a sponsor. The study shows similarities between personal, human relationships and sponsorships in terms of important relationship quality factors. Furthermore, the effects a relationship termination can have on attitudes are analysed with regard to personal relationships (attitude of the abandoned partner toward the ex-partner who terminated the relationship). Based on these findings a model is developed and tested empirically how sponsorship terminations impact on the attitude of fans toward the sponsor who terminated the relationship in different conditions. For sponsors, this study provides guidelines what kind of fan reactions to expect from the termination of a sponsorship deal and how to act in advance in order to avoid negative reputation and the exclusion as an important reference partner.

1.3. Structure of the Thesis

Part 2 presents the theoretical framework of the study. Chapter 2.1 addresses the topic of sponsorship with regard to the fan-team-sponsor relationship. The relationship between fan and team is explained in section 2.1.1., the relationship between team and sponsor is explained in section 2.1.2., and the relationship between fan and sponsor is explained in section 2.1.3. Chapter 2.2. is dedicated to sponsorship deal terminations. Section 2.2.1. introduces personal relationship theory, especially regarding relationship development. The second section 2.2.2. discusses the effects of dissolving partner relationships on attitudes. In section 2.2.3. relationship quality factors are introduced and examined with regard to the effect a termination has on attitudes toward the relationship terminator. Section 2.2.4. adapts relationship theory to sponsorship and examines how sponsorship deal terminations affect fan attitudes toward the sponsor in different relationship conditions. Chapter 2.3. shows the resulting hypotheses framework.

Part 3 introduces the empirical study. Chapter 3.1. explains the experimental design, Chapter 3.2. develops the questionnaire and Chapter 3.3. the stimulus material. Chapter 3.4. outlines the data collection process and the analysis of the data. Chapter 3.5. presents the results of testing the proposed hypotheses. Finally, Part 4 contains the summary of the thesis (Chapter 4.1.), the conclusion (Chapter 4.2.) as well as limitations and suggestions for further research (Chapter 4.3.).

2. Theoretical framework

2.1. Sponsorship and the fan-team-sponsor relationship

Understanding the relationship between fan, team and sponsor is the basis to understand how sponsorship deal terminations impact fan attitude. Sport is able to transcend language and cultural boundaries as it includes “a substantial nonverbal component involving universal images of hope, pain and victory” (Farrelly and Quester 2005) that creates strong connections between fans and their favourite sport all over the world. Whenever fans are highly committed to and identified with their favourite sports team, boundaries between them are diminished, inducing an impression of one entity. Sponsorship causes this fusion (of fan and team) to enter into a relationship with the sponsor. This relationship is not merely grounded on simple exchange of resources, but on important relationship quality factors which make it possible to consider the connection as a proper relationship. Within this dyad - as fan and team are perceived as one - not only the team, which is actually sponsored, but also the fan will enter into the relationship with the sponsor. This relation enables an examination and analysis of the impact a relationship termination of sponsor and team, and therefore of sponsor and fan as well, will have on the attitudes of fans toward the sponsor. In this chapter the relationships between fan and team, between team and sponsor and finally, between fan and sponsor will be looked at closely.

2.1.1. Relationship between fan and team

“Sport generates fanship that is more intense, more obtrusive, and more enduring than it is for other forms of entertaining social activities without direct participation in the spectated event” (Zillmann and Paulus 1993). Team identification consists of a fan’s perceived connection to a team and the experience of the team’s failings and achievements as the fan’s own personal success and failure (Ashforth and Mael 1989, Gwinner and Swanson 2003). Team identification, which goes along with a very strong relationship between a highly identified fan and his favourite sports team, can be explained by the concept of social identification and is said to happen in three stages (Abrams and Hogg 1990). The first stage is reached when the individual and the others are recognized as a member of one social group (i.e. it is possible to recognise fans of a certain sports team as belonging to one group according to their jerseys or other fan memorabilia). The second stage is defined by the individuals learning of values, norms and behaviours that are unique to this social group (i.e. learning of subcultural capital of team-related fandom like rituals, symbols, language and important artefacts). The last stage is reached when the individual has successfully adapted those values and norms to himself (i.e. resulting into loyalty to the team and behaviour that is characterised by resistance, persistence and bias cognition) (Funk and James 2001). This results in favourable behaviour toward the source of identification and according to that in an increased receptiveness to other group members’ influence.

To further understand fans psychological connection to sport Funk and James (2001) introduced the Psychological Continuum Model (PCM) (see Figure 1) which provides insight into sport fan involvement and factors that influence the relationship between a fan and a team. It is a framework to understand the psychological connection between an individual and sport. The model consists of four stages which an individual passes through, from initial awareness of a sport or team to allegiance eventually. The four stages are: awareness, attraction, attachment and allegiance, individuals start from stage one to stage four.

illustration not visible in this excerpt

Figure 1: The Psychological Continuum Model (Funk and James 2001).

The last stage “allegiance” represents the peak of the model and is expressive in terms of high fan involvement and loyalty to a team. Loyalty and commitment to a team are reflected by an attitude that is characterised by persistence (attitude persists over time), resistance to change and which influences cognition and behaviour. The attitude towards a team is consistent with values, norms, self-concept and goals, which contribute to a stable evaluation of the relationship with a team (Funk and James 2001). The assumption is that pro-membership actions for which the fan feels responsible become connected to the fan’s self-concept in a way that creates an ambition to continue with such actions and to carry on a positive attitude toward membership (Kelley 1983, p. 302). The more a fan is integrated into behaviours like cheering for the home team, not cheering for the opposing team, wearing the team’s jerseys, the more he is committed toward the team (Madrigal 2000).

Fan identification and being one with the team influences self-esteem (Funk, Haugtvedt and Howard 2000, Hogg and Turner 1985, Tajfel 1978), belief in own competence (Hirt, Zillmann, Erickson and Kennedy 1992, Madrigal 1995) and feelings and knowledge concerning to the team (Wann and Branscombe 1995). Fans with a very high level of attachment support their source of identification (i.e. the team) and they feel a special bond to other fans of the team, which is increasing when special occurrences such as victories, defeats and gatherings are experienced together (Gwinner and Swanson 2003, Madrigal 2000, 2001). This psychological connection represents the extent to which fans view the team as an extension of themselves (Kanter 1972, pp. 65-66, Madrigal 2000, Wann 2006, Wann and Branscombe 1993, 1991). The previously mentioned fan perception of being one with the team was also defined by Mael and Ashforth (1992) who specified group identification as “perceived oneness with or belongingness to an organization”. This “oneness” adapted to sports fandom describes a very close relationship between fan and team, so close that intermediate boundaries between fan and team vanish and an impression of one perceived unity develops.

2.1.2. Relationship between team and sponsor

The original definition of sponsorship is based on exchange theory, and is the process of exchanging sponsor’s cash or in-kind investments in return for the sports team’s resources (Cornwell and Maignan 1998, Meenaghan 1991, Roy and Cornwell 2004). Firms enter into sponsorship relationships for reasons like increasing brand awareness or developing, changing or boosting the brand image (Cornwell and Maignan 1998, Crowley 1991, Gwinner 1997, Gwinner and Eaton 1999, Meenaghan 1991). BDS Sponsorship Ltd. (2011) defines sponsorship as “[…] a business relationship between a provider of funds, resources or services and an individual, event or organization which offers in return rights and association that may be used for commercial advantage in return for the sponsorship investment.” Clearly, this definition summarizes the exchange-based view of sport sponsorship. Cornwell and Maignan (1998) also state that sport sponsorship has often been viewed in research as a two-way transaction.

However, sponsorship is not only a pure, rational exchange of resources between two transaction partners. Sponsorship is a relationship between a sponsor and a sponsee (i.e. a sports team), where the importance lies on the quality of factors that provide the opportunity to create mutual benefit (Cornwell 1995, Harvey 2001, Thwaites 1995). Today, the desire of the sponsor and the sponsored team is to engage in an interdependent relationship with joint investment, commitment, satisfaction and trust in order to achieve mutual benefits and a common meaning (Farrelly and Quester 2005, Farrelly, Quester and Burton 2006). The quality of the relationship between the two partners depends on (and is positively related to) reciprocal benevolence, as well as the effort which is put in commitment, trust, dependence and satisfaction (Agnew, Dove, Le, Korn and Mutso 2010). Nufer and Bühler (2009) consider the sponsorship dyad as a mutually beneficial relationship and state that the amount of lifeblood which is invested into the relationship by both sponsor and team has an effect on the duration and the quality of the relationship. The German soccer club Bayern München and its sponsor Adidas provide an example as their relationship is based on mutual trust and respect for each other, resulting in a very close partnership that has lasted for more than 50 years (Adidas Group 2011).

Cheng and Stotlar (1999) even reconsidered the sponsorship relationship as a durable partnership in terms of a marriage. According to them, marriages, as well as sponsorship relationships require a long-term commitment with the simultaneous goal of both partners to reach mutual satisfaction. The relationship between sponsor and team can be seen as a symbiotic one which builds upon interdependence, where both partners of the sponsorship relationship work together and look after each other. Cheng and Stotlar (1999) demonstrated that suggestions for a successful marriage or relationship have many similarities with suggestions for working sponsorship relationships. They base their analysis on work by Grossman (1982) who indicates four actions, which illustrate - when adapted to sponsorship - that sponsorship can also be viewed as a proper relationship of two partners, sponsor and team.

1. Give your spouse consideration:

The completion of a marriage or sponsorship contract should not be the seen as a securing or backup of the relationship. To secure the relationship properly, it is necessary to serve it properly and invest some extra effort into it. As Howard and Crompton (1995, p. 339) observe, “sometimes all the efforts are directed to securing a sponsorship and little thought is given to serving it.”

2. Flexibility is important when decisions are made that affect your spouse:

Both partners of the sponsorship need to be informed about each other, kept satisfied as well as involved into planning and implementations. Joint production with future projection makes a long-term relationship possible. Coordination of this joint production requires enduring communication between sponsor and sports team in order to make the right decisions and keep a close relationship (Cheng and Stotlar 1999).

3. Involve your spouse in important issues or problems and request ideas and opinions:

By respecting and involving each other as well as sharing knowledge and skills both partners can achieve their objectives (Grossman 1982, p. 79). Teams that provide ideas how to successfully implement the sponsorship and leverage the benefits of their commitment, are involving the sponsor into their decision making process. Sponsor and team can jointly work together and make suggestions to each other in order to make the sponsorship profitable for both partners at best possible conditions. This mutual give-and-take helps to maximise the value of their sponsorship relationship.

4. Trust:

Trust can be achieved by being honest, reliable, credible, and dependable and also by keeping promises (Grossman 1982). According to that, past performances and reputation are good indicators to demonstrate if a partner is trustworthy and someone to rely on. As trust is crucial in a working relationship, sponsor and team need to reinforce their trustworthiness with every action (Cheng and Stotlar 1999). Mutual involvement and provision of information is key to demonstrate respect and reliability (Gray 1998). With regard to sport sponsorship, a partner who cares about the welfare of his other partner seems to possess noble altruistic motives, leading to the establishment of trust (Meenaghan 2001).

2.1.3. Relationship between fan and sponsor

Fans with a high level of attachment are very likely to support their source of identification and therefore the organisation or brand that acts in favour of the property as well (Gwinner and Swanson 2003, Madrigal 2000, 2001). NASCAR (National Association for Stock Car Auto Racing) fans and their favorite drivers represent a good example as Dalakas and Levin (2005) reveal through their interviews with highly identified fans of NASCAR. They found a positive relationship between attitude toward the fans’ favourite drivers and the attitude toward the favourite drivers’ sponsor. Bauer, Exler and Stokburger-Sauer (2008) as well as Lardinoit and Quester (2001) state that highly identified fans are very responsive to sponsorship activities.

The sports team, as the primary source of identification and important piece of the fan’s self-concept, plays a significant role for highly-identified fans. They place a high value on the team and therefore on sponsors that successfully connect to the fan’s source of identification. The sponsor can then “capture a consumer’s share of the heart” and become interlinked with a part of the “consumer’s extended self” (Madrigal 2000). By connecting to a sports team with a large fan base of highly identified fans and through showing benevolent intentions, the sponsor has the opportunity to step into the fans’ inner circle and be considered as one of them. Wann and Branscombe (1995) and Wann and Dolan (1994) demonstrate that highly identified group members have a certain proneness to a relationship with other “in group members” and therefore feel more sympathetic toward them. Highly identified fans maintain positive feelings for each other and to other supporters, especially when they have the feeling that those “others” (like, for example, the sponsor) maintain loyalty to them (through their team) (Fink, Parker, Brett and Higgins 2009).

The sponsor is considered an in-group member that acts in favor of the team and maintains allegiance toward the team. As a consequence of the fused unity of fan and team, not only the team enters into the relationship with the sponsor, the fan also does. Hence, it is also possible to adapt the idea of a proper relationship or marriage between sponsor and team (Cheng and Stotlar 1999) to the connection between sponsor and fan. Sponsors also design messages to fans in order “to establish intimate and emotionally involved relationships with a target audience” (Crompton 2004, p. 270).

To summarize the previous discussion, sponsorship seems to have human characteristics in a way, which makes it possible to argue that the sponsor represents a suitable relationship partner for a team. As for highly identified fans the boundaries between fan and team diminish, both coalesce into one (Mael and Ashforth 1992) and hence constitute one “partner” of the dyad with the sponsor (see Figure 2). Inside of sponsorship as well as within personal relationship dyads, relationship stability, quality and durability develops through significant interactions based on the principle of mutuality and goodwill.

illustration not visible in this excerpt

Figure 2: Relationship dyad between sponsor and team/fan (own illustration).

2.2. Sponsorship deal terminations

Personal as well as sponsorship relationships develop over time through significant interactions between the relationship partners. Usually, healthy and working relationships are based on relationship quality factors, such as trust, mutual understanding and goodwill as well as commitment. Unfortunately, not all relationships endure forever and they fall victim to termination, often induced one-sided. This chapter examines the effects of a relationship termination on the attitudes toward the terminator when it is caused one-sided, depending on differences in relationship quality factors. The discussion focuses on personal relationships first before adapting the findings to sponsorship relationships and to the attitude of fans toward a sponsor that terminated a sponsorship contract.

2.2.1. Relationship development

George Levinger (1983, pp. 320-321) proposed a model of relationship development which describes interpersonal relationships and their dynamics. Relationships do have different stages - a start, a lifetime as well as an end. The model illustrates five different stages in a relationship (see Figure 3).

1. Acquaintance:

Acquaintance relies on several factors such as former relationships, the first impression and awareness of one another. This stage is determined by awareness of the other person. Starting and enduring interactions between two people in order to get to know each other can be the gate to the next stage.

2. Build up:

At this stage trust is developing and people are craving for compatibility and closeness. Mutual understanding und objectives, as well as future goals are determinants for further interaction. This stage does not inevitably need effort and can occur inappreciably.

3. Continuation:

This stage is usually long and stable and is determined through constant growth. It encompasses commitment, trust and mutual investment on both sides and can have different varieties, such as long-term friendship, enchanting relationships as well as marriage.

4. Deterioration:

This stage goes along with trouble, boredom, laziness, discontent, less communication and damage of trust. The partners are drifting apart, sometimes also like the build up phase inappreciably. If there is no cure and problem solving this stage leads to a termination of the relationship.

5. Termination:

The last stage represents the end of a relationship. The relationship can be terminated by separation or by the death of one partner.

Very critical for the development at each stage is intimacy, commitment and trust, but also interdependence and self-other integration. Factors, such as newness, change, excitement, comparison of alternatives and stress aggregation influence the movements from one stage to another.

Figure 3: Relationship development model (own illustration based on Levinger (1983, pp. 320-321)).

illustration not visible in this excerpt

2.2.2. Dissolving partner relationships and the effects on attitude

Marital dissolution and nonmarital romantic break-ups are often described in research as life’s most distressing psychological events (Holmes and Rahe 1967, Kendler, Hettema, Butera, Gardner and Prescott 2003). In their study about relationship dissolution Agnew, Dove, Le, Korn and Mutso (2010) reveal that the higher commitment, love, trust, closeness, interdependence, self-revelation, investments in and duration of the relationship are, the less likely a termination of the relationship will occur. Evidence that these factors are vital for a successful relationship have also been stated by Kelley (1983). Personal relationships which are marked by commitment and love are assumed to be “one of strong, frequent, and diverse interdependence that lasts over a considerable period of time” (Kelley 1983, p. 267). It seems likely, however, that the higher the levels of these factors, the more negative the attitude of one partner toward the other one will be, when this one decides on his own to terminate the relationship.

In her study Fournier (1998) presents two models of relationship deterioration - the stress model and the entropy model. According to the entropy model, relationship terminations result from the failure to properly maintain the relationship, which results in a fading away of the relationship. The stress model relates relationship termination to environmental, partner-oriented or dyadic/relational stresses. Fournier states that breakdowns of committed and close partnerships are better explained by the stress model, where relational stresses are invoked by “trespass of unwritten relationship rules, breach of trust [and] failure to keep a promise” (Fournier 1998).

McLaren, Solomon and Priem (2011) investigate effects of relational turbulences and find that they are positively associated with negative feelings. Also, Brewer and Hewstone (2004) state that people who lose their relationships experience disruption and grief and even anger at the loved one. As break-ups are stressful life situations, they often lead to emotional distress and the experience of “mental confusion, disbelief, apprehension, and a loss of hope for the future” and even opposition (Sbarra and Law 2009).


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How do sponsorship deal terminations affect the attitudes of fans toward the sponsor?
University of Innsbruck  (Institut für Strategisches Management, Marketing und Tourismus Fakultät für Betriebswirtschaft)
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Diplomarbeit zur Erlangung des akademischen Grades eines Magisters der Sozial- und Wirtschaftswissenschaften
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Kim Lea Köpfer (Author), 2012, How do sponsorship deal terminations affect the attitudes of fans toward the sponsor?, Munich, GRIN Verlag,


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