What drives renewal of sponsorship principal/agent relationships?

Abstract

The relationship between advertising agencies and their clients has been the subject of some research, including studies conceptualizing it from an agency theory perspective. The increasingly important relationship between sports (or art) properties and their sponsors, on the other hand, while recognized as crucial for the long-term success of the sponsorship agreement, has remained shrouded in mystery, with little or no research aiming to establish and understand the antecedent of sponsorship renewal. This article reports on an exploratory dyadic study examining the effects of market orientation, trust, and commitment on the principal's willingness to renew the sponsorship relationship. The leading sponsorship property in Australia, the Australian Football League (AFL), and its major sponsors provided the empirical context for this study.