Sports Sponsorship Agreement

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Sports Sponsorship Agreement

Brief Introduction About the Sports Sponsorship Agreement

A sports sponsorship agreement is an agreement that governs the relationship between the sponsor and the individual sports personality or team of sport members being sponsored. The sponsored person gets several benefits based on the sponsorship agreement but has to follow certain conditions of the contract. There are several types of sport sponsorship agreements, such as sponsorship of individual sporting teams, sponsorship of governing bodies, sponsorship of events, and sponsorship of sportsmen and women.

Who takes the Sports Sponsorship Agreement?

People involved in the agreement are the corporate sponsor and the individual sports personality or sports team. As already said, there are several types of sponsorship agreements in sports in which one has to understand the difference between a principal and a subsidiary agreement. A principal sponsorship agreement means that the company or sponsor will place the sponsor’s logo or name on the front of the team’s shirts. But a subsidiary sponsors will market their brand name and logo on the sides of the playing grounds.

Purpose of a Sports Sponsorship Agreement

In some cases, the sponsor will provide some informal agreement to the sponsored person when it is for a short period of sponsorship. However, for long-term sponsorship, it is necessary to build a sponsorship contract between the sponsor and the sponsored person. Such a contract helps to keep up the interests of both the sponsor and the sports individual and also defines the limits of both parties.

The Sponsorship agreement will help protect the interests of both the sponsor and the sponsored person. The contract also allows the sponsorship relationship with the sports individual when any negative impression happens.

Contents of the Sports Sponsorship Agreement

The agreement should be written formally with the help of an experienced attorney and thus refer to the sample sponsorship contract. Such a written agreement includes the terms and conditions accepted by both parties of the contract to avoid any dispute in the future. In a sponsorship agreement for an individual sports player, the sponsor has the right to terminate the contract when they find the behavior of the sponsored individual might damage the reputation of the sponsor or the company.

A Sponsor can terminate the contract when they find the sports personality involved in other illegal activities such as gambling, etc. which will ruin the family image of the company sponsoring them. A written agreement mentions some of the expectations, consequences of violating the agreement, etc.

The agreement includes the various key elements such as identification of the parties, obligations of the sponsor or company, obligation of the sponsored sports individual, mutual obligations, compensation, confidentiality clauses, violation of the agreement rules, and termination of the agreement, warranties, etc.

The sports sponsorship agreement provides certain benefits to the sponsored individual. A sponsor provides his company products to be used by the sponsored individual free. Thus, a sponsored individual gets several benefits from the sponsor or company.

How to Draft the Sports Sponsorship Agreement?

While drafting the agreement, one has to include certain factors in every sponsorship agreement. The first thing is the explanation of benefits that the sponsor will get through this contract, differences in the benefits based on the period of your contract particularly when it is a long-term contract, payments, and variations in the payments again based on period of your contract, trademark issues, and the rights of the sponsor to terminate the agreement.

Other common things include on what date the parties agree to enter the contract, names of the sponsor and sponsee along with their addresses, etc. To draft the agreement, you can refer to the sample sponsorship contract available over the internet.

Negotiation Strategy

Check whether you are getting better deals from the sponsor and negotiate value-added elements into your sponsorship package. One can consult an experienced attorney to make negotiations in a better way.

Benefits & Drawbacks of the Sports Sponsorship Agreement:

Pros:

  • While contracting with celebrities to endorse a company’s brand, the company enjoys the benefit of recognition by attaching the celebrity’s name in the brand. This increases awareness of the company’s brand name
  • Sports Sponsorship contract helps to transfer the positive image of any corporate companies and the fans of the sponsored individual buy the sports property as well
  • Sports sponsorship contract helped many companies to broaden their network by acting as a platform
  • Sports sponsorship helps to increase the credibility and reputation of a particular sport property
  • The contract helps to build goodwill on the company’s brand and thereby generates positive publicity

Cons:

  • When you look into any athlete sponsorship contract template, you will notice that there will be an overwhelming influence from sponsors
  • Some sponsors force on changing the rules of the sport by thinking it will boost the viewership

What Happens in Case of Violation?

Many problems will arise following the sponsorship contract that includes ambush marketing and issues between sponsor and sponsee. Though the contract mentions all the important things to avoid any disputes in the future, there is still a chance for issues, and thus, either sponsor or sponsee will terminate the agreement. The Sponsor has the right to terminate the sponsee when he/she the sponsee is not following the terms and conditions of the contract.

But when the sponsee breaches the agreement, then the sponsor has the right to impose fines or withhold payment or even include other terms where the sports individual has to repay the sponsorship amount to the sponsor itself. Thus, it is essential for the sponsor to include the necessary terms in the contract and can refer to the athletic contract template examples.

Thus, an agreement provides mutual benefits to both the sponsor and the sponsee. But sponsored individual or team should look into the contract before signing it, whether it includes more limitations relating to their stuff. Even commercial factor plays a huge role in the sponsorship agreements, and hence, it is better to make a good sponsorship contract with the help of a legal attorney experienced in the field of the sports field.