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Sponsorship Agreements

We have experience in advising sports clubs and players. An important area is sponsorship of the player. When sponsoring a player there are many considerations when drawing up a sponsorship agreement for both the sponsor and the player. Below is an overview of some of the key considerations:

The Sponsor:   EXCLUSIVITY

When sponsoring a player getting exclusive sponsor rights will enable the most exposure for the sponsor. Any of the sponsor’s logos etc. on the player’s clothing or equipment will be the only one present, meaning it will not get lost amongst a number of logos. Exclusivity on a players’ clothing may be difficult as a team may have several sponsors together with the kits’ manufacturers’ name. Therefore in such situations it is important that any agreement with the club and the player clearly sets out where the sponsor’s logo is to feature for example in cricket it is not unusual for a sponsor to want its logo to feature on the lead arm of a bowler/batsman. Similarly, the sponsor may want to stipulate where its logo is to feature on the back of a player’s cricket bat.

PROMOTION AND ADVERTISING

A sponsor will want to consider if they want the player to be involved in advertising and promotions of their products/services.

USE OF THE SPONSOR’S PRODUCTS

A sponsor could seek to restrict the player to only use their products for the term of the contract.

LEVEL OF EXPOSURE

Within the sponsorship agreement the sponsor can seek to specify a set level of exposure of their business. This could be setting a number of events within a year that the player should attend to promote their products.

 

TERM, TERMINATION AND A RIGHT TO RENEW

The sponsor will want to carefully consider the term of the agreement to ensure that it is for a sufficient length of time that the player will be able to promote their business effectively. A termination clause will also be necessary so as to protect the sponsor from being connected with the player’s bad behaviour that could tarnish the image of the brand. The recent cases of Maria Sharapova and Ryan Lochte are examples. The sponsor may also wish to include a right to renew clause. This would enable the sponsor to renew the agreement where the sponsorship has been beneficial to the sponsor.

The Player:

SPONSORSHIP FEE

This will likely be the main consideration for the player. The sponsorship agreement should clearly set out the ‘fee’ the sponsor is to pay to the player. This may not only be monetary. The sponsorship agreement may also include as part of the ‘fee’, items such as, sports equipment. If this is the case the agreement will need to be specific as to what the equipment is, and to what value it is to amount to.

POTENTIAL FOR TERMINATION

The player will need to be very conscious of the terms of any termination clause in the agreement. It is likely that a sponsor will press for a termination clause to include a right to terminate when anything that may link the sponsor to ‘bad press’ because of the actions of the player, such as a doping scandal. 

USE OF THE SPONSOR’S PRODUCTS

A player will also need to carefully consider any restrictions and exclusivity in regard to certain products. The sponsor may seek to include clauses which bind the player to only use their products. A player should try to resist a blanket restriction.

OBLIGATION TO ATTEND/SUPPORT SPONSOR’S EVENTS

The sponsor will possibly also seek to ensure that the player is legally obliged to attend events during the term of the sponsorship agreement. These clauses should be carefully considered so as not to overly burden the player in having to attend the events, but also what may be involved.

Sponsorship agreements are highly complex documents. They must be considered carefully with both parties seeking legal advice before they are entered into. Our Sports Law team has the expertise to advise on any sponsorship agreement.

 

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