What is meant by a sponsorship agreement?
A sponsorship agreement or contract governs the legal relationship between a sponsor and the individual whom is entitled to enforce the sponsorship obligation. That individual may for example be an individual who is sponsored such as an individual athlete, an event organiser of an event which attracts sponsorship or the owner of a location that is being sponsored.
Sponsorship agreements in sport
What are the common kinds of sponsorship agreements involved with sport?
Sponsorship within sport is big business and consequently there are many avenues by which a company can get their product name seen by many potential customers. The kinds of sponsorship in sport are as follows:
Sponsorship of individual sporting teams – often this will mean that the name of a company appears on the front of the team shirt. This will be the principal sponsorship agreement for a particular sporting team but there will also be subsidiary sponsorship agreements in place. For example billboards around the side of the pitch will often contain the names of companies who have sponsorship agreements in place with the individual team.
Sponsorship of governing bodies – often companies will become a sponsor of a governing body of a sport. For example Adidas is a sponsor of the world governing body of football – FIFA. This means that all FIFA clothing will be made by Adidas as well as their logo appearing on promotional material.
Sponsorship of events – at this summers World Cup the already existing FIFA sponsors will also be present as will the companies who are sponsoring the event. This means that all billboards surrounding the pitch will display the names of the various sponsors as will any promotional material associated with the event.
Sponsorship of sportsmen and women – often the individuals involved within the sport will attract different kinds of sponsorship. Most commonly a sponsor of an individual footballer will provide that player with his sports equipment such as football boots – his so called tools of the trade.
What should be contained within a sponsorship agreement?
Written formal agreement
- Often sponsorship agreements are concluded on an informal basis such as when a company agrees to sponsor their local football team for a short period such as one or two matches. In top class sport however a formal agreement must be established in order to protect both the interests of the sponsor and the other party.
For an individual player if there is a sponsorship agreement in place it is easier to know the full extent of the sponsors payment and other obligations under the contract. In certain cases it may be necessary for the sponsor to wish to terminate the contract whereby the behaviour of the individual being sponsored could lead to damage the reputation of the sponsor. This is particularly important when an individual sportsman may be involved in a scandal away from the sporting arena which could ruin the family image of a certain brand which may be sponsoring them.
For more information on:
- Trademark Usage
- Products Provided by the Sponsor
- Issues arising out of sponsorship agreements
- Exclusivity of Contracts
- Is this legal?
- Entitlement to renew the contract
- What was decided in this case?