Important Considerations for a Potential Sponsor Entering a Sponsorship Contract

Sports sponsorship offers a wide range of commercial rights and opportunities to businesses and companies seeking to embrace the marketing capabilities of entering into a sponsorship agreement. For any business considering sponsoring an event or sports body here are a 10   tips  you cannot ignore: 

  1. What are the rights being granted in return for the sponsorship? These need to be set out as clearly as possible with little or no room (if possible) left for misinterpretation.
  2. Exclusivity v non-exclusivity. The last thing a sponsor wants to find out is that after handing over a large sum of money to sponsor an athlete/team/event/stadium is that a rival company is also a sponsor of the same athlete/team/event/stadium.
  3. What are the obligations of the sponsored party going to be? These need to be set out clearly so that a sponsor can maximise the return on the objective behind their decision to enter the sponsorship contract in the first instance.
  4. Duration of the sponsorship contract. This should be agreed and set out clearly in the agreement being entered into.
  5. Renewal options for the sponsor. Ideally, the sponsor should seek to include a renewal option in the agreement so that if the sponsorship is working well, the sponsor will have an option to renew the agreement for another period to be agreed between the parties.
  6. Termination provisions. The sponsor will need an exit mechanism if the sponsored party is not holding up their end of the sponsorship agreement. The exit mechanism should be set out clearly in the agreement so that the sponsor can get out of the agreement with as little fuss as possible.
  7. Post termination arrangements and restrictions. Consideration should be given to whether any rights will be given to the use of certain Intellectual Property such as logos etc. If this is to be the case then the sponsorship agreement should provide for how these rights are to be treated on the termination of the agreement.
  8. Governing Law and Jurisdiction. The sponsor will ideally want the governing law and jurisdiction of the contract to be wherever the sponsor is situated. This should be specifically stated in the agreement for the avoidance of any doubt.
  9. Dispute resolution process. The sponsor should insist on the inclusion of a dispute resolution clause in the contract. This will save the sponsor and the sponsored party from having any dispute they may have being aired in the public forum of the courts.
  10. Disaster recovery. Be sure to have a damage control plan in place should the sponsored party behave in a way that might damage the reputation of the sponsor.

Contact Gavin Bluett for more information.


This publication is for guidance purposes only. It does not constitute legal or professional advice. No liability is accepted by Ogier Leman for any action taken or not taken in reliance on the information set out in this publication. Professional or legal advice should be obtained before taking or refraining from any action as a result of the contents of this publication. Any and all information is subject to change.

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