What is a sponsorship agreement?
Sponsorship allows businesses to pay to participate in events or access particular audiences such as potential customers. Association with the theme of an event or the success of a person in their field reflects back on the sponsor.
A sponsored person may be an influencer within their sport, activity or field, and endorsement of the business' products or services can help to raise brand awareness, create loyalty to a brand, and find new customers.
Sponsorship agreements are between two parties: the sponsor who provides the funding, products or services; and the rights holder who provides the sponsorship benefit in return.
A sponsorship contract sets out the rights and obligations of each of them as well as practical matters. They provide a management framework for your sponsorship deal.
What should a sponsorship agreement include?
There is no specific applicable laws regulating sponsorship, so the majority of the content of our documents is commercial and practical rather than legal.
For example, both agreements relating to the sponsorship of events cover:
The sponsorship obligation
the sponsorship fee
payment schedule or delivery schedule
The right holder's obligations (as applicable)
sponsor's rights of access to the venue beforehand for the sponsor to set-up
dedicated parking on the day for the sponsor's guests
provision of corporate hospitality areas
advertising and promotion across different media, including television and radio
product placement around the event venue
use of intellectual property by the sponsor in marketing
preferential event access
right to renew
Similarly, the contract for sponsorship of a person largely covers what each party will provide to the other.
A noncompete clause or exclusivity clause could be included to ensure that the rights holder will not enter into any other sponsor agreement with a similar business or organisation or share benefits that the sponsor alone wants. However, enforcing these types of clauses is difficult. What is competitive can be subjective and only decided by a court, and even if the rights holder is in the wrong, obtaining damages might not be possible.
Instead, we suggest that the sponsor checks whether other agreements are already in place and if so, whether those prohibit what the sponsor wants to achieve. Maintaining a good, responsive relationship that meets each others' needs is usually far better than relying on possible legal retort if other sponsors are seeming to benefit in direct competition.
Using the documents
The documents provide a multitude of examples (easy to delete or change) that we hope provide ideas and opportunities you may not have considered.
The agreements could be used either by the sponsor, or by the event organiser or person being sponsored. Although the templates are fair to both parties, they can be edited to favour one over the other.
An associated area of marketing is merchandising, when intellectual property rights in a product are licensed or sold for exploitation in a different market. An example might be the right to use a sports person’s name on a food product in a certain country. You can find merchandising agreements here.