Level Playing Field | Sponsorship agreements in Sport: Key terms, common pitfalls, and what to get right

So Sarah, let's start with the basics then.

What actually is a sponsorship agreement and what are the key building blocks that go into one?

At its core, a sponsorship agreement is the contract that governs the commercial relationship between, in this instance, a sport, whether that's a national governing body, a club... a league or potentially a specific sporting event and then a commercial partner who wants to be associated with it.

The brand pays money or sometimes provides goods or services in kind and in return for that the sport grants them access to its commercial property.

That could be its competitions, its branding, its athletes, its platforms and its fan base.

The sponsorship agreement is the document that defines exactly what that access looks like.

And it's doing quite a lot of heavy lifting because that whole commercial relationship lives and dies by what's actually written in it.

The first thing to nail down is what rights are actually being granted.

And that sounds obvious, but it's one of the most common sources of dispute that we find.

So it can be that gets negotiated at a very high level.

There's a handshake on the headline numbers category and the detail of the agreement is actually fairly vague in describing the benefits that both parties potentially read and interpret in a slightly different way.

so often the sport thinks it's promising logo placement on its website home page perhaps the sponsor thinks they're getting prominent placement across every digital platform maybe including social media match day app things like that neither party's being unreasonable it just never got to the specific level that actually was required for the deal sports I find often want to retain flexibility in how they deliver the benefits because of course events evolve, platforms change and locking in a really prescriptive obligation up front can be problematic and that's a fair concern.

Multi-year deals signed today might need to actually accommodate new platforms.

format changes to a competition, or potentially a shift in how fans are engaging so that there is proper engagement and value being delivered to the sponsor.

So there can be genuine tension here between flexibility on the one hand and certainty on the other.

That's right.

And the answer isn't necessarily that you have to choose one or the other.

It's really about being deliberate about where you build in that flexibility and where you don't.

So the core value exchange needs to be very clearly defined.

But around the edges, you can build in mechanisms for flex and adjustment.

Things like review clauses, equivalent value substitutes.

if a particular benefit can't be delivered for a range of reasons, or relationship managers who agree activation details each season or on a per-activation basis.

What's dangerous is really leaving the core rights package as a vague description in a schedule at the back of an agreement and assuming that goodwill built off an existing relationship or a relationship that's been in place for a number of years will fill in those gaps.

So I think the message there is detail is good and building in some flexibility is what we think is a must have.