Sponsorship. Sponsorships. Sponsors.

Sponsorships have become a very common way to fund events. While sporting events are best known for the use of sponsorships, other events involving the arts, charities, as well as other venues and products also rely on funding from corporate sponsorship. It is important to remember that sponsorship deals are not exclusively between giant corporations and huge national or international events. Events in small communities often rely on sponsorships from local small businesses.
Whether you are considering sponsoring an event or you are looking for sponsors, it is extremely important to understand exactly what you are getting into. Deirdre Kilroy, recognized as one of Ireland’s leading legal experts in technology law, data protection and commercial contracts advises that there are three main points to consider in regards to a sponsorship relationship:

  1. Key objectives of sponsorship
  2. Branding and naming rights
  3. Risk to reputation

Within these points are issues such as exclusivity, branding and naming rights, trademark protection, use of materials such as photos and other media from the event and access to event participants. The contracts need to be clear and both parties should be straightforward as to what they expect from the relationship.
There are many concerns in a sponsorship deal for both the sponsor and the sponsored party, not least of which is the reputation of both parties, which in essence, become linked by the sponsorship agreement. The sponsorship letter is often the first document, which provides introductory information to potential sponsors about what they can expect.  Honesty about who you are and what you bring to the table is essential.  Case in point: In April of this year, the United States Postal Service filed court documents in its case against disgraced cyclist Lance Armstrong whose cycling team received millions in sponsorship dollars while admittedly cheating to win numerous cycling tournaments, including the Tour de France.
In 2009 famous UK football club Manchester United lost its sponsor, AIG, when the company was pressured to end the relationship after it received a record setting taxpayer bailout of $150 billion dollars. The end of this sponsorship cost Manchester United $19 million per season.
Although sponsorship deals can be very beneficial for both parties involved, there are risks associated with the unpredictability of the marketplace. Seeking professional legal advice before going forward with a sponsorship deal is the best way to make the relationship fair and beneficial to all parties involved.
I’m Attorney Francine Ward, a believer in action, not talk. What do you think? Join the conversation on my Facebook Fan Page, my Twitter page, or in one of my LinkedIn Groups.

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