Five Considerations for Sports Sponsorships

March 20, 2024    

During a session at an ANA Advertising Law 1-Day Conference, veteran lawyers drew listeners' attention to some factors that demand consideration when evaluating sports sponsorship agreements.

Key Takeaways

Some of the guidance that the panel offered included the following tips:

1. Guard exclusivity as much as possible. A sponsored partner may try to establish agreements with many brands that all appear to be in the same broad category. A purified water brand, for instance, could find itself partners with a stadium that also has agreements with a distilled water brand, an artesian water brand, a spring water brand, a mineral water brand, and an alkaline water brand, deeming them all members of distinct categories. Consider the possibility of such a scenario when hammering out the language of your agreement.
2. Keep in mind the implications of "subordination" contexts. If you are sponsoring a team or individual sports venue, be aware that the league's sponsorship agreements will take precedence over your own in cases in which games are nationally televised, meaning that in such cases, a league sponsor's logo may replace your own on hoop stanchions, baselines, etc. You may also find your own brand presence subordinated when a musical tour that is sponsored by another brand performs in the venue.
3. Weigh the implications of a force majeure clause. A team, league, or venue may seek to insert such a clause to indemnify itself against potential situations that would prevent them from playing or televising games (such as occurred during the pandemic).
4. Consider a morals clause. Sports teams and executives are high-profile people who aren't always on their best behavior, which can reflect negatively on you as a sponsor, making a morals clause worth considering (though many sports organizations refuse such arrangements out of hand).
5. Examine the potential benefits of a jersey patch sponsorship. These can be even more valuable than in-stadium signage as they offer visibility on TV, even if no one is in the stadium to view the game in person (as was the case during the pandemic). Depending on the league, some of the patch-positions on jerseys may be controlled and sold by the league or by the individual team.

CLE Materials

• Session Presentation
• Betting on Gambling: How Professional Sports Leagues Could Increase Revenues Following Murphy v. NCAA
• Corporate Sponsorships of Sports and Entertainment Events: Considerations in Drafing a Sponsorship Management Agreement
• How to Protect the Exclusivity in Your Brand's Sponsorship

Source

"Legal Trends in Sports Marketing." Daniel Render, partner at Katten Muchin Rosenman LLP; Jeff Gewirtz, EVP, business affairs and chief legal officer at BSE Global. ANA Advertising Law 1-Day Conference, 3/20/24.