Sports Sponsorship Agreement Considerations

With sports consistently ranking among the most-watched live programming across all distribution platforms, companies are increasingly directing marketing dollars toward sponsorships that connect their brands with teams and leagues. Some estimates have sports sponsorships growing at an annual rate of almost 8% per year over the next 8 years.

As these investments grow, carefully structured sponsorship agreements become essential to allocating rights, obligations, and risk. For sponsors and the rights holders alike, managing legal, reputational and brand exposure is critical. The role of experienced counsel is to anticipate the broad range of issues and ensuring a broad range of possibilities are considered.

In negotiating sponsorship agreements, a recurring set of issues tends to drive both risk and value, including performance obligations, exclusivity, intellectual property usage, social and digital rights, termination provisions, and the measurement of results. Below we take a closer look at these issues:

Performance Obligations: What's Being Bought ⏤and Delivered?

Clearly defined deliverables are generally a critical element of any sponsorship agreement, covering both sides of the relationship, such as:

• The sponsor, as buyer, pays the sponsorship fees and funds agreed activation, media, and product commitments.
• The rights holder, as seller, delivers the sponsorship assets, which may include signage, hospitality, media inventory, ticket allotments, player appearances, fan engagement opportunities, and content rights.

Rights holders (teams/leagues) tend to focus on delivery standards—timing, frequency and quality standards—negotiating issues such as minimum broadcast exposure, number of events, and player appearances. Sponsors, by contrast, prioritize "make‑goods" and remedies, addressing the remedial benefits they may receive if events are cancelled, postponed or moved (including force majeure scenarios and labor-related disruptions.

Clear language around the priority of remedies—rescheduling, equivalent inventory, fee reduction or termination—benefits both sides. For teams, it is wise to align remedies with operational realities such as league rules, broadcast schedules, player availability and union agreements. In many cases, required league approval of sponsorship deals provides meaningful protection and clarity for teams, and this added "air cover" is often worth the additional review time.

Exclusivity: Protecting Category Value Without Over‑Promising

An effective exclusivity clause can balance a sponsor's expectation of value for the fees paid with a team's broader commercial obligations. In practice, this balance is generally achieved through precise definition of the sponsorship "category," such as applicable product and services, relevant subcategories, and distinctions between house brands and parent companies.

Sponsors typically push for broad exclusivity, while leagues and teams seek to preserve flexibility, often by narrowing the category definition. Key considerations in determining how far the agreed-upon exclusivity extends can include:

• Venue: on‑site signage, pour rights, sampling, and other factors relating to the team's relationship with the venue in which it plays its home games.
• Media: broadcast, digital platforms, team social channels, and email marketing.
• Events: sponsored games, tournaments, and community programs.

Exclusivity carve‑outs, particularly for league‑wide or event‑wide sponsors, legacy partners, and individual endorsement deals with athletes/coaches, also warrant close attention.

As is often the case, exclusivity discussions frequently lead to negotiated remedies for breaches, including notice and cure periods, fee reductions, make-goods, and other agreed adjustments).

Intellectual Property and Content Rights

Both parties are protective of their intellectual property, making precise license grants essential. These grants generally define:

• Covered marks, logos, and creative assets.
• Permitted territories, media, and channels of distribution.
• Duration of use, including pre‑launch and wind‑down periods.

Well-drafted sponsorship agreements also address quality control standards, including brand standards, approval processes, infringement monitoring, and cooperation and enforcement obligations. This often includes approvals for use of league or team marks or athlete names or likenesses.

Ownership of newly created content is another important issue with several moving parts. At a minimum, it is important to consider:

• Ownership of photos, videos and co‑branded materials.
• Scope of future use rights, including post‑term use for "historic" or archival purposes.

Digital and Social Media Activation

Modern sponsorships extend far beyond stadium signage. With the ubiquity of social media and digital marketing, consider clearly defining all digital assets and activation requirements involved in the sponsorship, including:]

• Content deliverables: number and type of posts (static, video, stories, reels).
• Platforms and channels: X, Instagram, TikTok, Facebook, YouTube, team app, website.
• Talent involvement: team accounts, player or coach accounts, and influencer participation.

Negotiation of these provisions may also involve consideration of more intricate details relating to messaging guidelines; approval rights; use of hashtags, tags, links and promo codes; compliance with platform rules and advertising law, including sponsorship disclosure requirements.

Timing and placement are equally important to consider, covering such details as posting windows (e.g., game days, tentpole events), sponsor priority, content conflict management, and take‑down or crisis protocols for problematic posts.

Morality, Conduct and Termination Triggers: Planning for the "Parade of Horribles"

Experienced counsel understands the importance of anticipating worst-case scenarios and negotiating accordingly. In the sponsorship context, this planning is closely tied to morals clauses and the related termination provisions, which are commonly applied to athletes, coaches, team executives, and owners; and in some cases, to sponsor conduct as well (e.g., fraud, harassment, offensive marketing campaigns).

Consider distinguishing termination for cause (e.g., criminal charges, league discipline, or regulatory actions) from termination for convenience (e.g., conduct that triggers public scandal or material reputational harm. Regardless of the approach, these concepts require thoughtful drafting, including clear definitions and/or illustrative examples to guide the parties in the future).

Similarly, termination mechanics such as notice and cure rights (if any) and financial consequences (e.g., pro‑rata adjustments, claw backs and unpaid fees) also need to be considered.

Finally, it is helpful to consider post-termination clean-up following reputational harm. This may include agreed protocols for public relations and transition planning, such as joint statements, removal of signage, digital takedowns or "scrubbing," and re-branding obligations.

Measurement and Reporting: Proving ROI for the Business

Most successful sponsorships are structured with renewal in mind, making early alignment on success metrics essential. Common measures include impressions, engagement, hospitality utilization, website traffic, leads/conversions, and sales lift.

From the team or league perspective, reporting obligations typically drive discussions around the frequency and format of reports, use of third‑party measurement providers, and access to data. Meanwhile, sponsors tend to focus on data rights, including use of fan data collected through activations and digital campaigns, data protection and privacy law compliance, and data sharing limitations.

Mid‑term performance reviews often provide the opportunity to optimize the sponsorship, including reallocation of assets based on performance or adjusting activation strategies. While these conversations may already be happening on the business side, counsel adds significant value by ensuring these mechanisms are clearly reflected in the agreement.

Summary

Effective sponsorship agreements are flexible, measurable, and defensible. The strongest deals reflect experienced counsel on both sides working toward clear, practical agreements that anticipate change—on the field, online, and in public perception.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.