There are wide variety of companies who utilize SponsorHouse as a means to sponsor athletes and teams. Some have been in the game for years and have their entire program setup with agreements, different tiers of sponsorship ranging from discounts on their products all the way up to financial commitments. This article is geared towards companies who are new to sponsorship and/or seeking advice on how to setup or strengthen their existing sponsorship program.

 

There are a number of common sponsorship levels companies choose from when it comes time to sponsoring athletes and teams. Often times, companies will structure their programs in ways where they have a certain number of sponsorship opportunities for each level. Below is an overview of the most common levels of sponsorship:

-          Product Discount – These are pricing discounts based off retail for qualified athletes to receive on their products. This tier has become very popular as a way for companies to grow their grassroots or amateur programs by supporting athletes and teams with price breaks in exchange for buying and promoting their products.

-          Free Product – Another common form of sponsorship is offering free products to athletes and teams who may be top amateurs or professional in their rankings. Offering products to athletes is a great way to quickly introduce yourself to the marketplace if you have limited exposure.

-          Contingency Bonus – Contingency bonuses are typically a form of monetary or product incentive offered to athletes and teams when they either place well at events or achieve exposure goals for a sponsor. For example, an athlete who wins a high profile event or receives a full-page feature within a national publication might be eligible for a contingency bonus from one or more of their sponsors.

-          Retainer – Any time when a financial commitment is offered by a sponsor this is typically referred to as a retainer. Retainers can be paid one-time, monthly, quarterly or annually. The amount of the retainer can vary greatly depending on the athlete or team and the level of exposure they generate for their sponsors.

 

As with any business relationship it’s important to clearly outline your sponsorship commitments as well as your expectations when it comes to sponsoring an athlete or team. A sponsorship contract or agreement is usually helpful so both parties understand what their responsibilities will include once entered into a sponsorship relationship. Once signed, both parties are obligated to meet the requirements as stated within, otherwise known as the ‘Sponsorship Terms.’

 

Contracts can be used as a tool to help strengthen market share by entering into exclusive agreements with athletes to use and promote your products as well as offer ways to limit your legal exposure for sports marketing.

 

Contracts can have a way of being informal or impersonal when in actuality, it’s the necessary evil of business and sponsorship. It’s always nice touch to include a cover letter that thanks the person for submitting a sponsorship request and to inform them that you would like to offer them a level of sponsorship. 

 

When you click into the ‘Sponsorship Contracts’ area within your SponsorHouse account, you have the ability to add multiple sponsorship offers and contracts to reflect the different levels of sponsorship you have available. This area provides tools and a step by step contract builder to set up multiple sponsorship contracts.

 

Items to include in your offer letter should provide the athlete or team with the following:

-          Information about your company and its products and services. Any background information you can provide about other athletes you sponsor and additional benefits you provide only strengthens your position with the athletes.

-          A summary of the type of sponsorship level being offered –Include a high level summary of the specific deal points before they dig into the fine print of your agreement.

-          Instructions to activate their sponsorship – Examples include mailing in a copy of their contract with a printed signature (this is becoming less common in today’s digital age), specific ordering instructions prior to a specific date if you have inventory control, and any other requirements necessary for the athletes to take the final step to become part of your sponsorship program.

-          Contact information for the sponsorship manager – Who should they follow up with should they have any questions?

 

Sponsorship contracts can range from a half page basic agreement to an in depth 25 page legal document with every clause and provision imaginable. Which is best for your sponsorship agreement? It really depends on the complexity of your sponsorship level, its terms, your potential legal liability or exposure and the requirements being placed upon the athlete or team being offered sponsorship.

 

Important areas that should be components of your sponsorship contract include:

-          Term or Duration: January 1, 2008 – December 31, 2008

-          Detailed terms of the sponsorship offer level, for example:

o   30% discount off retail pricing on all available products

o   $1,000 signing bonus payable within thirty (30) days

o   $1,000 product allotment based on MSRP (manufacturer suggested retail price)

-          Terms of payment or allocation of sponsorship

o   $100 per month for twelve (12) months

-          Your requirements in exchange for offered sponsorship, such as:

o   Athlete will display, promote and list ‘Company’ as an official sponsor at any and all attended events and appearances

o   Athlete will make four (4) personal appearances per year at locations specified by sponsor

o   Team will provide six (6) 3’ X 10’ signs on arena walls

-          Termination Provision – How does either party terminate the agreement (if applicable).

-          Assumption of Risk and General Release of Liability

o   This is especially important for any sports related activity and athletes themselves. You understand the person you sponsor participates.  You sponsored the person to associate yourself with their activity, but you don’t require the person to participate and will not be held liable for serious, life-threatening injuries or death.

 

The final step of the process is executing the contract. This can only be done when both parties sign and accept the terms of the contract. SponsorHouse provides an online system for delivering contracts and obtaining digital signatures from the athletes and teams you sponsor. It’s a highly effective and efficient way to execute your contracts online.

 

Your sponsorship offers and contracts are secure with no ability for athletes and teams to alter its terms. This way you can confidently distribute your sponsorship offers and receive executed agreements online with no delays. To utilize the ‘Digital Signature’ option, choose this selection when setting up your sponsorship contracts inside your account on SponsorHouse.

 

For an example of a general sponsorship contract, please view the ‘Sample Contract’ within the resource section. Again, please consult professional legal advice before entering into any sponsorship contract.

Go back to the Sponsor Resources