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11th March 2019

What to look out for in event sponsorship agreements

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Large sporting events need funding and an efficient and commercial way to secure this is through sponsors. If a sponsorship agreement is drafted well it will provide benefits to both parties; the sponsor will have the opportunity to promote its brand/products to a potentially new audience and the party being sponsored will receive a funding injection to use either directly for the event or indirectly for other areas where funds are required.

Some of the key issues to look out for in sponsorship agreements include IP rights, and significantly, who owns the rights to logos created for the event. If the sponsor has designed the logos for an event, it would normally own the rights to these logos. This could create unnecessary risks for the other party in the future, as the sponsor would be free to exploit its rights in the logos, even after the sponsorship relationship had come to an end. It is therefore prudent to include some careful drafting to limit such risks.

Equally, the question of the division of rights and exclusivity should be clearly set out in the agreement. It is important to have a firm understanding of the rights that will be granted to the sponsor. For example, whether the sponsor should be allowed to sell its products/services at the event, and if so, whether (or how large) a commission from these sales should go to the sponsored party.

Lastly, it is still unclear what impact Brexit (the elephant in the room for many commercial relationships) will have on sponsorship agreements. It will nevertheless be wise to keep in mind that the UK's exit may have an impact on surrounding legislation relating to sponsorship, and to keep up to date on this.

For more information on entering into sponsorship agreements please get in touch with Ben Moorhead on 020 7400 6578, or click here to email Ben.