How Do I Structure an Athlete Sponsorship Agreement in NZ?

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Table of Contents

• What is an Athlete Sponsorship Agreement?
• Key Clauses to Include in Your Athlete Sponsorship Agreement
• Key Takeaways
• Frequently Asked Questions

Are you an athlete looking for sponsorship? If so, ensure you form a legally binding athlete sponsorship agreement with your sponsor. A legally binding agreement will make sure your sponsor upholds their side of the bargain. If they do not uphold their obligations under the agreement, you can sue them for damages. However, you will only be successful if you include the correct terms in your agreement. This article will explain how to structure an athlete sponsorship agreement. 

What is an Athlete Sponsorship Agreement?

An athlete sponsorship agreement is a contract that will govern the relationship between a sponsor and an athlete. The sponsor will exchange money for the athlete to display their branding. An athlete usually completes this by wearing branded clothing or endorsing the sponsor on social media. An athlete sponsorship agreement works the same way as any other contract since both parties benefit from the transaction.

Key Clauses to Include in Your Athlete Sponsorship Agreement

Benefits 

The main clause in any athlete sponsorship agreement is the benefits that each party receives. This clause should clearly outline what the athlete will get and what the sponsor will receive in return. This clause is essential because it is usually the basis for disputes as there can be ambiguity in the terms.

An example of a benefit may be that the athlete receives merchandise from the sponsor for promotion on the athlete’s social media. The benefits clause should contain a detailed description of precisely what merchandise the sponsor will provide and how many social media posts the athlete needs to make. The athlete must also make sure to label the post as an advertisement. 

Exclusivity of the Athlete

Another critical term to include in your athlete sponsorship agreement is a term that relates to exclusivity. This means that the clause will outline whether the athlete can sign sponsorship agreements with other brands.

It will also outline whether the athlete can wear merchandise from other brands in public. For example, a football player may only wear boots from the brand with which he signed the sponsorship agreement. The exclusivity clause is important for sponsors, as having an athlete exclusive to their brand becomes part of the deal.

If you are an athlete, you must follow the exclusivity clause. Otherwise, you could be in breach of the contract. This means you could be liable for damages, and the sponsor can terminate the agreement.  

Intellectual Property Considerations

Another important clause you should include in your athlete sponsorship agreement is a term relating to intellectual property. For example, you are likely licencing an athlete to market your brand. Therefore, there must be regulation as to how the athlete uses that brand. For example, you do not want your athlete marketing your brand whilst doing something that undermines your business.

An intellectual property clause can clearly state when the athlete can market the brand and how they can use it. In addition, it can regulate what platforms the athlete can use for marketing the brand and what demographic the brand is targeting. 

Termination Clause

A further clause that is present in most contracts is the termination clause. The termination clause allows either party to cancel the contract if either party does not follow the terms of the agreement. When a party cancels an agreement, each party is free from any obligations they previously had under the contract.

An example where a termination clause may become useful is if your athlete does something irresponsible that could bring your brand into disrepute. In this case, you will be able to terminate your agreement. This is a common occurrence and helps businesses stay protected. In addition, it is useful to note that you can apply for compensation in court if you suffer loss because your athlete has breached the contract. 

Key Takeaways

Athlete sponsorship agreements are useful to govern the relationship between an athlete and a sponsor. An agreement clearly outlines what the athlete and sponsor’s rights and obligations are. However, an agreement is only as good as the terms that it contains, so it must be well structured to include relevant clauses. These include a benefits clause, exclusivity clause, intellectual property considerations, and a termination clause. 

For legal assistance with sponsorship agreements, contact LegalVision’s contract lawyers on 0800 005 570 or fill out the form on this page.

Frequently Asked Questions