Writing and using a sponsorship agreement

If you've ever watched a baseball game, you've undoubtedly seen numerous corporate logos throughout the ballpark, both throughout the arena and even as the name of the stadium itself. These logos are just one example of corporate sponsorship, which is also known as event marketing or cause marketing, particularly when a charity or nonprofit organization is involved.

Sponsorship defined

Sponsorship is a marketing tool that, when properly conducted, connects a particular team with a specific product in the mind of the public. For example, when you think of the NFL, you might think of a particular brand of beer or soda. Sponsorship works well because the sponsor helps the promoting organization, or sponsee, pay the high cost of maintaining venues and paying player's salaries. In turn, the sponsor benefits by gaining exposure and, possibly, loyalty from spectators.

Promotion of the sponsors' logos isn't the same as advertising, although the logos certainly help publicize the companies' products or services. Instead, a sponsor enjoys a more important relationship with the promoting organization in that it pays top dollar in exchange for promoting its own product, improving its image, and creating public awareness of its brand.

Sponsorship agreements

For businesses of any size, sponsorship makes sense if you can align your product to an event that matches your demographic. In addition to sporting events, sponsors are also found at concerts, fundraisers, and other types of events. An example of sponsorship that works well is promoting a brand of hot dogs at a baseball game. Not only are hot dogs associated with baseball, but fans are likely to grill hot dogs at tailgates or home viewing parties.

Whether you're the sponsor or sponsee, you should put your sponsorship agreement in writing to protect yourself in case there's a dispute.

Contents of a sponsorship agreement

Each sponsorship agreement differs depending on the product that's promoted, but there is basic language that each agreement should contain. Some of the most important information to include is:

1. The date the parties enter into the agreement, written at the top of the document
2. The names of the sponsor and sponsee, including their addresses
3. The date the agreement starts and ends, along with the right of renewal, if applicable
4. The amount of compensation the sponsor agrees to pay in exchange for the right to display its logo within the event arena and any other allowable promotional materials, such as fliers or merchandise
5. That the sponsee shall actively promote the sponsor, including the manner in which it will do so
6. That both the sponsee and the sponsor have the right to use each other's logos and intellectual property, including trademarked items, to show the sponsor's connection to the sponsee; or that only the sponsee has the right to use the sponsor's logo and intellectual property, and not vice versa
7. How the sponsor will pay the promoter, which can include details about dates, amounts, and methods of installment payments
8. Whether the sponsor is providing any of its products to the sponsee and, if so, which and how many products the sponsor is providing
9. That the parties are independent contractors and not partners, employer-employee, or joint venturers
10. A noncompete clause, stating that no competing product in the same market as the sponsor shall be used by the sponsee (e.g., the sponsee will not promote any other brand of hot dogs)
11. That neither company shall speak in a derogatory manner about the other company
12. Which state's law the agreement shall be governed by (generally the party who prepares the contract picks the state)
13. That this agreement constitutes the entire agreement between the parties and any oral representations are not part of this agreement
14. Signatures and titles of an officer of each company

If your company wants to become a sponsor or bring a sponsor on board, you can do so by creating your own sponsorship agreement. There is other information you can include, but the above are the most basic clauses in such a contract. To ensure your agreement contains the proper language, you can have an online service provider prepare a comprehensive sponsorship agreement for you.