Sports sponsorship agreements are usually an important source of secondary income for professional sports people. In the equestrian sector, sponsorship is often not just a nice bonus, but an essential line of secondary income or costs support for many professional riders.
Sponsorship agreements tend to be drafted in favour of the sponsor, and many professional riders do not seek legal advice on them before signing. Speaking to a lawyer (particularly in relation to a high value sponsorship arrangement) can help to put the relationship on a more even footing. This can be easier where a rider is an established and well known professional, who has more control over the commercial relationship. However, up and coming professional riders should not simply accept onerous terms either (and should bear in mind that there must be a reason sponsorship is being offered – i.e. because their profile has value for the brand). This article considers some key things riders might want to consider when negotiating sponsorship contracts.
There of course needs to be clarity about what commercial support is being offered, usually what products/funding are provided in return for promotion by the rider (and the rider’s specific responsibilities for promotion). However, thought should also be given to the rider’s career progression, especially if a sponsorship contract has a long duration. Should additional funding or support be provided by the sponsor if the rider attends or qualifies for a major event during the period of sponsorship? There will be more benefit for the sponsor being promoted by the rider at a major international event than at a local training show.
What happens if the rider is not happy with the sponsor’s product or service over the course of the agreement? This can happen, for example, if there is a major product malfunction (causing danger to the horse or rider), or, at the other end of the spectrum, the product just changes over time and it no longer works for the rider and their horses. Ideally there would be routes in the sponsorship agreement for the parties to part ways where the rider reasonably loses faith in a product they are otherwise obliged to promote. Similarly, where the agreement does not contain a clear mechanism on this, but the rider is unhappy with the product or service, it is worth a lawyer examining the agreement to consider whether early termination (or some other remedy) might still be available – especially if a major product malfunction has occurred.
Sponsorship agreements often have provisions for the sponsor to withdraw in the event of a professional rider bringing the brand into disrepute or something similar. In a world of social media activity and promotion (which, rather ironically, is often a requirement and obligation of entering into a sponsorship agreement) it can be easy for a professional rider to slip up and do something which the sponsor considers warrants the removal of sponsorship. Much will depend on the terms of the contract, but the rider should be cautious of accepting the sponsor’s interpretation of the terms without question. The terminology can be vague and there may be arguments that the relevant incident does not bring the brand into disrepute, if, for example, there is no actual evidence of loss having occurred.
Riders should also carefully consider exclusivity obligations. It can be risky to tie yourself down to one product for all of your horses, because of course, horses are not machines and the product(s) simply might not work for one or more of them.
Without sponsorship, many professional equestrians would be unable to run their businesses, and often these issues need to be approached sensitively. However, a little thought at the outset can improve the rider’s legal position moving forwards and perhaps even prevent disputes arising. Also, contacting lawyers when you are not happy with a sponsorship arrangement is often worthwhile.
For more information about this article please contact Rory Mac Neice.
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