Sporting Event Sponsorship Agreement
Many issues remain unanswered and the way in which sports sponsorship is concerned is particularly important. Sponsors are an important player in the sports sector in Spain and the United States. Therefore, their decision to act will certainly have an impact on the future of the sports industry in the short to medium term, as these revenues are economically important for events, teams and athletes. Regardless of the country, sport or size of the competition (national or international), the last three months have seen a continuous postponement of temporary postponements or total cancellations of leagues, competitions and other events. There is no doubt that the impact of Covid-19 in the sports industry is enormous from a social and economic point of view in the United States and Spain. For amateur teams and Premier events, these restrictions affect ticket sales, media broadcasting and fan engagement, all of which depend on sports activities, including sponsorship agreements. As part of a sponsorship agreement, the parties may manage these risks and uncertainties and value the agreement by adopting a more collaborative contractual model whereby the parties share the burden of coronavirus risk. This approach could have advantages that more traditional risk allocation methods may not be able to offer in the current circumstances. There is no one-size-fits-all approach, but the parties should consider as a starting point the following elements in order to create a mutually beneficial relationship: from a contractual point of view, regardless of the scenario or jurisdiction faced by the sponsor or sponsored jurisdiction, any further extension or modification of the sponsorship contract must be well documented in order to avoid any possible claim in the event of non-performance. Provisions such as alternative remedies, redundancies or deferrals or mechanisms for adjusting sponsorship fees should be negotiated.
In addition, the verification and consultation of the applicable law of the agreement is of the utmost importance, given the scope. B force majeure or liability for infringement may vary from jurisdiction to jurisdiction because of the criteria of judges (i.e. national jurisprudence). In this landscape, a rights holder will always be interested in entering into new contracts and safeguarding future revenue streams. A sponsor will strive to protect its investment and ensure that it can use sponsorship opportunities with the confidence that the risks associated with the coronavirus pandemic will be adequately managed to provide optimal value for money. To do so, parties need to consider more creative contractual measures to regulate the agreement and structure operations so that they are agile and safer. The pandemic has changed the risk profile of sponsorship contracts. The cancellation of an event would have been a risk in any sponsorship agreement, but at that time it would be more likely, especially with a second wave of viruses on us and the prospect of other “waves” that will follow – with locking restrictions – until a vaccine is found and a vaccination program is put in place.