Sports sponsorship agreements sit at the intersection of commerce, branding, and reputation. Whether the deal involves an elite athlete, a sports team, an event, or a grassroots academy, sponsorship contracts are high-value arrangements where expectations are commercial, public-facing, and time-sensitive.
Yet, many sponsorship disputes do not arise because parties act in bad faith but because agreements are poorly drafted, vague, or silent on critical issues. This article examines the key clauses every sports sponsorship agreement must include, and explains why disputes commonly arise when these clauses are missing or inadequately framed.
1. Parties and Scope of Sponsorship
Why it matters
The agreement must clearly identify:
- The sponsor
- The sponsored party (athlete, team, federation, or event organiser)
- Any affiliated entities included in the deal
It should also define what exactly is being sponsored, an individual athlete, a season, a tournament, or a specific campaign.
Why disputes arise
Disputes occur when:
- Sponsorship is assumed to extend to affiliated teams, leagues, or future seasons
- Athletes change teams or governing bodies
- Rights are assumed but not contractually granted
Ambiguity in scope leads to overreach and unmet expectations.
2. Sponsorship Rights and Benefits
Why it matters
This clause defines what the sponsor receives in return for its investment, such as:
- Logo placement (kits, equipment, venues)
- Media appearances and endorsements
- Social media promotions
- Naming rights
- Hospitality and tickets
Each right should be specific, measurable, and time-bound.
Why disputes arise
Common triggers include:
- Vague language like “reasonable exposure” or “adequate promotion”
- Lack of minimum deliverables (number of posts, appearances, impressions)
- Disagreement over quality, timing, or visibility of branding
Without clarity, sponsors may feel short-changed, while athletes feel overburdened.
3. Financial Consideration and Payment Structure
Why it matters
This clause must set out:
- Sponsorship fees or value-in-kind
- Payment schedule
- Performance-linked bonuses (if any)
- Taxes and deductions
- Consequences of late or non-payment
Why disputes arise
Problems typically stem from:
- Unclear milestone-based payments
- Disputes over whether performance targets were met
- Cash-flow issues for sponsors or athletes
- Failure to specify whether fees are refundable upon early termination
Money disputes are the most common and the most avoidable with precise drafting.
4. Exclusivity and Category Restrictions
Why it matters
Sponsors often require exclusivity within a particular product or service category (e.g., sportswear, energy drinks, betting companies).
The clause should define:
- The category clearly
- Whether exclusivity is absolute or limited
- Whether personal endorsements outside the category are permitted
Why disputes arise
Disputes arise when:
- Categories are too broadly defined
- Athletes already have pre-existing endorsements
- Social media endorsements blur category boundaries
Overly restrictive exclusivity clauses can also be challenged as unreasonable restraints of trade.
5. Morality and Reputation Clauses
Why it matters
Given the public nature of sport, sponsors need protection against reputational harm arising from:
- Criminal conduct
- Doping violations
- Discriminatory or offensive behaviour
- Social media controversies
Why disputes arise
These clauses are often:
- Too subjective (“conduct bringing the sponsor into disrepute”)
- One-sided in favour of the sponsor
- Invoked prematurely without due process
Athletes frequently challenge terminations under morality clauses for being vague, disproportionate, or unfair.
6. Intellectual Property and Image Rights
Why it matters
This clause governs:
- Use of names, images, likeness, and trademarks
- Approval rights over marketing material
- Duration of IP usage (including post-termination)
Why disputes arise
Issues emerge when:
- Sponsors continue using images after contract expiry
- Athletes object to unauthorised campaigns
- No approval mechanism exists for marketing content
Failure to address image rights precisely can result in IP infringement and reputational damage.
7. Term and Termination
Why it matters
The agreement must clearly state:
- Contract duration
- Termination for convenience vs cause
- Cure periods for breach
- Consequences of termination
Why disputes arise
Disputes arise where:
- Termination rights are imbalanced
- “Material breach” is undefined
- Financial consequences of termination are unclear
Sudden termination can have severe commercial and career consequences, particularly for athletes.
8. Performance Obligations and Compliance
Why it matters
Athletes and teams may be required to:
- Maintain fitness standards
- Participate in events
- Comply with anti-doping rules
- Adhere to governing body regulations
Why disputes arise
Conflicts occur when:
- Injury prevents performance
- Regulatory bans or suspensions arise
- No force majeure or injury protection is included
Without protective drafting, athletes bear disproportionate risk.
9. Dispute Resolution and Governing Law
Why it matters
This clause determines:
- Jurisdiction and governing law
- Arbitration vs litigation
- Sport-specific tribunals (e.g., CAS)
Why disputes arise
Disputes escalate when:
- Jurisdiction is unclear in cross-border deals
- Parties disagree on forum competence
- Arbitration clauses are poorly drafted
Early clarity saves time, cost, and reputation.
10. Confidentiality and Non-Disparagement
Why it matters
These clauses protect:
- Commercial terms
- Strategic information
- Brand reputation
Why disputes arise
Issues emerge when:
- One party publicly criticises the other
- Social media posts breach confidentiality
- Clauses are too broad and restrict lawful disclosure
Conclusion: Drafting Prevents Disputes
Most sponsorship disputes are not about sport—they are about expectation misalignment and contractual ambiguity. A well-drafted sponsorship agreement anticipates risk, balances commercial interests, and reflects the realities of modern sport, including digital media, reputation management, and regulatory compliance.
For athletes, sponsors, and advisors alike, investing time in precise drafting is far less costly than resolving disputes after reputational or financial damage has already occurred.
EK 