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Expanding your Brand Presence through Sponsorship

Corporate event sponsorships are an excellent and strategic way in which to promote a company’s brand to a diverse and wide audience and prospective consumer base. On a global scale, some of the largest entertainment, fashion and sports events fall in January and February (Fashion Weeks, Superbowl, Winter Olympics, Grammy’s, Oscars). Ever eager to explain the legal issues involved in branding strategies, Froese Law has dedicated this week’s newsletter to the legal pitfalls of event sponsorship.

Through event sponsorship, brands align themselves with key consumer events in an attempt to capture the attention of a large audience of event attendees. The more logical/complimentary a match between brand and event (i.e. credit card for fashion shows, pizza for Superbowl, airline for Winter Olympics), the more effective the associated connection becomes in the consumer’s mind. This is grand scale thinking, but there are entry level sponsorship opportunities (i.e. sponsorship of one off corporate golf tournaments – a strategy that is written into every accounting firm’s DNA, it appears). The key strategy for a brand is to determine: a) who is your brand’s target demographic? b) where do they flock? and c) which event mirrors your brand’s vibe?

As with any business undertaking, the parameters of the business relationship should be codified in a legal agreement – in this case, a sponsorship agreement. Defining rights, responsibilities, obligations, expectations and payment terms ahead of the actual sponsored event is key to a successful and fruitful business relationship, and certainly assists should the relationship sour. Below is a sample of the some of the terms that should be addressed in the sponsorship agreement:

1. Clear delineation of which party owns what intellectual property.

2. What are the limits and guidelines associated with the use of the intellectual property?

3. What is the term of the sponsorship relationship?

4. Can the agreement be renewed?

5. What happens if one party wishes to terminate the agreement early?

6. Who is responsible for the costs associated with the sponsorship activation?

7. What are the payment terms?

8. What restrictions are in place to protect the reputation of either party?

9. What are the performance obligations of either party to effect the sponsorship publicly?

10. Which party assumes liability and indemnifies the other? What are the mishaps that would trigger indemnification?

Ultimately, through a sponsorship relationship, two parties are coming together for a mutual benefit: profit and exposure. Hopefully, the relationship will prove fruitful and enduring. Codifying the rights, responsibilities, expectations and limits set between the parties assists in a real and substantial way in ensuring that the parties’ relationship maintains effective, productive and beneficial.

If your brand would benefit from sponsoring or being sponsored, feel free to reach out to Froese Law.

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© 2020 by Froese Law

Froese Law provides its Canadian law services by a professional corporation.  

Froese Law provides its U.S. legal services in affiliation with a U.S. based law firm.

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