Welcome to my second blog of my sponsorship series. While last week we focused on “how to seek sponsorship”, this week we will focus on negotiating sponsorship agreements. All sponsorship agreements are different, but I have included some of the basics to help you better prepare. Next Monday (December 26), I will post my third and final blog of the series, “how to maintain a good relationship with sponsors”.
Blog 2: What to expect when negotiating with sponsors
How are sponsorships set up?
Sponsorships can be structured in a variety of ways. For simplicity, there are 3 main types of sponsorship.
Type 1: Pro-Deal
With a pro-deal sponsorship you receive product at a reduced price.
Type 2: Product
With a product sponsorship you receive product for free.
Type 3: Financial Compensation
With a financial compensation sponsorship you receive money.
Among the three types of sponsorship there is some fluidity. For example, you may receive a product sponsorship where you receive 4 pairs of shoes a year for free while additional shoes can be purchased at a pro-deal price. Another example is a product sponsorship where you receive unlimited product and are reimbursed for entry fees at competitions.
It is important to remember that all companies handle their sponsorships differently, there is no one set sponsorship type that works for every athlete and every company.
Are contracts required for sponsorship?
Contracts are not required for sponsorship. A contract serves the purpose of legally protecting the company and the athlete by clearly laying out the parameters that are required to be followed by both parties. This becomes especially important when you are being compensated monetarily. It holds the athlete accountable as well as the company. With a contract in place you are legally guaranteed the agreed upon compensation permitting that you have been fulfilling your obligations as the athlete.
How long are contracts?
Contract length can vary from a renewable month-to-month contract to an x number of months contract to an x number of years contract and so on. Contract length will vary by company.
Who creates the sponsorship offer?
This is where sponsorship can be tricky. Larger companies will generally have sponsorship agreements that can be altered and negotiated. Smaller companies may have sponsorship agreements, but sometimes you will have to create a sponsorship agreement together.
There is definitely a balance when creating an offer. The company may give you their requirements and you suggest your salary, or you may be responsible for suggesting the requirements and the salary.
What is included in a contract?
While no two contracts are the same, they will have similarities and cover certain points. The points mentioned below are very basic and contracts often go into more detail than I am mentioning.
-Weekly, monthly, quarterly, etc.
-Matching for competition winnings
-Media incentives (if you are in a magazine with a visible logo you may receive additional payment)
*Not all of these obligations will be included in every contract.
-Social media posting
-Appearances/Meet & Greets
-Competition and/or event attendance
-Updating sponsor on schedule (usually in monthly increments)
-Photo shoot attendance
Contracts may include restrictions on what you can/cannot do.
-No conflicting sponsorship agreements (this is fairly standard)
-No drug use
-No endorsement of tobacco/alcohol (This is usually dependent on the company and the age of the athlete)
I hope that this second blog gave you more insight into sponsorship and what to expect when negotiating with sponsors. Negotiating sponsorship deals takes time and practice. Over time you will learn what to expect and it will become easier to know which offers are right for you. Next week in my final blog I look forward to discussing the next step, how to maintain a good relationship with sponsors.