How to negotiate sport sponsorship agreements — 7 key legal considerations & emerging trends

Originally published on 31 July 2023 and updated on 24 August 2026.

The sponsorship landscape in sport has evolved dramatically over recent years. Gone are the days of a simple logo on a shirt — modern sponsorships now demand much more. As a result, rights holders have become increasingly creative in offering a variety of commercial and digital opportunities.

The 2026 FIFA World Cup highlighted the scale of opportunity and risk for both sponsors and rights holders. With 48 teams competing across Canada, Mexico and the United States, the tournament presented an unparalleled platform for global brand exposure and innovative activations. 

Building on discussions at our State of Play 2026 event around the evolution of commercial partnerships in sport, Lauren Hicks from our specialist sports sector team sets out seven core legal considerations that every rights holder should address when negotiating sponsorship agreements and outlines emerging trends that shouldn’t be overlooked.

Seven key legal considerations

1. Granting rights to potential sponsors

Rights holders must ensure that they can grant the rights a potential sponsor is seeking. 

These may include:

• activations
• shirt sponsorship
• social media content
• advertising rights.

Before granting sponsorship rights, it’s important to confirm that they’re actually available and not already committed to another sponsor. Rights holders should avoid relying on vague drafting or provisions that leave key rights ‘to be agreed between the parties’, as this creates uncertainty and increases the risk of dispute.

Rights holders should also ensure that the agreement includes appropriate mechanisms to deal with any failure to deliver the sponsorship rights granted to the sponsor. The contract should clearly set out the available remedies, which may include providing alternative rights or a pro-rata refund of the sponsorship fee. Rights holders should also make it clear that these remedies are the sponsor's sole and exclusive remedy in respect of any failure to deliver the affected sponsorship rights. Clear contractual provisions on these issues can help to manage expectations and reduce the risk of disputes if rights can’t be delivered.

2. Balancing exclusivity without limitation

Exclusivity is often one of the most commercially valuable aspects of a sponsorship agreement — and sponsors will frequently push for broad protections against competitors. For rights holders, however, granting exclusivity requires careful consideration to avoid unnecessarily restricting future commercial opportunities.

For example, an apparel brand may seek exclusivity within its category in a bid to exclude its competitors. Without clear drafting, this could unintentionally prevent the rights holder from entering into other arrangements with brands that don’t directly compete but may fall within a broadly defined category. A rights holder can avoid this issue by dividing apparel rights into distinct categories. For example, Real Madrid has appointed adidas as its official kit supplier, while separately partnering with Louis Vuitton to “kit out the men's and women's football and basketball squads for travel and institutional events”.

Rights holders must therefore ensure that granting exclusivity doesn’t unintentionally limit them from engaging and collaborating with other suitable companies in the future.

3. Financial considerations and contra sponsorship

The financial aspects of a sponsorship agreement require careful attention. It’s important to establish clear terms for payment timings and (if possible) ensure that payments are made in advance. To mitigate financial risks, a rights holder may wish to seek a guarantee from the potential sponsor’s parent or other group company.

In addition, financial protections could address late payment interest, tax considerations and exchange rate risks for international sponsors. It’s recommended to include a ‘no right to set-off’ provision to prevent the sponsor from arbitrarily withholding part of the sponsorship fee due to alleged non-delivery of rights or other breaches of the sponsorship agreement.

In addition to cash consideration, sponsorship packages may include payments-in-kind or benefits-in-kind (often referred to as ‘contra’). While contra sponsorships can offer rights holders valuable resources, they carry significant financial and reputational risks. These include overvaluing provided goods, non-delivery of promised assets, tax/revenue complications and the loss of financial flexibility.

4. Maintaining control of promotional activities

A key component of any sponsorship agreement is the promotional activity undertaken by the sponsor. As these actions often involve the use of the rights holder’s intellectual property, they must maintain a degree of control over such activities.

For example, this could involve:

• requiring prior written approval for promotional activities
• insisting on a minimum promotional spend
• exerting influence over individual promotions
• preventing sponsors from associating with third parties without the prior written consent of the rights holder.

5. Defining scope, duration and renewal provisions

The duration and geographical scope of the sponsorship agreement can significantly impact its value and effectiveness. While committing to a long-term arrangement can provide stability, it may also reduce flexibility, particularly in a fast-paced commercial landscape. 

Rights holders should think carefully about the appropriate term of the agreement, including whether to build in rights to terminate early or options to extend. It’s also important to consider how to approach sponsor requests for renewal or matching rights. In short, ‘matching rights’ give an existing sponsor the opportunity to match a competing offer from another sponsor before the rights holder can enter into an agreement with that third party.

The territory for which rights are granted also needs careful consideration. Rights may be granted on a local, regional or global basis — and the wider the territory, the greater the commercial value being given away.

For longer-term arrangements, particularly in football, rights holders may also wish to consider mechanisms that link fees to performance. For example, where a club is promoted during the term or reaches a particular stage of a competition, the agreement could provide for an uplift in sponsorship fees to reflect increased exposure and commercial value.

6. Ensuring legal compliance

Sponsorship arrangements operate within a highly regulated environment. Both the rights granted by a rights holder and activities carried out by the sponsor must comply with all applicable laws, as well as the rules and requirements of the relevant governing bodies.

Rights holders should carefully consider the rules of the relevant authorities within their sport. In football, this may include The FA, EFL, Premier League, FIFA, UEFA and, increasingly, the Independent Football Regulator. Similar regulatory frameworks exist across other sports, including the ECB and ICC in cricket, World Rugby and the RFU in rugby union and the FIA in motor sport.

These rules and regulations can affect the types of sponsors permitted, placement of branding and way in which sponsorship rights are activated. A failure to comply can result in sanctions, fines and/or reputational damage. It’s important to ensure that compliance is maintained from the date of signature and through any subsequent legal changes.

Likewise, agreements with sponsors shouldn’t conflict with the requirements of any broadcaster. Importantly, sponsors should be obliged to comply with all relevant advertising and promotional laws, including industry codes of conduct.

7. Preparing for dispute resolution

Even the most well-drafted agreements can’t completely rule out the possibility of disputes. It’s therefore essential to include clear provisions for dispute resolution in the sponsorship agreement. Determine beforehand whether disagreements will be settled through mediation, arbitration or court proceedings.

It’s also crucial to clarify jurisdictional issues. Specify which country’s laws will govern the agreement and where any legal proceedings will take place. This can help to avoid complex legal dilemmas and ensure a quicker resolution in case of any disagreements.

Implementing effective sponsor agreements

Major sports events like the FIFA World Cup, Rugby World Cup and Formula One Grands Prix (e.g. Silverstone) highlight the scale of the opportunity for both rights holders and sponsors but also the importance of getting the contractual foundations right.

While the considerations outlined above aren’t exhaustive, they reflect some of the key areas that rights holders should carefully assess when structuring sponsorship arrangements. A well-drafted agreement can help to deliver a commercially effective sponsorship, protect long-term value and provide the flexibility needed to capitalise on future opportunities as the landscape continues to evolve.

Talk to us 

Our award-winning sports law team advises national governing bodies, international federations, clubs, venues, event organisers and other rights holders on the full spectrum of sponsorship and commercial arrangements.

From structuring and negotiating sponsorship agreements to protecting commercial rights and managing regulatory risk, we help clients to unlock value while safeguarding long-term commercial opportunities.

To explore how our team can help you, call 0333 004 4488, email hello@brabners.com or complete our contact form.