A sponsorship agreement is a popular tool today, to protect yourself as a content creator, or to get some additional funding while promoting one of your favorite brands. If you or your company has a connection to the marketplace, then you have something valuable to sponsors that want access to that market. By promoting products, services, or brands, you can develop a strong revenue stream for otherwise non-monetized work.
You’ll need to do all of the proper research and homework first, but this template will give you a head-start and a good framework. You should always consult a lawyer though before finalizing any contracts.
A sponsorship agreement is a legally binding contract, written to provide fair and equitable transactions between a company or individual that is promoting the company, and the company that holds a brand, product, or offers a service. Sponsorship is a form of marketing. When the company wishing to increase marketing identifies you as a connection to more market share, there is a potential for you to make money by representing the product, service, or brand.
Sponsorship can include small one-time contracts, with small companies, or with large companies spanning long term work. They can be contingent on your success, or they can be pro-rated based on the number of views you get or other metrics. You can receive free items from the company, which you should wear or use in public, or display in your content, as stipulated by the agreement.
A sponsorship agreement is where you and your sponsor negotiate the terms of your work together. The acts required by you, such as how many mentions, emails, or specific types of promotion, and the company’s fee paid to you for compensation, and any other terms, can all be found in this agreement. A sponsorship’s details can be included in a section talking about a specific marketing project, and the fees, moneys, and liquid compensation amounts are usually in a section called “Consideration.” These two sections are critical to a contract, as they each describe what one side of the contract agrees to do for the other side.
These types of agreements have a lot of levers and buttons to push, and a wide variety of options. For example, exclusivity can increase the value of your contract to the sponsors. If your company agrees to represent only one brand of whatever product or service the company represents, and you choose them, then they can use this to boost the value of the marketing you provide, and in turn, the fee you charge can be higher.
A good sponsorship agreement needs to include dates to be valid. Sponsorships continue always for a fixed period of time. Otherwise, they may be invalid. They also should include all of the terms and conditions that apply to the sponsorship. If there is no fee or consideration in exchange for your exclusivity, then the agreement can also be dismissed. You should always make sure that the number of agreements is reduced and simplified as much as possible. Keeping everything in one agreement is the most legally sound way.
When you are providing information about another brand, there are legally binding terms of how the brand should be represented. You can be in breach and owe significant penalties if a logo is displayed too small, or you show a competitor’s product if these are stipulated in the sponsorship agreement. Sponsorship agreements often have a lot of special conditions, such as the word “notwithstanding,” which is a way to create exceptions in a sneaky way. If your agreement has a lot of these, keep in mind that it may be written to seem like it’s mostly in your favor, but by the law, it may actually be mostly in the favor of the other party.
Many of these contracts also include a noncompete clause. This clause can also have a bit of variability, but in general, it means that you might not be allowed to earn from other sponsorships. It’s similar to exclusivity, but it might extend beyond the date of the actual sponsorship itself. These terms can be easily overpowering in the favor of the contractor or company marketing its brand, so you should make sure you’re not giving away too much there.
Intellectual property and nondisclosure agreements are common as well in these types of contracts. It’s important to know that these intellectual property agreements don’t have to be as a separate contract. NDAs can easily be embedded within a sponsorship agreement, and are subject to the same terms. In our template, we also include a “survivability” clause, which allows the provisions of the NDA to last forever, instead of expiring with the rest of the contract. If your company is providing you access to research and development-grade products, and it hasn’t been released to the public yet, you may need to keep that stuff a secret.
Secrets released to the public are generally not covered under NDA though. Once the company releases these details which were previously subject to NDA, in most cases, it is ok to talk about them, although you should stick only to the details that are part of the official press releases.
You have rights, which are given to you by your local government. Agreements such as this one can’t waive your rights in many scenarios unless you see the word “waive” or “waiver.” Even with a waiver as part of a contract, some rights are non-waivable. You should always know your rights, and keep up with the local regulations. State law, county, and even city laws can apply to your situation, and usually offer the smaller party some extra protections against large parties that might otherwise take advantage.
Now that you have a basic grasp of the sponsorship contract, you can take our template for free and construct one of your own. Protect yourself and your small business with a well built agreement that is fair, concise, and transparent, and start earning more money by monetizing your work.