What effect has the economy had on sponsorships and endorsements in the business of sports?
A panel at the Sports Lawyers Conference discussed this issue, and here are some of my notes from the perspective of counsel for a Stadium/Arena owner, counsel for a sneaker company, and counsel for an athlete:
Stadium/Arena Owner:
- In the area of naming rights and stadium/arena sponsorships, money as as well length of contract are down
- Owners are looking for more money upfront
- Contracting parties have become more creative; consider the renaming of Dolphins Stadium after Jimmy Buffett’s LandShark Lager, a short-term deal which appears to be more about branding and tapping into Buffett’s incredible marketing reach than money
- Potential sponsors have a fear of entering into a sponsorship agreement and looking bad – i.e. the new home of the New York Mets, CitiField
Sneaker Company:
- The volume of sponsorships and endorsements have remained steady, but the dollars are different
- Performance-based incentives have not been affected; sponsors will still pay for the attention created by remarkable performances
Athlete:
- Sponsors appear to be using the economy as an excuse to pay athletes less
- Cash – more specifically upfront cash – is the key to the deal, more now than ever
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