As football clubs look ahead to their commercial arrangements for 2025/26 and beyond, our team of sector specialists across advertising, marketing & sponsorship and sport have pulled together a list of useful tips to be aware of when entering into a new sponsorship agreement. Although these considerations are timely in the world of English football, many of the observations are applicable to other sports and even other sectors too.

The most fundamental aspect of a sponsorship agreement for clubs and sponsors alike will be the scope of rights being granted. This package of rights will be the foundation that the sponsorship is built on. It will be the first thing that the parties negotiate (usually long before a legal contract is drafted) and will ultimately determine multiple factors such as the fees payable, the extent of any exclusivity granted and many other elements of the final sponsorship agreement. Sponsorship rights have evolved in recent years, as clubs and sponsors continuously look for more creative ways to exploit and extract value from their sponsorship arrangements. The traditional kit rights, stadium branding and hospitality packages all still feature, but so too do more creative rights such as social media content creation, online advertising and co-branding of products.

It’s critical that the rights are clearly defined at the outset, so everyone is on the same page. There is often a desire to leave things open-ended and agree how the partnership will be activated as you go, but this uncertainty can often cause a material difference in expectations, leading to tension in the relationship and (in a worst-case scenario) disputes and a breakdown of the partnership entirely. This doesn’t mean that there can’t be mechanics to consider alternatives along the way, but the core expectations are central to value and the parties need to be aligned on these. For football clubs, it’s important to only promise rights that can actually be delivered. Clubs will be limited by various factors, such as the requirements of football authorities, legal restrictions on how they can advertise in certain industries and existing exclusivity. The parties should have honest and transparent discussions at the outset, and take appropriate external advice, to align expectations and create a package of sponsorship rights that both parties are happy with.

Exclusivity is one of the most heavily negotiated elements of a sponsorship agreement. Sponsors frequently attribute a significant proportion of the value from their sponsorship to the exclusive association they have with a particular football club within their brand sector. With the business operations of sponsors often straying into multiple different industries, it is incredibly important to be clear about where that brand sector starts and ends, and therefore the types of products and services that the sponsor is able to promote using its sponsorship rights and affiliation with the football club. Clubs will want to ensure that the exclusivity is sufficiently narrow to avoid cutting across existing deals (which can lead to disputes) or shutting off future revenue opportunities. Carefully drafted contractual provisions can go a long way to achieving this difficult balance of maintaining sufficient flexibility for the club and maximum value for the sponsor. Again though, transparency on both parts can serve the parties well – these arrangements are often referred to as a ‘partnership’ after all.

Football clubs should be particularly careful when entering into sponsorship arrangements with parties in regulated sectors. Sponsorships in industries such as gambling and financial services often provide the most lucrative deals for football clubs, but they do present a higher risk. The highly regulated nature of those industries means there are legal implications for those who advertise such brands; an umbrella which football clubs can easily fall under by virtue of granting certain sponsorship rights. There are various protections clubs can consider including in their sponsorship agreements to ensure they don’t fall foul of the relevant regulators, such as warranties around the sponsor’s licensing status and compliance with applicable law; notification obligations to ensure the club is made aware of any changes that could impact it; suspension/termination rights to exit the sponsorship in a worst-case scenario; and indemnities to effectively allocate the risk of legal/regulatory compliance. Clubs should ultimately be seeking specialist legal advice when contracting with entities in these regulated sectors. A timely reminder… as to the importance of regulatory compliance in a gambling sponsorship context was given to football clubs earlier this year. To get the advice needed may also take time and it may be needed across multiple jurisdictions – all of this should be factored into the negotiation process and is where a network of truly expert advisors in the relevant sector, is essential.

Clubs should also be aware of the potential for the legal landscape to change in terms of how they advertise products in particular industries. For example, new rules restricting and/or banning the advertising of food and drink that is high in fat, salt, or sugar (so-called ‘HFSS’ products), and could therefore impact the nature of rights clubs can grant to sponsors in those industries, will come into force on 1 October 2025 (more on those here). Sponsorship arrangements can often span multiple years, so putting in place carefully prepared agreements with adequate flexibility is vital for football clubs to stay on the right side of their potentially changing legal obligations throughout the term.

Certain sponsorship agreements may need to be reported to the football authorities, and clubs should be clear on those obligations at the outset of any new sponsorship. Premier League clubs currently need to notify the Premier League of any agreement over £100,000 within 14 working days of its execution. This will cover the vast majority (if not all) Premier League sponsorship arrangements. For transactions which are worth over £1,000,000 or 5% of a Club’s turnover, if lower (which are defined as “Threshold Transactions” by the Premier League) there is a requirement to notify the league in advance or within 2 working days of execution of the relevant agreement. There is also a restriction on clubs receiving any consideration from a Threshold Transaction until the Premier League has confirmed that it is happy with the arrangement.

Further restrictions apply in respect of transactions with entities related to the owners of a Premier League club (“Associated Party Transactions”), which must be submitted to the Premier League for an assessment to determine whether they are at “fair market value.” The rules governing Associated Party Transactions have been subject to an ongoing high profile legal challenge by Manchester City FC, which could see the existing rules declared void and unenforceable. For now, they remain in place and clubs should continue to comply with them when entering into any commercial arrangement with an associated party. Wiggin’s football regulatory experts will be monitoring this case for further updates and remain on hand to assist clubs following the latest developments.

Like any commercial contract, there will be a variety of legal provisions which may be heavily negotiated by the parties to a sponsorship agreement. Particularly relevant examples include:

• Intellectual Property – Both parties will want to ensure there are clear parameters on use of each other’s IP especially as the use of IP in the digital age is far more ‘global’ than any use of branding on the pitch-side. Licences should be clearly defined, and it is useful to consider documenting sensible approval mechanisms which will work in practice for both sides and should help avoid unauthorised use of each other’s brands.
• Liability­ – Like any good contract, a sponsorship agreement should be clear on each party’s exposure in the event of a claim. The nature of the sponsorship will often determine where the parties land in this regard, but both sides should think about overall caps and exclusions of certain types of loss. On the other hand, there may be certain risks for which liability of one or both parties should be unlimited and/or the subject of an indemnity.
• Suspension/termination rights – Nobody wants to think about this at the outset, but both sides should consider scenarios when they may wish to suspend or terminate their obligations under the agreement. Clearly defined rights will help set the expectations of the parties and make things that bit easier down the line if and when something has gone wrong. These rights can also act as a useful incentive to ensure each party continues to comply with its key obligations under the agreement.
• Consequences of termination – The parties should include clear obligations on termination. Sponsorships are fixed for a period of time and it is often important (particularly for the football club) that a line in the sand is drawn on termination to avoid any ongoing association which could, for example, impact on future exclusivity. The parties should consider obligations to cease using the other’s IP, remove marketing materials and hand back any property of the other. There should also be clearly defined payment/refund mechanisms in the event that the agreement has been terminated early. Sell-off rights may also be important where there are products being sold by either party in connection with the sponsorship.

Our team of football specialists together with our sector expertise across advertising, marketing & sponsorship means Wiggin is very well placed to advise you on your sponsorship arrangements across a variety of industries. Please do get in touch if we can be of any assistance.