Key considerations for clubs negotiating commercial contracts ahead of the 2021/22 Season
2nd June 2021
Here is our at-a-glance summary of some of the key areas for clubs to consider when entering into new commercial contracts, or varying older contracts, ahead of the 2021/22 season.
- Games Behind Closed Doors/Partially Behind Closed Doors – the impact of COVID is still around. Clubs need to ensure that ticket terms and conditions for season tickets, match-days, executive boxes and hospitality etc. deal with what happens where games are played behind closed doors, or where there is a reduced crowd in attendance. Partner/sponsor rights granted to commercial partners need to address the impact of closed stadiums or reduced numbers on tickets and hospitality granted and in-stadium promotions and advertising rights. Additionally, food and drink (pouring rights) deals still need to allow for the possibility of reduced numbers of fans – ensuring that minimum volume limits should still remain low.
- Player appearance rights for promotional activities – clubs should always ensure the club is only granting the rights it is able to grant. Save where image rights agreements are in place, players should only feature in groups of three or more and no players should feature more prominently than others. Appearances should always be subject to the player’s training and match schedule and the club should always have final approval rights in respect of any materials produced.
- Non-disclosure agreements/confidentiality provisions – as well as the usual carve outs found in confidentiality clauses in commercial contracts, clubs should ensure they are permitted to disclose confidential information as required by the football authorities and also to potential investors/purchasers of the Club – provided the investor/purchaser is subject to obligations of confidentiality.
- Agreements with betting and other regulated entities (such as on the finance side) – these should include provisions requiring the entity to maintain and act in accordance with any licence or regulations and to inform the Club of any investigations undertaken and/or sanctions issued against them by a regulator. Termination rights in the event that any such licence is revoked will be required and the Club may also want to include a right of termination in the event that the Club believes it may suffer detriment as a result of being associated with a partner who is under investigation or who has been sanctioned.
- Be specific and detailed in the sponsorship rights being granted – these rights are central to the contract. As such, it is vital that their scope is clearly identified. For example:
- What costs are included/excluded? For example, does the sponsor have to pay for the cost of producing any advertising materials it wishes to display at the ground?
- Is time is of the essence for any delivery obligations under the contract?
- Where the sponsor is to receive personal appearances from players or the manager, does their allocated time with the players/manager include travel time?
- Are the rights granted subject to and conditional upon the sponsor’s compliance with any other terms and conditions, such as ground regulations, other T&Cs, privacy notices etc.?
- How many tickets will the club provide the sponsor, and for which matches, and in which stand?
- How many social media posts will the club post about the sponsor’s goods or services, and on which channels?
- Anti-bribery, modern slavery and GDPR provisions – where relevant, ensure these are included and that there is a corresponding termination right for breach.
- Renewal/extension rights and rights of first refusal – great care must be taken when negotiating clauses to ensure that the club’s ability to find an alternative sponsor is not jeopardised in the event that the club and the existing sponsor are unable to agree to an extension or renewal. Any extension or renewal should be subject to the club’s consent. Auto-renewal should be resisted. Periods of exclusivity should be as short as possible to allow the club to go out in the market to source alternative deals. Clear timeframes for negotiations to start and finish should be included.
For specific advice on the agreements you have in place, or new agreements you are looking to make, please contact Christian Slinger or India Seaton from the Sports Team.