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Sponsorship and Advertising Contracts in Sports: Practical Guidelines for Lawyers

Sports sponsorship and the advertising associated with athletes’ image rights are among the main sources of revenue in modern sports. From global stars such as LeBron James or Lionel Messi to international clubs and federations, brand value has become a strategic asset that requires legal protection. However, sponsorship contracts are not free of risks. Exclusivity clauses, image obligations, and termination causes often give rise to disputes that end up before ordinary courts or arbitration tribunals.

Legal Nature of Sports Sponsorship

The sponsorship contract is an atypical commercial agreement, combining elements of service contracts, assignment of image rights, and advertising. The sponsored party (athlete, club, or federation) undertakes to display the sponsor’s brand or product. In return, the sponsor provides financial or in-kind consideration, seeking visibility and prestige through association with sport. There is no uniform regulation at the international level, which compels the drafting of highly detailed contracts that are often subject to international arbitration (for example, TAS/CAS o ICC).

Essential Clauses
Sponsorship contracts usually contain several key clauses:

• Image Rights and Intellectual Property: assignment of the use of the athlete’s name, voice, and likeness; limitation of image use to specific products; obligation to obtain prior authorization for advertising campaigns.
• Exclusivity: prohibition on advertising products of direct competitors; frequent conflicts with club sponsors (e.g., sports equipment suppliers).
• Conduct Obligations (Morality Clauses): allow termination if the athlete engages in conduct that damages the brand’s reputation.
• Duration and Territorial Scope: geographic scope is crucial in a global market; contracts must specify whether they cover particular territories or apply worldwide.
• Early Termination and Penalties: compensation for breach; protection of the athlete against non-payment.

Frequent Disputes

The most common conflicts include: contradictory sponsorships (clashes between a player’s personal sponsors and the club’s collective sponsors), unauthorized use of image in campaigns beyond the agreed scope, personal scandals leading to immediate termination (doping, gender violence, tax fraud), and exploitation through new technologies (NFTs, video games, social networks) not covered by the contract.

International Examples

• Adidas–Nike (Messi and Adidas vs. FC Barcelona and Nike): a potential conflict between personal and collective sponsorships.
• Euro 2020 (Cristiano Ronaldo and Coca-Cola): the gesture of removing bottles generated enormous economic impact and raised doubts regarding the real obligation to display the product.
• United States (NBA and collective contracts): the league negotiates global sponsorships that must coexist with players’ individual agreements.
• Michael Jordan and Nike (Air Jordan): paradigm of long-term success in building a joint brand.
• Maria Sharapova and Nike (2016): temporary suspension of a contract following a positive doping test, under morality clauses.

Trends and Future Challenges

Current trends include: digital expansion (specific clauses for social media, streaming, and digital platforms), sustainability (inclusion of ethical and environmental commitments), specialized arbitration (preference for international forums to resolve disputes), and esports, where sponsorship contracts replicate traditional models but with features unique to the digital environment.

Practical Guidelines for Sports Lawyers

Lawyers should: clearly define assigned image rights and limits of use; include precise exclusivity clauses avoiding overlap with club or federation sponsors; draft balanced morality clauses that protect sponsors without leaving athletes overly vulnerable; regulate the territorial and digital scope of the contract, including social media and virtual assets; establish international arbitration mechanisms for swift and specialized dispute resolution; and anticipate termination scenarios with clear and proportionate compensation schemes.

Key Takeaway

Sports sponsorship is an essential economic driver but also a complex and evolving legal field. In a globalized environment, the challenge is to draft contracts that protect both the athlete’s image and the brand’s investment. For sports lawyers, mastering these issues is no longer optional: it is a strategic necessity in a business where reputation and legal certainty are as valuable as victory on the field.