Take Into Account Before A Sponsorship Agreement

Take into account before a sponsorship agreement

Introduction

A sponsorship agreement can be the great opportunity for an athlete to improve its income and boost the sports career. However, it is essential to be attentive to legal aspects, image rights and tax obligations that are related to this type of contract. Pencing in it, then we will clarify some central issues of sponsorship agreements. And, to begin with, nothing more appropriate than understanding what sponsorship is about in sport and how it is legally characterized.

Developing

What is a sponsorship agreement in sport works? To begin, sponsorship is a type of help (generally related to the economic) that is granted to encourage and offer security to a person while performing their work, an activity of interest, or their research or studies. In fact, the main legal text that deals with sponsorships in Spain is found in article 22 of Law 34/1988, advertising general. And in it, we read a very similar definition, in which it is understood that a sponsorship contract is:

"The one for which the sponsoring, in exchange for economic aid for the realization of its sports, beneficial, cultural, scientific or other activity, undertakes to collaborate in the advertising of the sponsor". In this way, it is possible to understand a sponsorship agreement from very diverse perspectives, which are not always linked to the sports field. However, when we focus on this type of contract within sport, we see that it consists fundamentally in any type of help offered by brands and companies to sports.

To athletes or sports entities. Types of sponsorship and regulation. Currently, we can talk about two types of sponsorship: the free and the onerous or advertising. While the latter is directly related to advertising actions, the free sponsorship agreement usually resembles a patronage activity. Although these contracts end up in practice, they are legally not treated or defined in the same way. 

Therefore, it is important that we understand their main differences before signing them. Onerous sponsorship and advertising: how do they regulate? An onerous sponsorship agreement is directly related to advertising. Basically, the athlete receives economic aid from a certain company or brand and, in return, must "lend" the image of it and commit to participate in advertising actions and products. Now, what is meant by advertising according to Spanish legislation?

Again, we travel to the General Advertising Law to read, in its article 2, that advertising includes all forms of communication by a natural or legal person, whether public or private; This activity will be carried out in the context of the exercise of some commercial, industrial, professional or artisanal activity. In addition, the same text provides that the main objective of these actions is to promote the sale of movable or immovable property, contracts of services, obligations or rights, being able to be carried out directly or indirectly.

Logically, the times, conditions and forms of commercial exploration of the presence and image rights of the athlete must be previously agreed to the signing of the contract. Preferably with the orientation of an experienced manager and a financial advisor. What must be taken into account before signing a free sponsorship agreement? Basically, free sponsorship consists in offering specific help disinterested way to support professional activities or other people’s training. 

conclusion

This type of agreement does not involve an obligation and consideration agreement. In practice, the athlete or the sports entity are not obliged through a contract to carry out any specific activity in exchange for receiving the economic benefit. Therefore, a free sponsorship agreement is usually regulated through the legal figure of the patronage. In these cases, the main legal framework is found in article 1 of Law 49/2002, of the tax regime of non -profit entities and fiscal incentives to patronage. His text understands free sponsorship as the realization of donations for mere liberality, which implies a private participation in activities of general interest, such as sport.