What’s your name and position within the organisation?
Joe Tompkins – Senior Associate at Onside Law
I’m a commercial sports lawyer who advises clients across several major sports, with a particular focus on cricket, rugby, cycling and football. My main focus is advising rights holders on high-value sponsorship agreements and other contractual matters relating to their exploitation of commercial and media rights and their delivery of international sporting events.
Tell us a little about Onside Law and what makes it different from other law firms?
Founded in 2005, Onside Law is now the oldest and most established sports law boutique in the UK. Our 17 lawyers combine backgrounds at leading “City” firms, such as Clifford Chance, Freshfields, Slaughter & May and Allen & Overy, with practical knowledge and commercial understanding that can only be obtained from working within the sports industry at organisations such as IMG and UEFA.
We understand the practicalities and the pressures our clients are subject to.
Having worked, collectively, for over 12 years at IMG, founding partners Jamie Singer and Oliver Hunt focused on ensuring that Onside Law and its lawyers had real experience from within the industry either from working in-house or via secondments, rather than simply giving advice from the ivory towers of private practice firms. This combination of technical legal expertise and sports industry experience, coupled with our experience of working with many of our clients as de facto in-house lawyers, means we understand the practicalities and the pressures our clients are subject to.
We are proud, as the firm has grown and prospered, it has played a part in the development and advancement of “sports law” into the burgeoning industry it is today, and that no firm currently has more lawyers recognised as sports law experts in the independent legal directories than us.
Who do you act for?
We act for governing bodies (including the ECB, European Tour, Ryder Cup, RFU, UK Athletics, World Rugby and LTA), teams (including Team Sky, Red Bull Racing, West Ham United and Southampton FC), individuals (including Eden Hazard, Rory Mcllroy, Victoria Pendleton, Justin Rose, Stan Wawrinka, Matthew Fitzpatrick, Maro Itoje, Tommy Fleetwood, Sir Nick Faldo and Sir Jackie Stewart), sponsors, agents and investors in sport.
You have a long list of rights holder clients, what are examples of some of the sponsorship challenges they face?
As sports rights holders compete for marketing spend against the likes of Facebook and Google, who, by their very nature, are able to provide brands with the ability to reach targeted consumer demographics and receive almost real-time customer data and metrics, one of the main challenges for our rights holder clients is how to demonstrate how their sponsorship satisfies a sponsor’s internal ROI metrics, whilst also demonstrating that sports sponsorship is not a mere media buy that should be directly compared against the digital behemoths, but rather a uniquely engaging and authentic platform for customer interaction.
A number of brands are moving away from being locked into one or two multi-channel fixed-fee partnerships with major sporting properties.
For example, a number of brands are moving away from being locked into one or two multi-channel fixed-fee partnerships with major sporting properties and, instead, are spending marketing budgets on acquiring a greater number of short-term, digital-only partnerships with incentive-driven fees (often with individual talent rather than teams/clubs). These types of partnerships allow brands to gather significant volumes of data and, importantly, to quickly refine and recalibrate their approach to sponsorship campaigns based on what works well and what does not. This makes it imperative that traditional rights holders, who rely on regular sponsorship income and the security of multi-year contracts, differentiate themselves by providing evidence of how sponsoring top-level sports organisations allows a sponsor to create meaningful, high-quality fan interactions which help the sponsor achieve its business objectives.
Agreeing parameters as to what constitutes ‘success’ for a sponsorship can be a challenging part of a negotiation.
Agreeing parameters as to what constitutes ‘success’ for a sponsorship can be a challenging part of a negotiation, as sponsors might request termination rights or fee reduction mechanisms if quantitative key performance indicators (such as sales or unique views of digital content relating to the sponsorship) are not achieved, whereas a rights holder, who will still of course be incentivised to maximise their sponsor’s exposure, may be wary of agreeing to measurements which do not account for the quality of the interactions that fans have with the sponsors of their team or club, which can of course be difficult to objectively define.
What do you consider to be the current trends within sponsorship contracts, and how are they affecting how you work and how you deliver for clients?
As mentioned above, modern sponsorships are often positioned as collaborative, digitally-focused “partnerships”, rather than brand X simply paying company Y a fixed sum in order to place a logo on a shirt and receive a few free tickets.
We are seeing a trend away from contracts that simply include an off-the-shelf rights schedule where the only variable is the ‘tier’ of rights package that is included.
From a contractual perspective, this trend towards innovative activations and bespoke sponsorship rights (such as personalised player content or sponsor products/services being incorporated into the match-day experience), together with most brands expecting some form of performance review using data analysis, means that many sponsorship contracts require novel clauses to reflect the unique features of the deal. As such, we are seeing a trend away from contracts that simply include an off-the-shelf rights schedule where the only variable is the “tier” of rights package that is included e.g. “title sponsor” receives more rights than an “official partner”, who in turn receives more than an “official supplier”.
A good sponsorship contract should be a user-friendly “living” document
This means that one of the main challenges in my role as a sponsorship lawyer is to ensure that the contract strikes a balance between providing both parties with certainty as to what they have agreed (as that is, after all, the primary purpose of the written contract), but also to ensure the drafting allows flexibility for the rights to evolve over time as both parties try to ensure the sponsor achieves as much value as possible from their rights.
Given this, a good sponsorship contract should be a user-friendly “living” document that needs to have more room for manoeuvre than, for example, a share purchase agreement for the sale and purchase of a company.
With this in mind, we seek to take a practical approach and draft sponsorship contracts which ensure that our rights holder clients are not over-promising on the rights they are actually able to deliver (and therefore exposed to breach of contract claims), but which still provide sponsor brands with comfort that as the nature of sports rights (including technological developments) and the sponsor’s marketing strategy evolves during the course of the sponsorship, the rights holder will continue to help the brand find new ways to create maximum value and reach target consumers. This requires an appreciation that sponsorship is a collaborative transaction and lawyers should be finding solutions to make deals happen in a manner that works for both parties, rather than creating unnecessarily entrenched negotiating positions (least of all because the contract negotiations are the first step in what both the rights holder and sponsor should hope to be a fruitful, long-term partnership for the mutual benefit of both parties!).
Can you tell us which of your recent projects has been of most interest to you and why?
In the last couple of years I’ve been fortunate enough to work on some of the most high-profile sponsorship deals across a number of sports, so it’s hard to pick out one particular deal. In general, it is great to help on projects where the initial contractual negotiations flourish into long-term partnerships, so it was therefore very satisfying to recently advise the England and Wales Cricket Board (ECB) on its new Test cricket title sponsorship with Specsavers, having also advised the ECB on its earlier deal with Specsavers in 2016 (when the brand became the title sponsors of the County Championship), which proved to be such a hugely successful partnership that the parties agreed to extend and enhance this year.