Nov 29, 2010 at 03:39 PM
written by Lou Imbriano

The Nuances of Negotiating Sponsorship

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Most organizations that want to engage in a sports or entertainment sponsorship may have experience in negotiating deals, but most lack the experience in these specific areas, and do not understand the nuances that come into play during a sponsorship negotiation. We are not a law firm, but we have negotiated countless sports and entertainment deals. Some were executed quickly, while others were grueling. However, regardless of the length of negotiations, one factor remained constant: the more information and facts that we had about the other side, the better the negotiations went for our clients or for us.

Many brands enter into a sponsorship deal not understanding what is important to the team, and because of that, the opportunity to expand on the deal is left on the table. Likewise, many teams or venues do not fully understand the leverage points of brands that, at times, would allow them to expand on a deal as well. Whatever the case may be, researching and understanding with whom you are negotiating and their goals, are crucial to execute the best possible deal for both sides. Not to be overly cliché, but it really can be a chess match. The more intel your side possesses, the more favorable of an outcome you will realize.

That is why it is imperative for any brand engaging in a sponsorship to have someone on their side who understands the industry and the organization they are negotiating with. When a brand is negotiating with a team, they need to understand these three basic areas:

  • Category placement and pricing
  • Team or venue assets and inventory
  • The sponsorship landscape for that organization and sport.

    A bunch of companies have employees with this type of knowledge and experience internally, but the majority of firms lack that kind of expertise. In those cases, relying on either your mass-marketing advertising agency or your PR group to pick up the slack is just as big of a mistake as handling it internally when your organization is lacking in experience. If you go to the doctor with a heart problem, do you want a general practitioner or an orthopedic surgeon to provide a recommendation for treatment? Of course not - both are wrong, you want an experienced cardiologist. If you have a toothache, do you just pull the tooth out yourself? No, that would be silly. So is handling areas of sponsorship and marketing if you do not possess that specialized experience.

    If you lack the knowledge internally, do not be afraid to reveal that fact and recommend bringing in a specialist to assist in securing an intelligently executed deal. The money you save and/or the additional assets you receive will more than justify the expense, and it saves so much time when it’s done correctly on the front end as opposed to the clean up of a poorly negotiated deal. Always build the best team possible, covering all areas of pertinence, in all facets of what you do, but especially at the inception of a deal.

    Lou Imbriano serves as President and CEO of TrinityOne, a sports and entertainment marketing company specializing in maximizing revenue generation and brand awareness for sports teams, athletes and companies. Lou offers running commentary on the TrinityOne blog and allows us to publish it here when the subject fits.


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