LegalGELegalGE
...

Sponsorship Agreements

Is sponsorship tax-deductible in Georgia?

Sponsorship is considered an advertising expense for the sponsor and is fully deductible from gross income, provided it is properly documented as a service.

Can alcohol brands sponsor sports?

Yes, but with restrictions. The Law on Advertising limits the content and placement of alcohol ads, and sports federations may have additional ethical rules.

What if the sponsored team plays poorly?

Usually, poor performance is not grounds for termination unless there is a specific "performance clause" in the contract, which is rare in general sponsorship.

Can I terminate the contract if the star player leaves?

Only if the contract has a specific "key person" clause. Otherwise, the sponsorship is usually tied to the team/entity, not individual players.

Reading Time

3 min

Published

...

Sponsorship agreements are the main legal instrument for cooperation between business and sports/culture. This is not a simple donation; it is a mutually beneficial transaction where the sponsor receives advertising benefits (brand awareness, image improvement), and the recipient (sports club, federation, event) receives financial or material resources. A sponsorship agreement must be detailed and precise to avoid misunderstandings between the parties. Terms regarding exclusivity, intellectual property usage, and force majeure (e.g., event cancellation during a pandemic) are of particular importance. Lawyers ensure that sponsorship terms are realistic, measurable, and legally enforceable.

What Does the Sponsorship Agreements Service Cover?

The service covers various types and stages of sponsorship:

  • Title Sponsorship: An agreement granting the sponsor the broadest rights (e.g., naming rights for a league or stadium).
  • Technical Sponsorship: Contracts for the supply of equipment and inventory (e.g., Nike, Adidas) in exchange for logo placement.
  • Media Sponsorship: Partnership with media outlets for informational support.
  • Activation Rights: Outlining the sponsor's rights to conduct marketing activities (stands, promo actions on match day).
  • Category Exclusivity: A guarantee that a competitor brand will not appear at the same event.

Real-World Situations When You Need This Service

Disputes are common in sponsorship relationships:

  • Event Cancellation: A concert was canceled due to bad weather. The sponsor demands a refund. The lawyer regulates the force majeure clause.
  • Reputational Damage: A sponsored athlete got involved in a scandal. The company wants to terminate the contract to protect its reputation (Morality Clause).
  • Breach of Exclusivity: The Football Federation signed a contract with a beer company while another beer is already being sold at the stadium. Conflict resolution is needed.
  • Bonuses: The sponsor refuses to pay a bonus because the team did not win the championship, although the contract stated "finishing in a prize-winning place."

Georgian Legal Framework

Sponsorship is regulated by the "Law of Georgia on Advertising" (Article 10 - Sponsorship), which distinguishes sponsorship from charity. The "Civil Code" and the "Law on Broadcasting" (TV sponsorship rules) also apply. From a tax perspective, sponsorship is treated as the provision of a service (advertising) and is subject to VAT, unlike donations.

Process: How a Specialist Works

The lawyer's role includes:

  1. Negotiation: Legally securing the value of the rights package (Inventory).
  2. Protection: Drafting rules for intellectual property usage (brand book compliance).
  3. Enforcement: Recovering funds in case of non-payment.

Why Legal.ge?

Legal.ge allows you to find lawyers who understand commercial law and marketing. Sponsorship is an investment, and like any investment, it requires protection. With our help, your sponsorship agreement will be a solid foundation for a long-term partnership.

Updated: ...

Specialists for this service

Loading...