The Club as an Object of Sponsorship and Its Status
A club sponsorship agreement fits within the framework of the Georgian Law on Sport, whose Article 8 defines public and other non-state sports organizations: these are sports federations, associations, clubs and other unions aiming at the development of sport. The state supports the development of these organizations' activity and involves them in the governance of sport; where necessary, the Ministry of Education, Science, Culture and Sport may, within its competence, transfer individual powers to them and supervise their exercise. Article 11 sharpens the club's status: a sports club conducts its activity in accordance with the law, the legislation in force and its own statute; it is a legal entity; and club status is granted to an organization whose founding documents satisfy the requirements of Georgian legislation and of the relevant national sports federation. For a sponsor, this means that where the counterparty is a club, establishing its status requires a double check — both state registration and conformity with the federation's requirements. A club without valid status is a risky object for a long-term sponsorship investment.
The Club's Lawful Sources of Financing
Article 23 establishes the system of sports financing, and it is here that the legal place of sponsorship contributions opens up. The state supports and cares for the development of sport and for this purpose provides budget financing; the funds allocated for the development of sport are reflected in a separate line in the state and local budgets. Beyond the budget, the law directly lists the sources of financing: contributions of state, private and public organizations, institutions and individual persons; profit derived from the club's own sporting, commercial-economic, advertising and intermediary activity; and funds received from sponsors and other assistance. Club sponsorship belongs to this third source — the sponsor's contribution is lawful sporting income. At the same time, funds received from non-budget sources have no effect on the amount of state budget allocations: a contribution made by a sponsor does not become a ground for reducing the club's budget. This design makes sponsorship a genuinely additional instrument, not a substitute pushed into the club by an indifferent budget.
The Earmarked-Use Rule
The central restriction of club financing is earmarking: it is impermissible to use budget and non-budget contributions designated for sport for purposes other than their designation — they must be consumed only for the development of sport. This rule touches the sponsorship agreement as well: where the sponsor conditioned its contribution on a specific purpose — for example, the restoration of a sports base, the support of a youth team, or advertising rights — the club cannot deviate from that purpose. The state, for its part, supports the development of sport through the expansion of the material-technical base, appropriate financing, grants, and the moral and material encouragement of athletes and specialists — and sponsorship funds operate as a supplement to this system, not as its replacement. Drafting the agreement with a precise purpose clause is therefore not a formality but the mechanism that keeps the spending lawful.
Sports Symbolism in Sponsorship
Club sponsorship almost always touches symbolism — the placement of a logo on the kit, combination with the emblem, the advertising use of the club's sign. Article 26 provides that the procedure for using sports symbolism — the emblems and official signs of public sports organizations, sports institutions and organizations, and of international and other sports competitions — is determined by legislation. The same article arranges the system of sports titles and awards: the Ministry approves honorary titles and determines the list of sports awards for winners and record-holders in international and national championships. At the time of the sponsorship deal this means that the transfer of rights over the emblem and official sign must be formalized separately and in conformity with the rules established by legislation — otherwise the sponsor may find that its most visible asset, the club's symbol, rests on an uncertain legal foundation.
Frequently Asked Questions
We answer the most frequently asked questions about club sponsorship below.
May a club receive sponsorship contributions?
Yes — Article 23 names funds received from sponsors among the lawful sources of financing, and such contributions do not reduce the budget allocations.
How is a club's status determined?
Under Article 11, the club is a legal entity, and its status is granted to an organization whose founding documents satisfy the legislation and the relevant national federation's requirements.
May sponsorship funds be used for another purpose?
No — contributions designated for sport cannot be used other than for their designation; they must be consumed only for the development of sport, and a sponsor-conditioned purpose is bound by this rule.
Who determines the use of the club's emblem?
Under Article 26, the procedure for using sports symbolism — emblems and official signs — is determined by legislation.
How We Help on Legal.ge
The Legal.ge team assists sponsors and clubs on club sponsorship agreements: we verify the club's status and founding documents, prepare contribution and advertising-rights agreements in compliance with the earmarked-use rule, align the conditions for using sports symbolism with the legislation, and resolve disputes under the agreement. If you are concluding a sponsorship deal with a club or an issue in existing cooperation needs clarification — contact us on Legal.ge and we will plan the right steps for your situation.