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Business of Event Sponsorship

Last week I suggested that in the attempt to diversify the economy, Carnival should be looked at with focused attention on the ability to sell broadcast rights to international audiences in the diaspora and elsewhere in the world where T&T's indigenous products are used and valued.

The majority of responses to this perspective on Facebook, email and otherwise agreed that we should seek to sell rights to certain events and to also sell documentaries, film and TV packages of the best of Carnival. They have also suggested that, at this moment, attention needs to be paid to producing market ready products that can be captured on film.

This week I wish to focus on the fact that though all events are not suitable for broadcast purposes and while this may not be the aim of an event producer, if the level of sponsorship for Carnival events continues to drop at the rate that it has this year, there may come a time when we do not have the plethora of events to choose from, either to broadcast or to simply enjoy as consumers of the product. Event producers therefore need to focus attention on the value of the sponsorship rights that they offer to prospective sponsors and investors of events.

Reports coming in from event producers this year are grim. The injection of sponsorship capital from corporate, governmental and other sponsors has been reduced, no doubt due to the current projections for the economy. As such, some promoters have chosen not to produce some of their events and some have chosen to cancel outright midway through the production cycle due to lack of sponsorship funds.

The impact of this is felt, not only on the income of the event producer, but in reduced job opportunities for service providers such as caterers, bar staff and companies that provide infrastructure such as stage erection, lighting, decor and other aspects of the production.

Many of these jobs have been lost. I am of the view that after this season ends, event producers should re-group and focus their energies on ways in which they can increase the level of their offerings to retain and attract new sponsors and new investors in the years ahead.

Sometimes it seems like we are a people stuck in yesterday, resistant to the fact that our market is no longer as unsophisticated as it used to be in years gone by. Just as the tastes of patrons at events have evolved and they now demand value for money in the kinds of events they patronise, so too have the needs of corporate sponsors who are bombarded with sponsorship requests year round. They want more value for the sponsorship capital requested.

What are some of the legal and business issues involved in sponsorship deals?

Typically, event promoters seek to entice sponsors with the promise that, in exchange for the injection of capital, certain sponsorship rights will accrue. Some of these rights are, for example, the right to erect branded paraphernalia, set up concession stands, or even to capture footage at events.

However, in the age of social media where companies now have access to brand promotion opportunities on sites such as Facebook, Twitter and Instagram, the promise of traditional branding tools such as flags, banner ads and concessions stand is no longer as attractive as it was before.

Many sponsors complain that they do not see a return on their investment in events because promoters fail to deliver on the sponsorship rights promised.

Some of the ways event promoters can improve on the delivery of sponsorship rights are by ensuring sponsors can do site visits well in advance of the actual day of the event so they have ample time to set up concessions stands and erect the branded paraphernalia they were promised.

Many sponsorship deals has been lost because sponsors were unable to erect their branded material in a way that suited their needs and were denied the opportunities to get value from the monetary investment. The loss of potential income at concession stands increases the number of unsatisfied sponsors because placement in an area of the event where few patrons will view the booth can severely hamper opportunities to generate revenue if one is selling food or other branded items.

Gone are the days when a sponsor is satisfied simply to inject capital into an event on the basis of a promoter's friendship with the artistes who promise to perform. More and more sponsors are want proof of the artiste's obligation to perform at the event and require copies of contracts entered into with performers.

Given the fact that in many cases the sponsorship money requested varies dependent on the level of artistes carded to perform, the fact that a promoter can actually produce a written and signed contract which demonstrates an artiste's contractual obligation to the event can go a very long way in reassuring a hesitant sponsor that he or she is entering into an arrangement with a promoter who will honour commitments.

Clarifying the ownership of intellectual property rights in a sponsorship arrangement is another area where attention needs to be given well in advance of the event date. Many times, due to the capital invested and the efforts spent on marketing the event, questions arise as to ownership of material created to promote and publicise the event. Lack of clarity in these matters together with the current financial situation and the general informality with which these sponsorship deals are proposed have caused many sponsors to pull out of this year's events.

The onus is now on event promoters, who are no doubt operating in an extremely competitive environment, to set themselves apart by elevating the negotiation process and
demonstrating to prospective sponsors or investors a level of business sophistication that is not currently the norm. The ability to provide documentary evidence of relationships with artistes, service providers and other parties whose involvement is required to produce the event is therefore crucial.

Promoters ought to also consider creative new offerings apart from the traditional branded paraphernalia and perhaps offer statistical data which provides projected income, as well as market research on the audience and demographics of the event so sponsors can be more informed on the value of investing in one event over another.

(Carla Parris is an entertainment and sports attorney (LLB, LLM) with 12 years practical experience in the creative sector with a client base spanning the music, film, fashion, broadcast and sport sector. Apart from running her law practice, she has participated in more than 12 local and regional conferences in intellectual property law and the creative sector and has appeared on local TV and radio stations discussing the importance of intellectual property law and creative industry development.)

Published: Jan 24th 2016
Guardian Media House
Written By: Carla Parris
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