Structuring sponsorship deals: Key considerations for athletes and brands on negotiating equity

The^[1] athlete–brand sponsorship deals model has been changing rapidly. Roger Federer’s partnership with On Running^[2] has provided a reference point for athletes looking to build their own equity deals, which are increasingly common. The appeal is clear: equity can outlast an athlete’s competitive years and, where the business succeeds, deliver returns that far exceed any fixed‑fee sponsorship arrangement.

For brands, the takeaway is not that equity should replace sponsorship wholesale, but that it can be a powerful tool where the athlete is genuinely capable of shifting the company’s trajectory. The real difference between partnerships that generate headlines and those that produce sustained value lies more in how the deal is structured than in the percentage of equity granted on day one.

This article sets out the three main structures of athlete-brand deals: traditional fee, pure equity and hybrid, and the trade-offs of each, before working through the key provisions of the sponsorship, investment and shareholders' agreements that underpin an equity deal. It provides some key negotiation points to consider for both brands and athletes when negotiating and structuring these deals.

This article looks at:

• The sponsorship fee model
• The pure equity model
• The hybrid model
• Key legal provisions in hybrid structures
• Key Issues in Sponsorship Agreements
  • Managing reputational issues
  • Performance obligations
  • IP/Image Rights
• Investment Agreements
  • Type of Investment Agreement
  • Dilution of the athlete’s equity
  • Vesting of the athlete’s equity
• Shareholders’ Agreement
  • Leaver provisions
  • Buyback of the athlete’s equity by the brand
  • Information rights of the athlete
  • Transfer restrictions for the athlete’s equity
  • Exit rights
• Conclusion