Font Size: Increase | Decrease

Rights Negotiation

• Negotiating Value-In-Kind
• Tracking Hospitality Assets
• Benefits of Pass-through Rights
• Negotiating Performance Related Clauses
• Buying Ancillary Assets to Support Activation
• Gaining Support From Senior Executives
• Making the Decision to Renew
• Performing Due Diligence on Properties
• The Case For Variable Sponsorship Pricing

Home > Sponsorship Resources > Rights Negotiation

Performing Due Diligence on Properties

So you've gone out and found a property that seems to fulfill your objectives, provides a strong brand fit, and delivers your desired target audience. Everything about the property and the assets being offered to your company looks great on paper. Before you sign a contract, you may want to consider digging a little deeper, especially if you are dealing with a newly created property that has little or no history, or an established reputation. Generally, you should look into the following areas while performing your due diligence:

Experience: Investigate the background of the promoter, owner, and/or day-to-day manager of the property. Have they actually staged an event of this scale before and did they do so successfully, or have they staged events that have frequently experienced glitches, or worse, catastrophic events?

Sponsor Satisfaction: Request contact names at a few companies that have sponsored the property in the past or sponsored other properties run by this management. Ask sponsors whether management delivered on their commitments and did so in a timely manner, or even better, whether they over-delivered. Did the property pay attention to detail, communicate with sponsors frequently and effectively, and respond to each sponsor's individual needs? Ask each sponsor to give management an overall grade and then look at all of the feedback collectively.

Industry Reputation: In order to gauge how the property's management is perceived throughout the industry, expand your research beyond sponsor relations. Talk to other stakeholders with whom the property's relationships may impact your sponsorship. These groups include the property's vendors, television networks, athletes and entertainers, agents, and league management.

Corporate Citizenship: If your sponsorship is tied closely to corporate presence in your headquarters city or to any community relations initiative, you should ascertain the property's standing in the community. Does the property have strong relationships with local civic or charitable organizations, especially one that you may want to tie into your sponsorship? Are the property's executives involved in local institutions?

Proper Documentation: It is imperative that you verify the property has proper and updated insurance, permits, licenses and any other necessary documentation that will minimize your chances of being embarrassed and sued.

Criminal Background: Sadly, there are a few bad apples managing and promoting sponsored events in sports, entertainment, the arts and causes. Their actions and intentions may be illicit and immoral. You may want to confirm that the people you are doing business with are not among that group.