Sponsorship for Sports Clubs: Acquisition, Opportunities, and Legal Frameworks

Germany’s approximately 90,000 sports clubs are constantly seeking donations and sponsorship partners, as membership fees alone are not enough to sustain a club financially. Many clubs fund up to two-thirds of their ongoing expenses through donations and sponsorship deals, highlighting the importance of securing committed and lucrative sponsors. However, sponsorship is more than just financial support—it can create added value for both the club and the sponsor, ideally resulting in a mutually beneficial partnership. The challenge lies in securing such sponsorships.

How Sponsorship Works and Its Role in Sports Clubs

A sponsor provides financial or material support to a sports club in exchange for advertising rights. Sponsorship is a give-and-take arrangement where both parties benefit: the club secures funding, and the sponsor gains exposure and brand association. While clubs rely on sponsorship as a financial necessity, companies use it as a public relations tool to enhance brand visibility and build positive associations with fans and club members.

Through sponsorship, companies can:

Promote their brand and products
Strengthen their regional presence
Foster positive sentiment within the club's community

Since sponsorship involves a marketing effect, sponsors usually have a say in the design and placement of advertisements provided by the club.

Common Types of Sponsorship and Advertising Opportunities

Typical sponsorship placements include:

Jersey advertising: Logos on team shirts, training gear, and balls
Perimeter advertising: Banners and signage around stadiums and training grounds
Club media presence: Ads in club magazines, websites, and social media
Discounts & partner programs: Special deals for club members and fans

For high-value sponsorships, clubs may offer naming rights for venues and events, similar to the Allianz Arena in Munich, which is fully owned by FC Bayern but carries the sponsor’s name due to a long-term sponsorship deal.

Types of Sponsorship

Sponsorships vary in scale and commitment:

Main Sponsor – Provides the largest financial contribution and gets the most visibility. Often engaged long-term and may influence club activities.
Co-Sponsors – Second-tier sponsors with less visibility and smaller financial commitments compared to the main sponsor.
Side Sponsors – Minor sponsors that contribute modest funds or engage for specific events.
Title Sponsor – Funds a specific event, competition, or league, earning naming rights, such as the Barclays Premier League (now simply the Premier League after Barclays ended its sponsorship).

Finding the Right Sponsor for a Sports Club

Clubs must approach sponsorship as a business partnership, ensuring both sides benefit. The key elements to consider are the three P’s:

Price – How much financial support is needed, and how will it be used?
Product – What marketing exposure can the club offer in return?
Package – Can different sponsorship options be bundled to maximize value?

Where to Find Sponsors

Local businesses that have no existing sponsorship commitments
Regional and national companies with sponsorship programs listed on their websites
Club members who might have employer connections or contacts in business networks
Online listings and social media promotions for available sponsorship opportunities

The bigger the club, the easier it is to attract sponsors. Small and mid-sized businesses are more likely to support local clubs, as the return on investment is higher compared to sponsoring a large, nationally recognized club like FC Bayern.

Step-by-Step Guide to Sponsorship Acquisition

Understand the Sponsor’s Goals
- Sponsors typically aim to enhance their image, increase brand awareness, and promote products/services.
- Many want to leverage emotional connections between the club and its supporters.
Create a Club Profile
- General club information, philosophy, and values
- Club structure, membership figures, demographics, and past achievements
- Event calendar including matches, tournaments, and community events
Define the Three P’s
- Price: How much funding is needed and for what purposes?
- Product: What advertising opportunities does the club offer?
- Package: Can multiple sponsorship tiers be bundled for added value?
Organize a Sponsorship Team
- Assign dedicated members responsible for sponsorship acquisition.
- They should have business knowledge and strong networking skills.
Identify Potential Sponsors
- Create a targeted list of potential sponsors.
- Ensure the company’s values align with those of the club.
Make Contact with a Personalized Proposal
- Avoid mass emails—tailor each proposal to the company’s objectives.
- Highlight the benefits the sponsor will receive.
Draft a Sponsorship Agreement
- Define contractual terms, including:
  - Parties involved
  - Scope and type of sponsorship
  - Club’s obligations
  - Duration and renewal terms
  - Event commitments
  - Exclusive sponsorship rights (if applicable)

Note: Sponsorship agreements must comply with legal and tax regulations to avoid disputes.

Legal & Tax Considerations: Sponsorship vs. Donations

Key Differences:

Donations – No return service is required; tax-exempt; clubs issue donation receipts.
Sponsorship – Requires advertising in return; clubs must issue invoices (not donation receipts).

Sponsorship income is subject to tax and must be correctly reported. Passive sponsorships (where no specific return service is agreed upon) may be exempt from VAT, depending on legal interpretation.

General rule of thumb:

If the club actively promotes the sponsor, 19% VAT applies.
If the club passively acknowledges the sponsor, a reduced 7% VAT may apply.

For specific tax concerns, clubs should consult a tax professional or legal expert.