Sponsorship in event activity – the basics

Organizing events often requires obtaining support from third parties, for example by transferring financial funds, specific commodities or know-how. In exchange for the above, the event organizer may offer marketing and promotional services. This form of cooperation is referred to as sponsorship.

Restrictions on sponsorship

In most cases the law does not interfere with who may be an event sponsor and does not limit the freedom of promotional activities performed by event organizer. However, in the case of certain industries, there are significant restrictions in place regarding sponsorship or, more broadly, marketing and advertising activities. Such industries include pharmaceuticals, financial, medical or legal services.

In the context of event activity, particularly important are restrictions on event sponsorship by representatives of the alcohol, tobacco and gambling sectors. This follows from the fact that promotion by other means than sponsorship is prohibited for such entrepreneurs.

In the perspective of this article, the most important limitation involves restricting the allowed forms of promotion solely to “informing about sponsorship”. This means that promoting a sponsor may be done solely by means of a messages such as “this event is sponsored by…” and using trademarks (logo) of the sponsor. On the other hand, the most far-reaching limitation is the prohibition of sponsorship as such. In such a case, obtaining any support from such entrepreneurs is not allowed.

Due to their considerable practical significance, below we will review in detail the legal regulations relating to sponsorship when the sponsor’s business activity involves alcohol, tobacco or gambling. Additionally, we will indicate the most important matters which should be considered when concluding an agreement with the sponsor.

Sponsor – alcohol sector

In the case of sponsors operating in the alcohol sector, it is necessary to differentiate between producers/distributors of beer (beverages containing up to 8% of alcohol), wine (between 8 and 18%) and strong alcohols (above 18%). This division – as well as the place and the manner of conducting promotion – is the basis for determining the scope of allowed forms of promotion.

If a beer producer is the sponsor, it is permitted to inform about sponsorship of any event on radio and TV. On the other hand, presenting information about sponsorship by a wine distributor in this manner is permitted only in the case of mass events. Such restrictions are applicable to any other media including billboards. If the sponsor produces strong alcohols, informing about sponsorship is prohibited. This prohibition relates to any “external” forms of promotion.

The situation is different when the promotion takes place in premises selling alcohol. In such case, the sponsor – alcohol producer – may be freely promoted. Therefore, if our event is held for example in a club, every form of promotion shall be allowed. It should be stressed that in this case promoting strong alcohols is also permitted, which constitutes one of the few allowed forms of advertising strong alcohols.

Sponsor – tobacco sector

The issue of sponsorship is restrictively regulated by the anti-tobacco provisions, according to which cigarette producers may not be a sponsor of “sports, cultural, educational, health and socio-political” activities. In other words, the very act of sponsorship is prohibited, even without mentioning about it in any way.

At first glance it may seem that such prohibition relates to any activities of the MICE sector, but many lawyers are of the opinion that the aforementioned provisions do not concern activities of purely entertainment nature, such as a rock concert. This matter is disputable, so when you’re approached by a cigarette producer with a sponsorship proposal, it pays to be cautious. At the same time, it is worth noting that producers of tobacco products may not promote themselves during any event by distributing its products free of charge.

Sponsor – gambling sector

Also the Gambling Act introduces certain restrictions on sponsorship. Although event sponsorship itself by representatives of the gambling sector is permitted, organizers may perform promotional activities consisting of only informing about sponsorship and solely in relation to betting services.

It is prohibited both to inform about sponsorship and to perform any promotional activities relating to other forms of gambling (e.g. gambling machines, card games). The only exception to this prohibition is the promotion of gambling services inside a casino.

Sponsorship agreements

Entering into an adequate agreement – preferably in writing – is a matter of vital importance as far as the cooperation with a sponsor is concerned. Sponsorship agreements constitute commonly employed cooperation agreements and are governed by general provisions of civil law.

When negotiating a sponsorship agreement, one should pay particular attention to the exact definition of each parties’ obligations (performance). The sponsor may provide the event organizer with both financing and certain goods, e.g. inviting a famous speaker. In exchange for these services, the organizer undertakes the use of the logo, slogan or advertising gadgets of the sponsor in the event’s promotion. The sponsor may often also use the event’s signage in the course of the sponsor’s own activities, e.g. advertising campaigns.

In order to legally conduct promotional campaigns, the event organizer should obtain the sponsor’s consent for the use of its intangible assets, especially trademarks. On the other hand, it is important to precisely specify the scope in which the sponsor itself may quote the event – e.g. when it may use the event’s logo within its own marketing activities.

Individual nature of sponsorship

Due to the huge diversity of events and unconventional forms of promotion, it is necessary to consider each event sponsorship individually. The above presented remarks serve only to indicate certain legal risk areas related to sponsorship in the context of event activity.