ProtectingSponsorshipRiskIn Sports
Performance clauses raise your cost. Underperformance erodes your return. How do brands protect against both?
Where Is Your Exposure?
Sponsorship deals may carry two distinct financial exposures: one when a partner overperforms, the other when they don't.
The Cost of Success
Performance-based incentive clauses and fee escalators are common in sponsorship deals. A deep playoff run, a championship, or a record-breaking season can trigger one. It's a double-edged sword: real recognition for you, and a cost due at the same time. Capital held in reserve against that trigger sits idle until the time it is needed.
The Cost of Falling Short
Underperformance, early elimination, and weak attendance don't change the sponsorship fee. The obligation stays fixed. The value you're receiving for it may not.
How to Solve It
A range of risk management solutions exist to protect your sponsorship dollars. When performance triggers a fee increase, you receive the funds to cover it. When performance falls short of what you expected, you recover sponsorship dollars for that season, dollars you already committed, now returned to you.
Deal Analysis
We audit the specific performance triggers and ROI metrics in your existing or upcoming partnership to identify where financial exposure may lie.
Identify Additional Concerns
Beyond the outlined clauses, we consider exposure specific to your concerns. For example, less than expected wins, lower than anticipated attendance, off-field factors, or anything tied to the value you're counting on.
Structure Design
We build a structure around the exposure that matters most to you: upside, downside, or both. We iterate until it fits the deal.
Capital Placement
Placement happens through specialty capital partners operating extensively in the sports and entertainment industry. The structure is contractual and financially backed.
For qualified brand personnel managing sports partnerships
The Sponsorship Risk Guide
Receive a guide covering how brands structure protection for team and individual athlete sponsorships, plus a practical checklist to identify where your own exposure sits.
- Team sponsorship analysis: upside and downside exposure across team level deals
- Individual athlete analysis: incentive structures and value risk in individual endorsement deals
- Publicly known examples analyzed, plus case studies of structured deals
- An exposure checklist to see where your own sponsorships may be at risk
About
There are very few things greater than sports. The life lessons learned as a participant. The excitement in the atmosphere of attending a game. The emotions and memories of being a lifelong fan.
Koa Mo'o structures risk management strategies for brands sponsoring in sports, on a mission to protect the financial commitments that elevate the sports ecosystem.