Key commercial issues when negotiating a new official kit supplier agreement

An official kit supplier agreement is one of the most valuable and multi-faceted commercial rights transactions that a rights holder will enter into as, in effect, it is a combination of three types of contract that can be complex enough of their own accord, namely:

1. a high-value supplier agreement (in respect of the kit);
   
   
2. an international merchandising agreement (in relation to associated sales revenues); and
   
   
3. a major sponsorship agreement (addressing branding and advertising rights granted to the supplier).

This article looks at some of the key commercial issues which rights holders need to consider when negotiating a new official kit supplier deal and explores some contractual solutions. It will be particularly useful for rights holders’ commercial teams and in-house lawyers to use during negotiations. It is focused on the supply of kit and equipment for use by teams and does not seek to address issues specifically related to individual endorsement deals. Specifically it looks at:

• The scope of the agreement;
  
  
• High-performance vs fanwear;
  
  
• Design process;
  
  
• Manufacture, payment and delivery;
  
  
• Protecting the value of the deal; and
  
  
• Expiry and termination.