Seven top tips when working on sports sponsorship deals from HSBC's Global Head of Legal: Sponsorship
I have long debated whether the best piece of advice I have ever received (be it playing sport or carving-out a career) should correctly be referred to as the “5Ps”: Proper Preparation Prevents Poor Performance.
Accordingly, I often find it helpful to remind myself of the basic elements of any key deal before entering the fray. Whether it's to combat the effect of having many competing demands; to help retain intellectual capital, or to draft a meaningful succession plan, revisiting the (sometimes seemingly) obvious often fleshes out the most important points to focus in on when acting on large scale sponsorship deals.
To help, the seven key areas that I focus on are as follows.
1. Who are my stakeholders and what will success look like to them?
Without being absolutely on top of this, there is little point in entering the negotiating room as the best you can possibly hope for is to turn the meeting into a fact-find where you don't lose the respect of others around the table.
It might seem counterintuitive - especially on a big deal - to try to distil success down to two or three points, but agreeing this at the outset gives me the focus I need to define success, and stay on track through constant distractions. The plethora of finer points can be hammered out as the deal takes shape.
For example, HSBC’s aim is to be the world’s leading international bank and all roads should lead back to this statement. I start with asking myself how what I can contribute to the deal that will enable our marketing team help their business stakeholders’ to further this global aim. I would ask myself, what are the three (or so) key outcomes to a specific deal that will facilitate opportunities through which HSBC can cement itself as a leading international bank?
2. How strong is my team?
Working in-house means that more often than not I have to adopt the role of utility player, as I won't always have the commercial decision-maker, or all relevant SMEs at my side. That's fine, but my approach to the deal has to change as consequence.
The in-house “squad” will often be much smaller than that of private practice, so while I can't (and wouldn't) hold myself out as an expert in areas such as tax, procurement & data security, I have to know enough to identify the issue and then draw on the relevant SME at the right time and in the right way.
A recent example for me is around the increasingly discussed (but not quite fully understood) element of the taxation of sportspersons (whether current or former) image rights in the context of sports marketing deals. This has been a thorny issue in the UK since the early 2000s, and in 2010, it is believed that many Premier League clubs came to an understanding with the UK HMRC on this issue, but this was after years of discussions and disagreement. This is now trickling-down into other sports, and will continue to do so over the next five years.
Working in a truly global matrix organisation, I count myself lucky to work with such passionate and experienced marketers and business leaders. It may sound like rhetoric, but what I learn from Giles Morgan – our Global Head of Sponsorship & Events – and his outstanding team and how they work with rights holders such as the PGA Tour, European Tour and World Rugby can’t be read anywhere in textbook or article. This gives me confidence that my commercial position is strong, therefore, I have robust foundations upon which I can build the deal.
3. Have I undertaken opposition due diligence?
For precisely the same reason as needing to know the strength of my own team, I try to understand as much as possible about the strengths, weaknesses and objectives of the other side.
Naturally - absent video analysis of the other side - this (in my view) is much more of an art than a science. Where I have prior experiences of personalities involved, I will try to draw on that. Where I don't, I will do some research (whether it's via social media, or speaking to contacts) on the key people involved. This isn't to prejudge, but I do find that this extra information can sometimes provide small, but useful and often significant context to a particular issue.
In-house lawyers will often build a reputation amongst private practice counterparts as larger deals are often sent externally due to pressure of workload, competing priorities, or simply the requirement for specific expertise that can sometimes only be obtained from trusted private practice advisers (it’s a small world, after all…). I will often “tap-up” my friends or contacts for their perspective on individuals (and sometimes the entities themselves, where I would like to know more about their leadership team) to glean those little nuggets that may help me at some point.
4. Creating a game plan and performance on the day
In my experience, most deals go 70% the way that I expect them to. This is, of course, provided that I’ve stuck to the “5Ps”.
I will always bone-up on areas of the law that I think might come up that I might not have worked closely with for some time.
Creating a clear game plan (or agenda) is a must (relating back to the key objectives) and I find it helps flush out whether the other side's preference is to take point line by line, or at more content to discuss and agree principles before getting into the nitty gritty.
Doing my research will usually (at the very least) give me an understanding of what the opposition are looking to achieve. It's easy to pay lip-service to compromise, but the reality of ensuring both parties “win” is much less certain and requires patience, empathy and a willingness to concede where business risk appetite permits.
One of the most enjoyable features of my job (for me, at least) is the fact that I am encouraged and enabled to completely immerse myself in the subject matter of the deal. As a lover of all sports (and master or none), to me, unless I feel that I have a good grasp of the end product that the consumer will experience, I don’t believe that I will be able to do the contract justice.
Now this might sound like an excuse to sample some of the world’s best hospitality at prestigious sporting events. I can’t deny that secondary benefit! However, my performance in the boardroom, putting deals together is directly informed by these experiences. Solving the perennial problem of too many T&Cs at events, and how they are incorporated could have only happened by experiencing the excitement and interaction with the event that consumers themselves experience throughout the HSBC World Rugby 7s Series.
Keeping perspective when drafting anti-ambush provisions around our huge global golf portfolio can – in my view – only be achieved effectively when I have experienced the geography of an event venue in a particular country and understand the local demography and competitors.
5. In play performance review
A small but significant point. Time and resources permitting, I will always try to run a full working draft by a colleague to see if I've assumed any knowledge anywhere or if there seems to be links I have in my head that may not have made it on to the paper.
Better still, I will get feedback from a colleague that can come along for a ride on a deal. Ideally it will be someone that has some indirect knowledge of the deal, but not enough to stop them looking at my work critically.
In a draft review, I'm not looking for a proof reading. While helpful, I care more about finding out whether a colleague feels I could have made a different play during negotiations, or if the agreement itself will stand the scrutiny of fresh eyes, unaffected by my accumulated knowledge bias.
In a huge organisation, it’s easy to become “siloed” and not know how the person on the other side of the office is interesting risk appetite in their business or function. Making the time to sit down and discuss how we lawyers have different approaches to internal policy and even legal interpretation is not something that is easy to do. Making the time to peer-review and be peer-reviewed always throws up some gems and perspectives that I had not thought of. Cynics might call it voyeurism, but glimpsing someone else’s world is not something that I find it hard to convince other busy lawyers to do. I prefer to think of it as remaining open and connected.
6. Have I publicised the result, internally and externally?
A lesson a learned from a great leader in the formative years of my legal career was that we are our own PR manager. Of course, there is a balance to be struck, so I'm not advocating an OTT fanfare of self-aggrandisement.
Internally, the benefits are many, whether working in-house or in private practice. The larger the organisation, the less likely it is that people are aware of what you actually do, let alone how what you do might benefit or affect them.
The same applies looking outside of your organisation. No matter what level you are currently functioning at, and while you will hardly ever see the immediate effects, talking about your successes (in the right way) will lead to connections and opportunities that will surprise and ultimately, enrich you.
Writing a recent post-deal update article for our group-wide internal newswire resulted in a conversation with a colleague in another part of the bank that I might never have had. She turned-out to be a trustee of a charity that really spoke to me and with which I am now looking forward to working with outside of work. A golden opportunity to me on a personal level that might never have presented itself had I not publicised my work internally.
7. Have I conducted a “Monday morning debrief” on lessons learned?
It has taken me a long time to understand the importance of this, possibly because as a lawyer, I was trained to believe that the tiniest error or omission can have catastrophic consequences for me or my client. This ignores the reality of life and the undeniable fact that a lack of time and other key resources will likely have more of a practical effect on my output than any academic limitations.
A more modern acknowledgement is that we learn more from our mistakes than successes, but as lawyers, we are taught that to err is to open ourselves up to a negligence claim. Whilst it's fair to say that I'm a believer in training hard and playing “easy”, and whilst I'm generally confident that my preparation, approach and experience will help me to secure the best deal (ideally for all parties), there will inevitably be elements that I feel could have been “even better if...” These are the focal points that I will try to take into my next deal and beyond.
As a junior lawyer in private practice, I was supporting a lead senior associate in advising a high profile European sports team on their kit manufacturing & sponsorship deal. Immediately before completion signature, I was handed a USB purportedly containing the updated pricing schedules to print and annexe to the agreement. I took the person’s assurance that handed it to me that it was the correct file. It wasn’t.
I noticed the mistake when perusing the final signed document in the car returning home from the CEO’s office and I had that immediate and gut-wrenching squirt of adrenaline in my stomach. Fortunately, we were all able to agree that it was a genuine mistake that was rectified (without contest) early the next morning, but the fact that I’m still talking about it 10 years on probably attests to the visceral nature of my own lesson-learned.
On a more positive and proactive note, I am now in the habit of sitting down with my stakeholders (around a month after the deal has concluded), and going through my legal risk note, adding commercial lessons and producing a brief summary that will (and does) aid everyone who wants to interpret and use the agreement in a more constructive and accessible way. I told you that I would state the obvious, but waiting until the dust has settled allows for much greater visibility of what has gone before, and therefore clarity of understanding what may yet come.