Since the NSW Government announced its broad strategy for rebuilding Sydney’s stadia network in September 2015, relevant stakeholders have been scrambling to assert their positions as to how the $1.6 billion ten year investment should be allocated. Stadium owners and operators (such as the Sydney Cricket and Sports Ground Trust), major sporting codes (such as the National Rugby League and Cricket Australia) and affiliated clubs, and government departments were engaged by the NSW Government to present their views on the strategy. While competing interests meant the stakeholders were often at loggerheads, it now appears discussions are progressing and the plan is becoming clearer. However, once the overarching infrastructure strategy is finalised and construction commences, negotiations regarding access to and utilisation of the stadiums will kick-off. So, what should sporting governing bodies and clubs consider when entering into stadium and venue use arrangements to ensure their home ground becomes their fortress?
WHAT ARE THE KEY COMPONENTS OF STADIUM AGREEMENTS?
There are numerous components to stadium and venue use agreements including:
- Legal tenure;
- Usage rights;
- Advertising and sponsorship; and
- Liability and insurances.
Securing the desired and suitable legal tenure over the venue is of upmost importance when entering into a use arrangement. Facility users should ensure the basis of their access to the venue is appropriately formulated, negotiated and documented. Users should consider the suitability of a long-term lease versus a short term arrangement such as ad hoc hire for specific events, and whether they will have exclusive or shared access to the facility.
What, how and when users can access and utilise the facility should be clearly agreed with the venue owners and operators. This is particularly important when use and access is shared with others. Some key questions to consider regarding usage rights are as follows:
- Will the venue be used for matches only or for training as well?
- On game day, what times can the user access the venue for setting up and packing down?
- What facilities, infrastructure, plant and equipment at the venue can the user access and operate and what is reserved for use by the stadium operator or its contractors?
- What will the venue supply and what does the user need to provide (e.g. media and broadcasting, catering and corporate hospitality, liquor licensing, merchandise sales, cleaning and groundskeeping)?
- Who is responsible for maintenance and upkeep of the facilities?
ADVERTISING AND SPONSORSHIP
Advertising and sponsorship is a huge revenue stream for sporting organisations. A central platform for sponsors to capitalise on its affiliation with sport is through the presence of signage, branding on programs and uniforms, experiential and other promotional activities at the ground. This abundance of marketing communication often causes concerns for corporate partners of users and the venue itself particularly where the entities compete in the same industry or product category. As such, users ought to:
- Consider its sponsorship arrangements, ensure its corporate partners are comfortable with the venue’s sponsors and advertisers, and duly document that comfort; and
- Ensure the use agreement allows for the user’s corporate partners to carry out marketing activities at the venue even where they compete with the venue’s partners.
LIABILITY AND INSURANCES
Operating and using a playing facility attracts significant risk of loss and damage to a variety of persons and entities. With hundreds of patrons, corporations, contractors and employees attending on match day, the public liability risks are obvious. However, there are other less apparent potential losses such as the financial impact of postponement or cancellation of events due to weather. As such:
- the venue agreement should make it clear whether the owner, operator or user (at least from a contractual standpoint) bears such liabilities and to what extent; and
- users should seek legal advice to safeguard themselves against such risks with adequate levels and types of insurance cover.
WHAT CAN YOU DO?
This article provides a snapshot of just some of the components clubs and organisations should take into consideration when negotiating stadium and venue use arrangements.