How to Create a Podcast Sponsorship Agreement
Before you dive in, if you are interested in podcast sponsorship, check out these titles in our “sponsorship for podcasters” series:
- Sponsorship for Influencers
- Podcast Sponsorship Opportunities: 5 Examples of Sponsorship Done Well
- The Complete Guide to Podcast Sponsorship
- How Much Should You Charge for Podcast Sponsorship
- How to Get Sponsorships for Podcasts: 6 Steps to Success
- How to Create a Podcast Sponsorship Proposal That Sponsors Will Love
Through the tips in my recent series on podcast sponsorship, you’ve found a sponsor that’s eager to work with you. You’ll soon sit down with the sponsor to finalize your arrangement. Before you do that, you need to put together a sponsorship agreement. How do you do that?
Here’s what you need to create a podcast sponsorship agreement:
- Basic terms
- Payment schedule
- Sponsor benefits
- Intellectual property
- Termination rules
The very first thing you should do when creating a podcast sponsorship agreement is to consult a lawyer. This post is meant as information only and is not intended to replace the advice of a lawyer. That said, I’ve helped many clients put together their sponsorship agreements in the past, and today, I want to assist you in doing the same.
What Is a Podcast Sponsorship Agreement? Why Do You Need One?
Before I get into the terms and conditions included in a podcast sponsorship agreement, I want to talk about the agreement itself. You need to be clear on what a sponsorship agreement is considering that it’s a legally binding document.
Let me make that clear again: when you sign on the dotted line, the agreement becomes legally binding.
Okay, so what is a podcast sponsorship agreement? It’s a contract that assigns the roles and responsibilities of both parties in the sponsorship arrangement. There’s you, the podcaster, who is offering services that will benefit the sponsor. Then there’s the sponsor, who’s providing funding, in-kind gifts, promotions, or whatever the prior agreed-upon benefit is to you.
As for why you need a sponsorship agreement, the answer is to create a sense of legal obligation among both parties. If the sponsor promises to pay you $5,000 for a podcast deal but only gives you $3,200, you now have legal recourse.
Plus, with the dispute terms outlined in the agreement (more on that coming up), you’ll know just how to pursue the sponsor to get your money.
Without a contract, your sponsor could give you $3,200 out of $5,000, stop responding to your calls and emails, and dodge you if you come to their office. You’d have no legal protection, so you’d have to let the money go.
A sponsorship agreement covers the sponsor’s hide too. They can demand a refund of their money if you don’t deliver what you promised according to the terms. This might be a partial refund or even a full one.
Putting Together a Podcast Sponsorship Agreement? Here’s What It Must Include
There’s certain information that’s required in the podcast sponsorship agreement, so let’s discuss all that now.
The Date the Agreement Goes Into Effect
All legally binding contracts have a date that the agreement starts on, and your sponsorship agreement needs this as well.
The Names of Both Parties
Similarly, the contract must identify both parties, including their full names (first and last names) as well as home or business addresses.
The Agreement Start and End Dates
How long are you expected to render services to the sponsor? Is it two weeks? Two months? The precise start and end dates will be outlined in the agreement so there’s no ambiguity.
The Amount of Money the Sponsor Is Paying You
Assuming your sponsor is paying you cash, the sponsorship agreement must outline precisely how much money. Please make sure this is an amount you’re pleased with, as once you sign the contract, it’s a pain to go back and change the terms.
The Services You’re Offering
Here is a full explanation of what services you’re offering to the sponsor.
For example, you’re going to have the sponsor on your podcast as a guest. Your services would include X number of promotional posts in the lead-up to the podcast on Y social media channels.
Then there’s the guest slot itself as well as any follow-up promotions such as replays or transcripts.
For every service you’re providing to the sponsor through your podcast, you need to outline it as such.
How the Sponsor Can Use the Services
You also must include terms of how the sponsor can use the services you provide. For example, can they distribute a portion or the entirety of your podcast episode on their website and social media accounts? Can they share a transcript? Both parties must provide a clear answer.
Although delivery dates are more dependent on events sponsorship, they can apply in podcast sponsorship as well. If you have any time-sensitive deliverables, you must include in your agreement when those deliverables will become available.
Right of First Refusal Terms
The right of first refusal is a contractual clause that allows buyers to have contractual obligations to the other party so they can buy something the other party sells as soon as it goes on the market. Again, it’s not completely applicable in podcast sponsorship, but you want the right of first refusal terms in the contract anyway.
Refund or Dispute Instructions
Should you run into snags with the sponsorship arrangement, how will disputes be settled? What happens in the unfortunate event the sponsor wants a refund? You guessed it – this must be in your podcast sponsorship agreement as well.
A non-compete clause means that the sponsor won’t work with another podcaster while your arrangement is ongoing and that you shouldn’t work with a company like theirs. That doesn’t mean you’re limited to one sponsor, but it does mean the other sponsors won’t sell the same kinds of products and services.
Applicable Law Details
If national, provincial, or statewide laws apply to your podcast sponsorship agreement, you need a section explaining those laws in full.
Earlier, I discussed the non-compete clause, but exclusivity terms are different, especially in a sponsorship agreement. If a sponsor decides to purchase a sponsorship package, their purchase could grant them exclusive rights.
Exclusivity in a sponsorship agreement usually comes with quite a hefty price tag attached, and that’s true of your podcast sponsorship terms as well. Under the terms, be aware that the sponsor might request that you stay away from certain industries or individual companies or brands as you pursue sponsorship.
The payment schedule is not the same as the payment terms. The schedule outlines when the sponsor will send you the money and precisely how much. Some sponsorship seekers opt for a lump sum payment while others receive payment in installments. Either way, you’ll know when the money is coming thanks to the information in this section.
If there are fees and taxes on the funds received, which there usually are, those must be accounted for as well.
As you work with a sponsor, you two will create activation ideas that you can utilize to make the arrangement even more beneficial for the sponsor and your audience.
Even before you sit down to spitball activations, during the discovery session, the sponsor will reveal critical information about their current and past sales and marketing strategies.
This all entails intellectual property, as do ideas and inventions. Since I’m sure you care about the future of your intellectual property, you’ll want to detail what’s what and who owns it. You also need to describe who between you and the sponsor has the rights to which intellectual property as well as what those rights entail.
I talked about refunds and disputes earlier, but what if you want to out-and-out terminate the deal? Is that allowed? If you have a section in your contract that entails terminations, then sure.
You and the sponsor have to come together to discuss which situations in your eyes and theirs would be egregious enough to warrant termination. For instance, the sponsor paying you less than what you’re owed could be grounds for termination in your opinion.
Terminating the agreement will incur penalties, typically financial ones, so you must state what those penalties are as well. You also must detail how much advance notice the other party has to issue the termination warning.
Is a Verbal Agreement Enough?
I know all this sounds like a lot, and it might be tempting to rely on a verbal agreement between you and the sponsor instead.
I must ask you to reconsider. Although verbal agreements are often legally binding, since nothing is written down, the terms could be fluid.
For example, let’s say you verbally agreed with the sponsor to deliver them 10 podcast-related assets, including a contest, maybe an ad or two, a guest slot, and promotional social media posts. Later on, the sponsor says you agreed to 20 assets.
You know you didn’t, but how can you prove it? Well, if you recorded the verbal contract being made, that’s proof. Then again, there are all sorts of legal rules about recording someone without their consent, so your recording might not be admissible in court.
You see where I’m going with this? It becomes a huge game of he-said, she-said, but no one can prove they said anything. You or the sponsor can change terms willy-nilly or forget original terms even though you’re legally bound to them.
It’s a mess. Writing down contractual terms is always the better option.
Creating a legally binding podcast sponsorship agreement, especially for the first time, can be daunting. I hope the information I presented here to you helps you get started. I want to once again stress that I’m not a lawyer and the information in this post does not constitute legal advice.
You should always work with a lawyer when proofing and finalizing any legally binding document, and that includes your podcast sponsorship agreement. It’s the best way to ensure the terms are fair for both parties!
ABOUT THE AUTHOR
Chris Baylis is the President and CEO of The Sponsorship Collective and a self-confessed sponsorship geek.
After several years as a sponsor (that’s right, the one investing the money!) Chris decided to cross over to the sponsorship sales side where he has personally closed tens of millions of dollars in sponsorship deals. Chris has been on the front lines of multi-million dollar sponsorship agreements and has built and coached teams to do the same.
Chris now spends his time working with clients to value their assets and build strategies that drive sales. An accomplished speaker and international consultant, Chris has helped his clients raise millions in sponsorship dollars.