While the International Olympic Committee has removed the word “amateur” from their governing documents, the US Olympic Committee has left the word in, and delegates deciding whether an athlete is eligible for international and elite competitions, like the Olympics, to the National Governing Body for each Sport. Increasingly, athletes are seeking to supplement income with sponsorship agreements. So, what are the legal issues that arise when training a sponsored athlete?
Why does this matter for you as a coach?
Because training sponsored athletes no longer means that athlete is not eligible to compete as an “amateur” or as part of the US Olympic team the rules for sponsorship are complex. Because of the interrelationship between the IOC, USOC, International governing bodies, and national governing bodies, you should have at least a general understanding of the rules of the National Governing Body for the sport for which you are coaching an athlete. You should also review the ethical code for any professional organization of which you are a member because many of these will comment directly on matters of corporate sponsorship, and the ethical standards to which you, as a coach, will be held responsible.
So what is a sponsored athlete?
A Sponsored athlete is an athlete that receives compensation for their endorsement of product or service. A Sponsorship agreement is usually an agreement between an athlete and a corporate entity. Payment under a sponsorship agreement is generally made directly by a company, although indirect payment through discounts, accommodation or other means do occur regularly. Compensation can take the form of money or product.
You may be very involved in an athlete’s training, and career, and while you may want to be involved during negotiation of a sponsorship agreement, this may not be wise legally speaking. It is not wise – indeed, it is a conflict of interest – if you will also gain any kind of financial benefit from their involvement in signing the agreement.
You should also note that any agreement signed by an athlete may include a non-disclosure agreement which won’t allow them to discuss the terms with you. It may be wise to ask your attorney for a non-disclosure agreement that you can utilize with your client-athletes – this may allow for more forthright communication with your sponsored client-athletes.
Be wary of offering “legal” advice to your athlete – you are in a position of authority in relation to the athlete by virtue of your position as coach, so you need to be especially careful not to unduly influence them. Once again, be wary of the risk of a conflict of interest between what you want and what is best for your client-athlete. Encourage the athlete to find an attorney-advisor who will be able to assist them with contract and sponsorship agreement negotiations.
While a contract cannot legally obligate someone (a 3rd party) who is not party to a contract, it is important to understand if any of the contracts signed by the athlete you coach impact you in anyway. This could include the clothing they are required to wear both in training or in competition, their competition schedule, sponsorship related appearances that may interfere with training sessions, or any consultation they have agreed to make prior to making future decisions about their athletic career. All of these examples could directly impact your coaching relationship with a sponsored athlete.
Your ethical responsibilities to ensure a safe environment for your client-athlete still apply, as do all of your other ethical responsibilities as a fitness professional. What you are not required to be is all things to your client-athlete. You are there to coach them, not to give them legal advice about sponsorship agreements.
Coaches can also be subject to similar rules from governing bodies as athletes – especially competing at the international level – in terms of how sponsorships are governed, what they can be for (some governing bodies detail the brand that can provide product sponsorship based on other corporate agreements), and any limitations on the amount of money permitted to be involved in a sponsorship agreement. There are incredibly detailed rules for some sports about how large sponsorship acknowledgements can be on uniforms, and even the companies an athlete or coach can accept a sponsorship offer from. As with all legal contracts and agreements, make sure to have your own legal advisor review the agreement prior to signing to make sure you understand your responsibilities, and any likely risks or liabilities that it may present.
Athletic coaches have become more involved in social media over the last few years. This is significant in the context of this discussion about sponsorship because it brings up the need to comply with FTC disclosures and declaring any financial interest in social media posts you may make about a company, a good, or a service. If you are coaching a team that has multiple sponsored athletes, they may benefit from inviting an advisor, especially an attorney familiar with sports law and with social media, the FTC, and sponsored posts who can provide general information to both athletes and coaches about the responsibilities and disclosure requirements.
In many ways coaching and training a sponsored athlete is no different from training any other kind of athlete. However, sponsorship agreements inevitably bring commitments, responsibilities, and requirements that can practically impact the client-coach relationship. A sponsorship agreement is, by its nature, a legal agreement, and as a fitness professional and a coach you should be aware that your client-athlete must take any such agreement seriously.