Marketing in the Metaverse: Sponsorship Deals for Stadiums, Arenas and More | Pillsbury – Internet and Social Media Law Blog

Every year, professional sports franchises introduce new marketing tactics and new sponsorship models to increase their revenues: new equipment, new stadium/arena logo locations and jerseys, not to mention a plethora of online interaction opportunities. As the concept of the Metaverse seeps deeper into the minds of fans, it’s no wonder there’s a lot of buzz around this futuristic environment. But even as professional sports franchises announce their own forays into the metaverse, organizations around the world would do well to consider how this bifurcation of the sports experience (seeing the venue in person or watching the metaverse) creates an entirely new world of marketing revenue.

Submit your favorite sports site. Think of the tens (if not hundreds) of thousands of people who see sponsored content in a stadium. Then think about the number of physical signs and screens with rotating promotions on the site. But what about the metaverse? When sports teams integrate their sites into the metaverse, should marketing materials be provided as well? Or could a completely different spectrum of enterprises be represented at the Metaverse stage? Alternatively, if the sponsor at the “physical” stage wants to continue the relationship in the Metaverse, should they pay more, especially considering the number of additional people that will potentially be exposed to this branding? But what about territorial considerations? Will the organization be interested in the flexibility (if technology permits) to create ads targeted to the region?

Adding virtual twins to real locations, which should not be limited to a single reflection of the physical location, is likely to expand sponsorship opportunities exponentially; organizations would do better to start laying the groundwork now to maximize revenue streams later.

Who knows how far the sponsorship goes?
The main consideration is whether sports teams want the same sponsors to move from the physical to the metaverse. If the answer is yes, then subsequent conversations with sponsors will focus on rewards – after all, sponsors shouldn’t be featured in two places for the price of one. If the answer is no, the conversations are admittedly more difficult as contracts go back for negotiation, the organization needs to be more careful when describing the scope of sponsorship. Keep in mind that any geographic considerations will also be a pricing factor (and any geolocation restrictions may affect where content is available).

As thick as the flurry of buzzwords or how much hype rages when it comes to the nascent form of the Metaverse, much of how it will all work is still unknown. Specifically, this means that now not it’s time to hurry, talk to sponsors and start writing contracts. Instead, it’s time to get together with the business, legal, and marketing departments of the organization and start developing long-term sponsorship (and outsourcing) strategies. Here are some things to consider:

Physics vs Metaverse: Is the goal for current backers to subscribe to the physical site and the Metaverse site? If so, what increase in fees would the organization charge if the sponsor wanted their logo and brand to be displayed in both locations? If the answer is no, how will the supplier deal with this rambling situation?

View your referral contracts now: Especially if an organization is looking to bring in new sponsors to the Metaverse, start soliciting deals now to understand how current sponsorship deals can complicate things. For example, how is sponsorship determined? Is Company X the “Official Matchday Drink Sponsor” or your team’s “In Stadium Drinks Sponsor”? In the first case, the sponsor has a stronger argument that their sponsorship is not tied to physical location. But also see how the placement of the brand is described, are there any details about the type of signage that will be provided? Along with reviewing sponsorship contracts, organizations should review their brand licensing agreements to understand how advertisements/brands/logos can be replicated in the metaverse. Enforcing IP protection (and respecting contractual restrictions) will help protect the organization when it (and its content) enters the metaverse. Remember, understanding of the regulators of the metaverse will evolve over time, so continue to monitor the impact of the laws on the activities of the organization in the metaverse. For example, as different jurisdictions attempt to influence the metaverse, advertising compliance requirements may change.

Upcoming contracts: If there are sponsorship contracts that are in the process of being negotiated or need to be renewed, and the organization is not yet ready to start talking about the Metaverse, consider how you can ensure maximum contract flexibility going forward. For example, a shorter term means that the organization is more flexible in adapting as it develops its understanding of the metaverse. A clear description of the relation to the physical location will also provide flexibility for subsequent reference to the metaverse.

With so many unknowns, it would be a daunting task for the company to write a complete contract for the Metaverse on its own. So don’t. Instead, consult with lawyers familiar with contracts and technology. As the contractual nuances associated with the metaverse continue to evolve, companies are encouraged to move forward in understanding the legal and financial implications for their business. In particular, organizations that are considering the future implications of their current sponsorship contracts will be well positioned to maximize future sponsorship revenue. Ultimately, sponsors want to be protected, as do organizations and websites. Thinking about these defenses now can make these exciting first steps into the metaverse easier.

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