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IEG Sponsorship Report: Centerfold

Publication: IEG

Working With Sales Agents: A Guide for Agencies and Properties

Lack of selling expertise, contacts and time are among the reasons rightsholders choose agencies to sell deals on their behalf. With no industry standards to guide practices, sponsorship agencies and rightsholders are left to figure out the best methods themselves. Below, IEG SR details key elements that both sides should consider as the forge relationships.

New vs. renewal deals

Sponsorship sellers come from two camps: Those who think renewals are easier; and those who think it takes the same amount of work through ongoing servicing. The latter group typically will not offer commission reductions on renewals. However, some agencies will shave up to 10 percentage points off their commissions for renewals. For example, Emery generally seeks 10 percent commission on renewals, compared with 20- percent for new deals.

Another renewal scenario

The agency renews a sponsor the property originally signed-but at a higher fee. In that case, the agency’s full commission would apply to the incremental revenue, said Jim Erlick, president of The Erlick Group. His firm, which represents Broadway theaters and other properties, generally receives 15 percent to 20 percent commission on new deals.

Length of relationship

Agencies prefer to work on a long-term basis with properties-and some offer lower commissions in later years of a contract to incent the relationship. However, some properties are unable to strike multi-year deals because of annual budget cycles or boards of directors that shy from long-term contracts.

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