Bonus Cover diagram
Bonus Cover diagram
Bonus Cover diagram

Overview

SPORTS INSURANCE  

We are specialists in sports finance, delivering accurate, effective and innovative structured finance products to businesses operating in the sports industry, with a wide range of products and services to support any business exposed to risk.

  1. BONUS COVER

Performance Bonus Cover has an ever-increasing role in sports today, as contracts become more performance based, based on the need to deliver ROI. If you’re a rights holder, brand or agency, you can offset the risk of performance-linked bonuses both flexibly and cost-effectively.

Example: Premier League Sponsor Bonus

The Risk

A brand had a sponsorship agreement with a top Premier League club, which included a £2m bonus to be paid if they qualify for the Champions League.

The Solution

We insure the brand for the potential payout at 25% (£500k). That fixes the brand’s budget whether they qualify or not – and means the remaining £1.5m can be saved or reallocated in the marketing budget.

Though the price of insurance can change based on the team’s performance, we agree a deal with the brand in under 24 hours, minimising any price fluctuations.

The Benefits

The brand fixed its budget at a realistic price, and is able to reallocate the saved budget.

 

  1. CONTRACT NEGOTIATION

SportsRISQ can help you add insight and value to sponsorship negotiation through a better understanding of the price of bonus insurance. You can use it as leverage to lower the cost of the overall deal.

Similarly, we also help football clubs and rights holders maximise revenue from sponsorship or endorsement deals through contract negotiation using performance bonus schedules. And in some cases, we can source finance to buy these contingent revenues from them.

Example: Brand athlete endorsement negotiation

The Risk

A brand wants to minimise and fix their sponsorship payment to a top golfer by introducing a bonus if he wins a Major, but they aren’t sure how it works or affects costs. They have a limited budget of £1m (£900k fee/£100k bonus) for the entire deal.

The Solution

We advise the brand on a bonus structure that costs them £200k to insure a £2m payout. By offering a large bonus, the brand can negotiate down the standard fee from £900k to £700k. On top of that, they can insure an attractive bonus of £2m for a fixed cost of £200k.

The Benefits

The brand negotiates a saving of £100k through a total cost of £900k (£700k + £200k), and they can increase their player incentive based on a stretched budget of £2.7m (£700k + £2m).

For more information, please contact Max Hamilton:

Email: mh@risq.uk

or call: +44 20 7151 4800

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