Sports Facility Agreements: A Financial Snapshot

For sports fans, our focus is mainly on the teams, the athletes, and the outcomes. However, one of the most crucial parts of the game are the venues and facilities used to host a given match. There are many elements that are considered before finalizing facility deals for sports clubs and sporting events. Facility contracts are generally drawn up between the facility operator and team that will be utilizing the facility for its tournaments. However, in cases where the facility deal is done with a committee or conference, seen more frequently in tournaments such as the Olympics, there are several different ways a facility deal could be drawn up. One of the more common ways to create a facility deal between the facility operator and the committee is through a financial partnership for the duration of the tournament. This blog will provide insight on a typical financial breakdown of such a partnership within a facility contract.  There are three main issues that are considered and agreed upon by parties within the four corners of a basic facility contract; financial/economic, technical/operational, and liability considerations.  Although no two facility contracts are the same, the financial and economic considerations of such contracts have the highest degree of variability.  In the cases of tournaments such as the Olympics, creating a financial partnership between the committee and the facility operator is one common method that can be utilized. A breakdown of this portion of the facility contract would detail the distribution of net revenue as well as the division of the responsibility surrounding the expenses. From a financial standpoint, the contract would detail the...