• As with Broadcasting revenues, it is very common for the amount of a sponsorship contract to include bonus or additional payments that may depend on one or more of a number of factors as well as a regular annual amount payment due in one or more instalments each year at agreed times during the life of the contract.
• Advances against the future revenues under commercial contracts will involve detailed due diligence and specific requirements which are likely to include:
  • analysis of the underlying contract terms, including any potential variations to basic sponsorship amount;
  • a credit risk analysis of the contract counterparty;
  • ensuring moneys are paid into a secured account controlled by the investor and that the contract counterparty has acknowledged the arrangements; and
  • general additional provisions to ensure that the club complies with the terms of the contract and that it is not terminated early.

or an arrangement with the league or association that can be looked to as the single source of and basis for that receivable.