Music Funding 101

Having The Sponsor Spend The Money

Some bands are going to run into sponsors that want to participate, but the sponsors don't trust the band to spend the money correctly. If a funding rep is not involved to handle the money, and if the sponsor keeps asking to handle it himself, then the band will have to consider letting the sponsor do it. Although, I always say that you should keep your options open by being in contact with enough prospects on TalentFunding.com so that you can approach other sponsors when needed, like in this case. While it may not seem like such a bad thing (a sponsor wanting to spend the money) here are some possible downfalls:

First, the sponsor very likely will want to "stagger" the money in stages, so that he can see how the first stage goes before spending more. But if this "staging" is not spelled out in the contract in the beginning, the band may be agreeing to a sponsorship that sounds much bigger than it really is. For example, a sponsor may say he's going to spend $100,000 USD and that he wants to spend it himself. So the band signs up, and THEN hears that the sponsor wants to start out by spending only $20,000 to get things started (and he didn't say this in the contract). So, in effect, the band is just getting a $20,000 sponsorship and not a $100,000 one, because the band may never see the remaining $80,000. Thus, if the sponsor is going to be handling the money, then the contract should be VERY specific on when and what the entire amount will be spent on.

A second concern is that the sponsor may not know how/where to spend the money, any more than the band does. This happens in situations where the sponsor may be very knowledgeable in one area (say, medicine) and thus he thinks that the band-sponsorship thing can't be very complicated; so he tries to handle it himself. Well, if it's just something like buying T-shirts or banners, that's fine. But if it's putting together an elaborate marketing plan involving many media, especially radio, then it may not be a good idea. And it may also not be a good idea for the band to handle it, either. It may require a quarterback and/or a funding rep. /p>

The TalentFunding.com advice is that the band (which includes the rep) should always handle the money, unless it means losing the deal. This way it will be spent at once, or it will be delegated to a third party, but at least the band knows it will happen when it's supposed to happen. If the band has to consider a sponsorship which will only happen if the sponsor spends the money himself, then the band can ask how much smaller the sponsorship can be made so that the sponsor will change his mind. After all, there must be a number small enough so that the sponsor WILL trust the band to handle it themselves.

Sponsors who want to control the spending should be considered less desirable than sponsors who will allow band-spending. It's just one more item in the negotiation and search criteria that must be considered.

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