If all or part of the sponsor fee is allocated to the prize money, the sponsor applicant will not be able to enter as a participant in that tournament.
But, as long as the full amount of the sponsor fee is allocated to the organizer, the sponsor applicant may also enter that tournament as a participant.
Similarly, if a participant who has already entered the tournament wishes to apply for sponsorship, he/she can do so by allocating the full sponsorship fee to the organizer.