CLOSEClose Law.com Menu
 
X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.
Sports and corporate sponsorship have walked hand in hand for some time — often very successfully. Even the sportsmen of ancient Greece weren’t true amateurs; winners received all sorts of awards, from precious metal to oxen. In recent games, the heated rivalries of competing corporate sponsors seem to have drawn the spotlight away from where it belongs — on the athletes. Some of the most hard-fought battles over Olympic marketing turf have involved “parasite” or “ambush” marketing. At the 1996 Atlanta Olympics, Nike erected huge billboards around Olympic events that had been sponsored at great expense by Reebok. It also created Nike Town, a gigantic “tent city” covering a car park on the edge of the hub of Olympic activity, Atlanta’s Centennial Park. While Reebok would deny it, this is a prime example of “ambush marketing” — when a company associates itself with a major event in its marketing campaigns without putting up the cash to be an official sponsor. The organizers of the Sydney Olympics are determined to keep ambush marketing out of the news. The International Olympics Committee (IOC) Marketing Director, Michael Payne, stated on a visit to Sydney in early July that the IOC had learned from the “disastrous” experience of ambush marketing at the Atlanta Olympics, and that Olympic officials were confident the practice would be combated at Sydney 2000. However, certain incidents leading up to the Olympics indicate that the ambushers are far more sophisticated this time. THE TROPHIES OF WAR In a gradual change in policy over the years, the IOC has encouraged the corporatization of the Olympics. The 1984 Los Angeles Olympic Games were the first to generate a profit, and the games’ organizing president, Peter Ueberroth, was named Time‘s “Man of the Year.” In the 1992 Barcelona Olympics, the IOC allowed professional athletes to compete for the first time — the highest-profile athletes being basketball’s “Dream Team” from the United States. The Olympics are now the top-tier dish on the multi-billion dollar sports sponsorship menu. The Sydney Olympics marketing pie is rich and tasty, and corporations are prepared to slug it out for a nice piece. Some corporations have chosen to compete for the marketing spoils as Olympic sponsors and have signed contracts that define their marketing boundaries. The Sydney Organising Committee for the Olympic Games (SOCOG) indicated in mid-July that it had total sponsorship revenue of $445 million ($A756 million). Other Australian corporations believe they can compete effectively without the capital outlay required to be a sponsor. Naturally, the Olympic sponsors who have contributed to the SOCOG “war chest” want to be protected from potential ambushers. SOCOG’s main weapons are the various pieces of Australian State and Commonwealth (federal) Government legislation designed to protect official Olympic sponsors. “ANTI-AMBUSH” LEGISLATION The various pieces of legislation now in place seem to have a reactive, rather than proactive theme — the legislators have reacted to the negative Nike incident at the last Olympics and have hedged against variations on the Nike theme. They don’t appear to have turned their minds to anticipate new types of ambush. The Olympic Insignia Protection Act 1987 is largely limited to the protection of the Olympic rings. It is pretty much superseded by the more recent Sydney 2000 Games (Indicia and Images) Protection Act. However, it was successfully used in favor of Sydney’s official Games bank, Australia’s Westpac Bank — which paid $29 million ($A50 million) for the privilege of sponsorship), when SOCOG forced National Australia Bank to remove Olympic rings on display in its branches. Westpac has not been so lucky regarding another bank’s marketing activities. Westpac was under the impression that it was the only bank giving customers the chance to win Olympics tickets. It recently learned that the Commonwealth Bank was also doing so — legally. It teamed up with Visa (an official Olympics sponsor) in running a Games tickets competition for customers who signed up for a Commonwealth Bank Visa card. As Visa’s revenue depends upon its relationships with a broad range of financial institutions, Westpac would be hard-pressed to convince a court that Visa shouldn’t have the right to promote its product through a non-sponsor bank such as the Commonwealth. The Sydney 2000 Games (Indicia and Images) Protection Act 1996 is an expansion of the Olympic Insignia Protection Act 1987, and prohibits any visual or aural representation suggesting a connection with the Games. Unauthorized parties must not commercially use certain indicia (words such as “Olympic,” “Sydney 2000″ and “Summer Games”) and images, or suggest the user is a sponsor or provider of support for the Games without the consent of the relevant committee. A complete list of the prohibited indicia and images can be found at the copyright notice link on the Sydney 2000 official Web site (http://www.olympics.com/). Both of the above pieces of legislation are solid and sensible, but not too effective outside certain specific, factual circumstances. This legislation was pre-Atlanta, and didn’t have the hindsight of the Nike experience. Recently introduced legislation is more effective, taking into consideration “Nike type” ambushes. NO NIKES The Homebush Bay Operations Act 1999 and the Olympics Arrangements Act 2000 are designed to protect against a recurrence of a “Nike type” ambush — and contemplate a number of variations on that theme. The former gives the Olympic Coordination Authority (OCA) a broad range of powers regarding activities in the Homebush Bay area — one of the main Olympic venue areas — including advertising and marketing. It prohibits selling or hiring articles, providing services, using audio or video equipment for a commercial purpose, or advertising in the Homebush Bay area without the consent of the OCA. The latter act operates from the beginning of September to Oct. 29 2000, and only allows paying sponsors access to advertising space in and around all Olympic venues, in the six “Olympic Live” sites around the city — where giant screens will simulcast broadcasts during the Games — and major transport routes. It also prohibits aerial advertising within sight of an Olympic venue or facility. The legislation provides harsh penalties for non-sanctioned advertising in any form within designated distances of Olympic venues. This theme is continued in the currently operational State Environmental Planning Policy No. 38, which prohibits advertising or erecting advertising structures in similar areas prior to the operation of the Olympics Arrangements Act 2000. Australia’s existing competition laws (contained in both state and commonwealth legislation) may also be useful as a weapon against ambush marketing in that they permit a claim analogous to passing off by prohibiting misleading and deceptive conduct and making representations of false sponsorship, approval or affiliation. NEW TACTICS The “anti-ambush” legislation is cleverly drafted to prevent against Nike-type ambushes and variations on that theme. However, this type of ambush is no longer original. The two most effective types of ambush of the Sydney Olympics have emerged from an unexpected source — existing sponsors, such as when an authorized advertiser (such as a sponsor) stretches the bounds of its authorized marketing territory, or when a non-sponsor uses a bona fide method of associating with the event, such as sponsoring individual competitors. The current Olympic Web site dispute is an example of the first strategy. Leading up to the Games, SOCOG gave IBM exclusive rights to run the official Sydney Olympics Web site. IBM developed a slick Web site, appropriately named olympics.com. However, ostensibly because IBM failed to provide Australia-specific content on the site — such as information about the Australian Olympic team — the Australian Olympic Committee (AOC) and the official Australian Olympics television broadcaster, Channel Seven, have joined to create a rival Internet site — http://www.olympics.com.au/. IBM doesn’t have an obvious legal remedy to shut down the Web site. The IOC recently served breach notices via a New York legal firm against 1,800 domain names using the word “Olympic” (pursuant to U.S. federal legislation, the Anticybersquatting Consumer Protection Act of 1999). However, it is doubtful whether it would question the right of a national Olympics committee, such as the AOC, to use the word in its Web address. Even if it did, it would have a jurisdiction battle on its hands regarding shutting down a “com.au” domain name. In Channel Seven’s defense, the content of the two Web sites are different — the SOCOG/IBM site will provide detailed information, such as real-time event results, while the AOC/Channel Seven site will focus on specific athletes and their day-to-day lives in the Olympic Village. IBM is unlikely to take any comfort from this — it is almost certain that the rebel site will divert traffic from the official site because it is the only Web site that Channel Seven will promote during its exclusive Australian broadcast. As a sponsor, Channel Seven has been a veritable champion for protection against ambush marketing; recently its general counsel said, “For official Olympic broadcasters, such as the Seven Network in Australia � the major concern is the possibility of non-rights holders broadcasting within their territory.” Channel Seven has a much more “laissez-faire” view of Internet territory. While it does seem desirable for a Web site to be available to provide specific team information on the host country’s team, it still seems to impinge on IBM’s turf. Internet rights and boundaries are obviously far less established and regulated than television broadcast rights. Channel Seven is exploiting this to its advantage — while still espousing anti-ambush policies in the television space. If the shoe were one the other foot, Channel Seven would be unlikely to allow IBM to broadcast Olympics-related broadband streaming video, for example, simply because Channel Seven’s coverage had a perceived lack of certain material. THE HUNTER BECOMES THE HUNTED Adidas’ Olympic marketing approach is a good example of the second ambush strategy. In a Shakespearean twist of plot, the victorious but villainous Atlanta ambusher, Nike, is now an official SOCOG sponsor — charged with providing uniforms and sporting equipment to the athletes of the Australian Olympic and Paralympic teams. The original sponsor, Reebok, pulled out in December because SOCOG allegedly issued its staff uniforms made by a rival company. Reebok has begun proceedings in the New South Wales Supreme Court for breach of contract and is seeking damages, interest and court costs. Nike may now have to decide whether to protect its position as an official sponsor with the same verve as it flouted Reebok’s position in Atlanta. This time Nike’s rival may be Adidas. Adidas is the official clothing outfitter of the U.S. Olympic team. Apparently not satisfied with this, Adidas seems bent on gaining a marketing advantage from the Australian Olympic hopefuls it sponsors. In June, Adidas unveiled a new advertising campaign titled “The Road to Sydney,” consisting of 12 episodes of television ads starring 10 Australian Olympic athletes. Prominently wearing his Adidas full-length swimsuit is Australian swimming champion Ian Thorpe, who is expected to be one of the Games’ superstars. The official Olympic swimsuit sponsor is Speedo. However, in a move that has angered Speedo, the AOC has ruled that Thorpe — and other athletes — can wear the rival swimming suits in Olympic events on the basis that bodysuits are “special equipment.” Under IOC rules, athletes have the freedom to choose “special equipment” and are not subject to sponsorship agreements. Under IOC rules, non-official sponsors are not permitted to use Olympic athletes in advertisements during the two-week Games period. Adidas seems to have made contingencies for this, having indicated that it intends to advertise on the Seven Network over that time. SYDNEY OR BUST! It is unlikely that the Sydney Olympics will see another large-scale “Nike type” ambush, especially in light of the legislation introduced to prevent it. However, the ambushers are now more sophisticated and have developed new techniques to exploit Olympics marketing opportunities. The legislation doesn’t contain any relief for official sponsors affected by the new ambush strategies. As the Olympics draws closer and the stakes rise, we may see official sponsors employ clever counter-attacks to these strategies. Prepare for some Olympic fireworks! OLYMPIC LINKS � International Olympic Committee – http://www.olympic.org/ � Australian Olympic Committee – http://www.australian.olympic.org.au/ - � Official Sydney 2000 site (IBM/SOCOG) – www.olympics.com � Australian Olympic Committee/Channel Seven site – www.olympics.com.au � Australian Broadcasting Corporation – http://www.abc.net.au/olympics � NBC Olympics coverage – http://www.nbcolympics.com/

This content has been archived. It is available exclusively through our partner LexisNexis®.

To view this content, please continue to Lexis Advance®.

Not a Lexis Advance® Subscriber? Subscribe Now

Why am I seeing this?

LexisNexis® is now the exclusive third party online distributor of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® customers will be able to access and use ALM's content by subscribing to the LexisNexis® services via Lexis Advance®. This includes content from the National Law Journal®, The American Lawyer®, Law Technology News®, The New York Law Journal® and Corporate Counsel®, as well as ALM's other newspapers, directories, legal treatises, published and unpublished court opinions, and other sources of legal information.

ALM's content plays a significant role in your work and research, and now through this alliance LexisNexis® will bring you access to an even more comprehensive collection of legal content.

For questions call 1-877-256-2472 or contact us at [email protected]

 
 

ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.