SPORTS MARKETING

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Sports Sponsorship & the Law

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Section 7.  What is ‘ambush marketing’ in sport and does it represent perfectly legal and normal competitive behaviour?

Jamie Singer (Partner) and Adam Leadercramer (Associate), onside law, London

Introduction

In the sporting context, ‘ambush marketing’ is generally described as any unauthorised association by a company with an event, team or individual without paying any fee in respect of that association. With the huge revenues generated by sport , and in particular the sale of commercial rights relating to sport , it is no surprise that ambush marketing is viewed by rights holders and authorised ‘rights exploiters’ as an invidious and very real threat to their commercial interests.  

This article intends to examine how ambush marketing has manifested itself in the sporting world and the measures that rights holders such as FIFA and the IOC have put in place or relied upon in order to prevent it. It also analyses whether those measures unfairly constrain what would otherwise be perfectly legal and normal competitive behaviour.

What is ‘ambush marketing’?

Although the definition set out above is perhaps the most common way of describing ambush marketing, other practices have been said to be included within the term. Verow et al have suggested that the practice could also be deemed to include those situations where there is a genuine ‘commercial’ conflict of rights between two parties in relation to an event. For example, this would include instances where, through no malicious intent, a competitor has a personal sponsor which conflicts with an ‘event sponsor’ procured by the rights holder .

Equally, situations might arise where a small company uses a trademark relating to an event without knowing that it needed authorisation to do so .

However, neither of these are ambush marketing in the commonly understood sense of the term. A clear strand that runs through sporting examples of ambush marketing is intent on the part of the ‘ambusher’ to exploit the goodwill in the relevant event (and in many cases diminish the goodwill enjoyed by a competitor). An innocent conflict between sponsors for example, would not be due to the intent by one sponsor to gain unfair commercial advantage over another, but rather a failure on the part of the rights holder to contractually ensure that it was able to offer its own sponsors a ‘clean’ event.

This requirement for intent is recognised by rights holders and official event sponsors in their descriptions of ambush marketing. Norman Mandel of Coca-Cola, for example made the point emphatically: “Let’s get this straight. Ambush marketing is not clever marketing.

It is stealing, it is thievery”  – i.e. companies engaging in ambush marketing have the mens rea to cause harm to the rights holder/official sponsor ‘victim’. Similarly, others choose to describe the practice as ‘parasite marketing’  – i.e. marketing that adds no value (commercial or otherwise) to an event and which is able to exist only because of the hard work and intrinsic rights of others.

A distinction should also be made between ambush marketing and (a) counterfeiting; and (b) ‘opportunistic’ marketing. The former involves the production of ‘official’ merchandise without paying the appropriate licence fee to the rights holder.

Counterfeiting is clearly an unlawful infringement on rights holders’ intellectual property rights. Rather than seeking to exploit an association with an event or an inference of an association with an event, the counterfeiter is purporting to actually be the rights holder (or a partner or affiliate of the rights holder).

‘Opportunistic marketing’ involves no direct association with an event, but takes advantage of particular circumstances surrounding an event to promote a brand. A good example of this was a 1995 “I bet he drinks Carling Black label” advertisement which showed Tim Flowers, the Blackburn goalkeeper swigging from a can of Carling in the dressing room (after Blackburn won the Premier League) while clearly wearing the branded top of sponsor McEwan.

Practices that might be included in the term ‘ambush marketing’

Although the specific practices that fall within ambush marketing are constantly evolving, as marketing executives think up new and ingenious ways to skirt around the margins of the law, examples of ambush marketing in relation to an event can be split into three broad categories.

(i)     At-event ambush marketing

This is where the ambush marketer uses its association with an individual sportsperson, team or sponsorship catergory to create the impression that it is associated with the event itself and, in most cases, divert goodwill away from a competitor who is actually an official sponsor. This is to be distinguished from the ‘innocent’ commercial conflict described by Verow et al above; here there is a clear intent on the part of the ambush marketer to be seen to be an official event sponsor and/or diminish the brand exposure of a competitor.

A well-known example of this was Linford Christie appearing at a press conference at the 1996 Olympics wearing Puma branded contact lenses, despite Reebok being an official partner of the games. However, this type of ambush marketing can also take more subtle forms such as Kodak sponsoring the US track team at the 1984 Olympics when Fuji were an official games sponsor (Fuji then sponsored the US swimming team in the 1988 Olympics, despite Kodak being an official sponsor).

 (ii)     Outside-event ambush marketing

This is where the ambush marketer does not sponsor a competing team or athlete (or any other thing inside the stadium) but exploits factors outside the stadium walls to suggest association with the relevant event. This may be achieved by handing out branded merchandise to spectators on their way into an event, purchasing advertising space in surrounding areas or taking control of nearby buildings and festooning them with branding.

This occurred in the infamous ‘Leeuwenhosen Incident’ at the 2006 FIFA Football World Cup, where Bavaria Brewery provided Dutch fans with branded leeuwenhosen, which they were required to remove before entering the stadium due to Budweiser’s official sponsorship of the event.

(iii)     Broadcast ambush marketing

This is where the ambush marketer uses television, radio, online or print advertising to suggest an association with an event and/or denigrate a competitor’s involvement in the event. In some cases this will be done with subtle or oblique references to the event, in others through more overt messaging. For example American Express released a television advert around the time of the 1994 Winter Olympics with the strap line “If you are travelling to Norway this winter, you will need a passport, but you don’t need a visa” when Visa was an official partner of the games.

It is within these three broad categories that ambush marketers tend to operate. In deciding whether to pursue an ambush marketing strategy a marketer will (or should) be keenly aware of the legal framework that it successfully needs to traverse. Law makers face the tricky task of balancing the need to protect the commercial interests of rights holders and official sponsors with the necessary require

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