A guide to rights protection at major sporting events: part 1 – identify, prioritise and pre-empt risk

Published 16 September 2014 | Authored by: Nandan Kamath, Roshan Gopalakrishna, Nihal Zachariah

In this three part guide, Nandan Kamath, Roshan Gopalakrishna and Nihal Zachariah deconstruct, analyse and exemplify of the seven distinct steps of rights protection programmes, which are put in place to protect the rights holders of today’s major sporting events.

In Part 1, the authors introduce the topic and look at the first two steps: identifying core rights, and contracting early with key parties.

 

Introducing rights protection at major sporting events

The commerce of sport has never been more alive. International sporting events such as the FIFA World Cup, the Olympic Games, the ICC Cricket World Cup and the Rugby World Cup captivate large global audiences, and entice high profile sponsorships and partnerships.

While major sporting events offer unparalleled platforms for companies and brands to gain global visibility, it is quite common to witness a number of companies and brands actively seeking to associate with the goodwill of such events without securing any official sponsorship or commercial association rights, i.e., through the means of what is often called ‘ambush’ or ‘guerilla’ marketing.

Most approaches to maintaining the integrity of sponsor investments involve the implementation of rights protection programmes (“RPP”).

What is a rights protection programme?

Simply stated, an RPP is a systematic plan of action to protect the investment of and the exclusive rights granted to the sponsors, partners and licensees of an event.

In this context, the RPP is designed to address amongst others, broadcast and proprietary content piracy, commercial abuse of an event’s intellectual property, and agile ambush marketing campaigns, on online, offline as well as on-ground platforms.

In practice, a well formulated RPP relies on the implementation of pre-emptive practical steps (registration of marks, public education, advance communications to sponsor competitors, brand and content guidelines), careful contractual drafting (host agreements, team participation agreements, ticket terms), pro-active intellectual property protection (monitoring counterfeit merchandise and digital platforms, live stream protection) and active collaboration with authorities within the host nation.

While an effective RPP has become essential for the successful conduct of a global sporting event, RPPs can potentially end up being overly restrictive and seriously impact the public’s ability to interact with and enjoy the event freely. If a major sporting event is to achieve all the positive outcomes that it aims for, the RPP must be thoughtful, balanced and responsibly managed.

 

A seven step guide to RPP

This step-by-step guide offers a practitioner’s perspective on executing an RPP for a major sporting event. In doing so, we draw on experience in advising various governing bodies hosting both domestic and international sporting events in the Indian sub-continent.

 

Step 1 – Identify and prioritise core rights over collateral rights

As a first step, it is essential for an event owner to clearly identify and prioritise the core properties that it cares about the most. These are to be distinguished from the collateral properties and rights that might not be as central to the commercial proposition of the event.

Many event owners begin with the approach that anything of commercial value is worth protecting, that any and every leakage should be considered a violation. Looking back and looking forward, it is easy to see how this expansive view may have some merit – we have a rapidly changing technology landscape (who could have imagined 10 years ago that there would be something called an official mobile app?) and the continually evolving sports business model (maybe the next big thing is a premium ticket to “take a selfie with your favourite star ” at the game?).

Focus on core rights

However, the risk of this approach is that it can lead to a lack of focus in the RPP structure, monitoring and enforcement, especially when working with limited budgets. It is, therefore, essential to first identify and then prioritise the core business proposition that makes the event “work ”.

As a simple example, the use of event marks (logos, word marks, trademarks), participating player images, match tickets and audio-visual content are all extremely valuable and core inventory at the event. These properties are the tools used to demonstrate official association by sponsors and partners and broadcasters. If it were possible for these to be used without license or accountability by third parties, the current business model of the sporting event would be significantly compromised.

This is why RPP’s in current times inevitably protect against unlicensed use of the event marks and player images, counterfeit merchandising, black-marketing of tickets, online and broadcast piracy, and similar uses of the core rights.

Can certain violations be disregarded or taken advantage of?

Concurrently, there may be other acts and uses that are commercial in nature and could theoretically be considered to be violations. However, these might, after all, not be worth pursuing for a variety of reasons. Enforcement may be expensive, somewhat remote from the business proposition that makes the event work, might seriously impinge fan interaction and enjoyment and, importantly, may not be in the best interests of the event itself.

In fact, there may be some things the event owner may positively wish to encourage rather than discourage. What these are will vary depending on the nature of the event, the specific sporting discipline and the host territory.

For example, it may be to the event’s benefit to build publicity and fan engagement for the event by facilitating access to journalists and photographers into the stadium, permitting and encouraging fans to capture videos and images in tournament venues and posting them to social media sites, allowing free distribution of match schedules in the host city and other similar activities.

There will be other areas, such as the dissemination of live scores via mobile, off-tube live commentary and others that could fall into either bucket, after subjecting them to sensible criteria to determine whether they are indeed core or collateral.

In summary, the first step is to know what you really want to protect (“everything of value ” is not a good answer) as opposed to what you want to encourage. Knowing this sets the context for everything else – the RPP can then be structured to aggressively protect every part of the core property and to contemporaneously maintain vigilance in collateral areas for serious violations that could potentially impinge on the central value proposition.

 

Step 2 – Contract early with key parties to pre-empt risk

In the course of identifying the host country for an event and establishing relationships with the teams, players, broadcasters and sponsors/partners, the event owner has (and should take) the opportunity to contract with the main cast of characters (hosts, broadcasters, sponsors, partners, licensees, media, teams, players and local authorities where required) well in advance of commencement of the event in order to, among other things, pre-empt many of the risks associated with rights’ abuses.

If this is planned and executed well, a significant portion of the ambush marketing risk can be addressed well before the event has started. The contracts help participants understand and know the acceptable limits of their behaviours, accept risks and responsibilities and provide the event owner a remedial structure in contract with people and entities they have existing relationships with.

This means that not only are expectations set in advance but a number of emergent issues can also be handled in a timely manner while the event is in progress. For instance, well in advance of the ICC Cricket World Cup 2011, the ICC through the member participation agreement required participating teams to ensure that their squad members complied with certain rules in relation to any commercial endorsements around the event.

Further, an advance guidance note was issued to the players that illustrated the acceptable types of commercials and endorsements. This was useful, given the subtlety of the rule - even in the course of the event, players were allowed to appear in commercials in generic cricket whites or in other casual, formal or leisure wear, as long as they did not appear in their team’s national colours or implied a direct association with the Cricket World Cup or used any of the ICC’s proprietary names and logos. In a clear statement of intent, the ICC objected to a major Japanese electronics company’s use of a prominent Indian cricketer in an advertisement, while appearing in apparel similar to the team’s official kit for the tournament.1

Examples of the different types of contracts are as follows.

Host Agreements

The event owner and the host nation/cities of a major sports event often enter into agreements that set out each party’s rights, roles and responsibilities for the event. These ‘host agreements’ contain obligations and ‘host guarantees’ relating to ambush marketing.

For example, host city guarantees may include the host agreeing measures to prevent ambush marketing in host cities and at airports, providing for “clean zones ” around the stadiums that will be kept free of commercial activity such as advertising, hawking, etc. Of equal relevance is the ability of the event owner to get its intellectual property registered and protected under the host nation’s laws. For the FIFA World Cup Brazil, the World Cup Hosting Agreement imposed sizeable obligations on the host country governments to pass requisite legislation to protect FIFA’s intellectual property.2

Host countries may sometimes be required to assure the event owner that laws will be changed, if they don’t already exist, to protect against enumerated acts deemed to be ‘ambush marketing’. To draw from the recent FIFA World Cup in Brazil, while the existing Brazilian intellectual property and industrial property laws protected the names and logos of sporting events and organisations, FIFA gained further protection under the event-specific World Cup Law, which included amongst others things an express and wide definition of ‘ambush marketing’.3

The host may also be called upon to provide appropriate facilities and infrastructure and to enable all of the event organiser’s partners to exploit their rights without limitation. An example of this was recently in focus, with FIFA requiring that the Brazilian authorities permit the in-stadium sale of certain official partner beer brands during the 2014 FIFA World Cup, thereby temporarily revoking a decade-long ban on the sale and distribution of alcohol at football venues in the country.4

Agreements with Event Broadcasters, Sponsors and Partners

It is standard practice for an event owner to sell broadcast rights and also associate with companies to raise sponsorship revenues. Most often, these rights come with the sponsor’s expectation of “exclusivity ” as against competitors in the same business category. The scope of the exclusive rights granted to sponsors will vary depending on the event, the event owner’s approach and sponsor’s business.

In the context of broadcast rights, FIFA, as the event organiser, sells event broadcast rights directly in various territories, or through licensed companies or organisations.This is different from the ICC’s practice of selling global broadcast rights to its events to a single entity across platforms, with an expectation that the broadcaster would on-sell, sub-license and syndicate the content in various territories worldwide.

With respect to sponsorships, as an example, FIFA has adopted a three-tier sponsorship structure. Tier 1 consists of ‘FIFA Partners’ (who associate at a global level with all FIFA events and FIFA itself), Tier 2 consists of ‘FIFA World Cup Sponsors’ (who associate only with the FIFA World Cup globally) and Tier 3 consists of the ‘National Supporters’ (which are local companies based in the host country associating with the FIFA event). The ICC, on the other hand, has a set of Global Partners and then permits participating teams to have their own non-conflicting team sponsors.

In the course of contracting with event broadcasters, sponsors and licensees, a key contract provision obliges each of these entities to respect and acknowledge the exclusive rights of other sponsors and partners. As an example, if the official beverage partner wishes to distribute fan clothing while activating its sponsorship rights, it may be contractually obliged to order these from the official apparel partner at pre-set rates.

As the virtual underwriter of the event, the broadcast partner is usually treated as a ‘first among equals’ with respect to the various global partners, and is therefore provided with a few concessions. The broadcaster may carry advertisements of competitors of official event sponsors and partners on the event broadcast, but only after it has first offered the advertising slots at the same rates to the official sponsor in the category.

This enables the broadcast partner to recoup its significant investment, while also providing a release valve to ensure that the broadcaster is not unfairly handcuffed in its commercial dealings should the event sponsors choose not to extend their association to the broadcast. These contracts ensure an internally consistent commercial environment that concurrently protects the rights and interests of various commercial partners.

Agreements with participating teams and guidelines for squad members

Under participation agreements, event owners can require participating teams to ensure that they will, and that they will also procure their squad members to, comply with certain rules in relation to commercial activity (such as endorsements, events, license of player images, use of logos on clothing) during and around the event. For example, the ICC requires that for a week before and during the duration of the Cricket World Cup, players are allowed to appear in commercials only if they wear generic cricket whites or other casual, formal or leisure wear in the advertising but they may not appear in team kit or clothes of the colour of the team kit so as to avoid an association with the tournament being created. The Olympics has a more wide-ranging embargo on player commercial activity during the Games,5 and FIFA also has similar restrictions.

Event owners may also implement team apparel guidelines through the participation agreement, specifying the exposure that may or may not be given to third party brands on team clothing and kit. This is treated differently across different sports. While the ICC permits participating teams to display the logo of a principal sponsor (so long as this is not a direct competitor of one of the event sponsors) and the apparel manufacturer on playing jerseys, FIFA strictly prohibits participating teams from displaying any commercial logos apart from that of the official apparel manufacturer.6

The guidelines also can have stipulations on the visual appearance of player equipment, maximum logo sizes of recognised equipment manufacturers and third parties, if any. Some events even have restrictions on players bearing tattoos, or publicly displaying other products and paraphernalia, whether or not these convey commercial messages or branding.

The teams and players are the cynosure of all eyes during a tournament. By contracting with them, and limiting unwanted behaviours, a major element of ambush marketing risk can be effectively contained.

Media Accreditation

At practically every event, journalists from the media and press (including photographers) are given free access to certain areas of the host stadium. While access is free, these personnel are permitted entry into the venue after having been screened through a due diligence process, and having agreed to and signed accreditation terms, specifying what the event owner considers legitimate good faith journalistic practice, and what it does not.

Accreditation terms are especially important in today’s context - a still photographer with his high-end equipment could easily capture moving HD images that could compete with the official broadcaster’s rights and equally a reporter could commentate live from inside the stadium using his smartphone. Therefore, each accredited journalist, by category, is given a list of activities that are deemed legitimate (and thereby providing necessary safe harbours for journalistic activity) and those that are not (which could result in a lost of accredited access, among other remedies).

The terms of access to the media ensure that they can do their jobs without restriction but that they do not over-use the access they have been given so that they might avoid domains that might not be good-faith-journalistic in nature.

Ticketing Terms

A ticket provides leave to the purchaser of the ticket to enter the venue, subject to the terms under which it is sold. The terms and conditions of a ticket serve as an opportunity for the event owner to contract directly with the audience who will enter the stadium. Besides ensuring safety and appropriate personal conduct by stadium entrants, ticketing terms can also be tailored to resist ambush marketing attempts by restricting what spectators may wear and carry into event venues, by prohibiting re-sale of tickets and limiting use of the tickets as prizes in competitions or inclusion thereof in unlicensed travel/hospitality packages. However, care must be taken to ensure that the ticketing terms are not in breach of the host nation’s consumer protection laws, an issue faced by UEFA in relation to EURO 2012 co-hosted in Poland and Ukraine.7

In addition to the contracts above with the key stakeholders, the organisers of the Glasgow Commonwealth Games 2014 embarked on an innovative contractual solution to pre-empt certain ambush marketing risks around the event venues. The Games organisers contracted with major hoarding operators in Glasgow to provide their official sponsors with the first option to secure advertising on sites located not just within Event Zones, which were subject to legislative regulation, but also to outdoor media sites in their immediate vicinity.8

In summary, by establishing and implementing a well-conceived contractual framework that binds the main participants in the event – the host nation/cities, broadcasters, sponsors, teams, players, media and ticket-holders – the spadework for an effective RPP is already in place. In so far as ambush marketing is concerned, prevention is certainly far easier than cure.

That concludes Part 1 of this guide. In Part 2, we shall look at steps 3 to 5: educating the public, actively monitoring for breaches, and developing intelligent enforcement strategies.

 

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About the Author

Nandan Kamath

Nandan Kamath

Nandan is Principal Lawyer at LawNK, based in Bangalore, India. His practice specialises in sports, technology and media laws, with clients ranging from international and national sports federations, to leagues, teams, sponsors and athletes.
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Roshan Gopalakrishna

Roshan Gopalakrishna

Roshan is Counsel (Sports & Entertainment) at LawNK, a Bangalore based niche law practice specializing in sports, intellectual property, media and information technology laws. In addition, Roshan is also the Chief Legal Counsel at Copyright Integrity International, a world leader in the protection of digital and broadcast rights. Roshan is a graduate of the National Law School of India University, Bangalore.

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Nihal Zachariah

Nihal Zachariah

Nihal is an Associate at LawNK, a Bangalore based niche law practice specializing in sports, intellectual property, media and information technology laws. He graduated from Gujarat National Law University in May 2013 and has gained experience in the areas of rights protection assistance and commercial contractual drafting for a range of the firm’s clients, in the sports industry and outside.

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