Outlawing Ambush Marketing

by DLA Piper

With the 2011 Rugby World Cup (‘RWC’) in New Zealand living up to its billing as the ‘Stadium of Four Million’, the Rugby Football Union and the RWC 2015 Organising Committee have a daunting task ahead of them in exceeding expectations for the next installment. With a reported revenue commitment to the International Rugby Board (‘IRB’) of £80 million, it is essential that every opportunity to create wealth to make good on the promise is exploited. Delivering a financially successful major sporting event is no easy task, with tales of woe being commonplace for poorly thought out events (see Montreal’s $1.5 billion debt from the 1976 Summer Olympic Games – which was finally settled in 2006). One element which can greatly assist in producing a major sporting event on budget is legislative assistance from government. Yet government is not always willing to lend this helping hand, notwithstanding that the benefits of doing so can outweigh the perceived inconveniences and stress on resources.

One of the main legislative areas in which government can assist those hosting major events is comprehensive protections against ambush marketing. These aim to guarantee to sponsors who are committing significant funds to the event that their brand will be the only one associated with the event in their respective brand category. This is a well-trodden area for those involved in delivering such events, with history full of clever marketing ploys by corporations looking to undermine their competitors.

Burton and Chadwick from the Centre for the International Business of Sport define ambush marketing as a, ‘…form of strategic marketing which is designed to capitalise upon the awareness, attention, goodwill, and other benefits, generated by having an association with an event or property, without an official or direct connection to that event or property.’ By way of illustration, the now infamous orange lederhosen promoting Bavaria Brewery at the 2006 FIFA World Cup stole the show where Budweiser had been the official sponsor.

Anti-ambushing laws are now a pre-requisite for a successful bid for the likes of the FIFA World Cup, both the Winter and Summer Olympic Games and the Commonwealth Games. Much has been written on the success of the London Olympic Games and Paralympic Games Acts of 2006; it is generally seen as being a major event which was relatively ‘ambush free’. The question arises whether governments should be more flexible in their ability to deliver protections for sponsors (such as ‘clean’ venues, rights of association, etc.) rather than solely instituting one-off legislation which expires upon the conclusion of the event.

This year, the Queensland Parliament, in preparation for the Gold Coast 2018 Commonwealth Games, passed the Commonwealth Games Arrangements (Brand Protection) Amendment Act, which was given Royal Assent on 27 March 2013. Similar to the London 2012 legislation, it bans the unauthorised use of specified references and images where the purpose is commercial or promotional, or would suggest a sponsorship-like arrangement with the Games. It also bans conduct which would suggest a sponsor relationship with the Games which does not exist, giving the authorities the power to seize infringing materials. Yet the provisions it creates automatically expire at the end of 2018 – thus leaving future governments to deal with the same issues once again when similar major events which are perceived to be meritorious of protection come along. Other governments have taken a more flexible approach. In New Zealand, lessons were learned from a failed subhosting bid with Australia for the 2003 RWC.

The reason behind it was the inability to provide clean, advertising free stadia, where Australia could. The Major Events Management Act 2007 (the ‘Act’) was instituted to remedy such problems for the future. The Act contains a host of protections and enforcement mechanisms against ambush marketing by association and invasion, as well as ticket touting. In order to activate the provisions of the Act, the Economic Development Minister, after consultation with the Commerce and Sports Minister, declares that an event is to be considered ‘major’. They must take into account whether the event will: (1) attract a large number of international participants or spectators and therefore generate significant tourism opportunities for New Zealand; (2) significantly raise New Zealand’s international profile; (3) require a high level of profession management and co-ordination; (4) attract significant sponsorship and international media coverage; (5) attract large numbers of New Zealanders as participants or spectators; and (6) offer substantial sporting, cultural, social, economic, or other benefits for New Zealand or New Zealanders. As a result of such forward-thinking legislation, the 2011 RWC was sufficiently protected through this and its related empowering legislation.

It remains to be seen whether the government of the United Kingdom will follow a similar path in time to protect rugby’s showpiece event in 2015. Initial reports stated that there would be no legislative protections against ticket touting at the next RWC – the Coalition Government citing the potential strains on police. This approach seems at odds with a survey released in June 2013 by the Sport and Recreation Alliance which stated that half of the National Governing Bodies in the UK believed that governments (both local and national) were providing inadequate support for their efforts to stage major sporting events. Still on the legislative agenda is the proposed Major Events Bill – which has the potential to pair the strength of the London Olympic protections with the flexibility of the New Zealand legislation. Whether it will be tabled is still unknown, with the failure to secure the FIFA World Cup potentially dealing a fatal blow. If it is, it will greatly assist the organisers in providing adequate and attractive safeguards to sponsors. This is turn will support their efforts in meeting their significant financial commitments to the IRB – while staging, and ensuring the future of what is, a world-class major event.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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