Posted on 01/06/2007 by
Sport is a billion dollar business these days and leading brand owners are turning to major events such as the Olympics and World Cups as part of their marketing strategies. Income for major events is primarily generated from corporate sponsorship, sale of television rights and tickets.
One of the largest global sporting events is the FIFA World Cup. The 2006 FIFA World Cup is reported to have brought in €5 million in sponsorship spending, with the event reportedly boosting Germany’s annual GDP by 0.01%.
Sportbusiness International recently reported that the ICC Chiefs expected profit of US $239m from the Cricket World Cup. In return for such high levels of investment, major sponsors expect strong protection for their brands. Other countries have enacted legislation for each event, such as that for the 2000 Sydney Olympic Games, the 2006 Melbourne Commonwealth Games and the 2012 London Olympics.
New Zealand is adopting an innovative approach and instead is enacting umbrella legislation to cover any number of events which arise in the future.
With New Zealand hosting the Netball World Cup in November 2007, Under-17 Women’s Football World Cup in 2008, the Rowing World Championships in 2010, Rugby World Cup 2011 and co-hosting the Cricket World Cup in 2015, it was not surprising to see the introduction of the Major Events Management Bill on 12 December 2006. The Bill is currently with the Commerce Select Committee, submissions were due on 5 April 2007.
With the Netball World Cup in November 2007, I am sure the Government will want this legislation in place by then.
The Major Events Management Bill is divided into 5 parts. The important provisions are found in Part II (protection for major events), Part III (permanently protected emblems and words) and Part IV (enforcement).
Part II is divided into 4 sub-parts covering declaration of a major event, ambush marketing by association protections, ambush marketing by intrusion protections and prevention of ticket scalping.
The Bill proposes that the declaration of a major event will be made by the Governor General by Order in Council made on the recommendation of the Economic Development Minister after consultations with the Commerce Minister and the Sports Minister. This section provides great flexibility around what could constitute a major event. This could cover a wide range of events, such as sporting, concerts, and cultural events.
The ability to identify individual events as a major event on a case by case basis under a single piece of legislation seems to be unique to New Zealand. Overseas, such events have usually been the subject of separate legislation on each occasion. Another interesting feature is that the major event does not need to be held solely in New Zealand.
One of the most creative methods used to associate a brand with an event, team or individual is ambush marketing.
Ambush marketing is where one brand pays to become an official sponsor and a third party, normally a competing brand, attempts to associate itself with the event even though it is not an official sponsor.
This occurred in New Zealand in 1996. It was the first case of ambush marketing in New Zealand and came before the High Court. The New Zealand Olympic and Commonwealth Games Association took action against Telecom for its advertisement relating to coverage around the time of the Atlanta Olympic Games.
The feature of the advertisement was the use in the same colours and special arrangement as the Olympic ring symbol of the word “ring”. The colours of the individual words were top line left to right: blue, black, red; and lower line: yellow and green (the Olympic colours). Telecom was not an authorised sponsor, Bell South was.
While finding Telecom unwise and the case finely balanced, the Court held that Telecom had not crossed the line into unlawful activity. The Court required that there be precision and representations that actually misled or deceived.
With such high sums at stake, ambush marketing is growing in popularity as brand owners try to gain promotional opportunity for their brands without incurring the cost connected with being an official sponsor.
The ambush marketer is not bound by any contractual constraints and by being cunning can get greater leverage and return on a much smaller investment.
There have been many examples of ambush marketing, despite legislative attempts to prevent it.
At the Sydney Olympics 2000 – use of Kathy Freeman’s image in this advertisement by Qantas. Qantas was a sponsor of Kathy’s but not an official Olympic 2000 sponsor. Qantas embarked on advertisements featuring prominent athletes. Australians thought Qantas was an official sponsor – it was not, Ansett was.
FIFA World Cup 2006 – Lufthansa planes with soccer balls painted on their noses (Emirates was the official sponsor).
In general, ambush marketing by association protection has been provided by existing intellectual property laws such as the Trade Marks Act 2002, passing off, the Fair Trading Act 1986 and the Copyright Act 1984.
However, there is generally no protection in existing laws against activities which amount to ambush marketing by intrusion.
The Bill attempts to control the intrusive form of ambush marketing by declaring “clean zones” around the event venues and stadia. All unauthorised advertising and street trading is prohibited in the clean zone during a specified clean period around the time of the major event. This clean zone includes the venue and areas close to the venue and extends to clean transport and routes which extend up to 5kms from the boundary of the clean zone. No unauthorised advertising can be undertaken that is clearly visible from the clean zone.
It is interesting to note that at the end of 2006 Queensland Parliament introduced the Major Sports Amendment Act ( No.2) 2006. This Act amended the Major Sports Facilities Act 2001. The aim of the Act is to restrict ambush marketing at major sporting events. The Act bans advertising within sight of Queensland’s major sports facilities. This includes sign-writing, aerial displays by aircraft and billboards on buildings ,banners or signs attached to aircraft, hang gliders, parachute, para-glider or similar device or a person suspended from any of these devices ; matter on a flag (other than a State or National flag) that has an area more than 5m2, unless written application is approved allowing the display. A maximum penalty of $52,500 is imposed. Advertisements that are of a more permanent nature displayed on a building or other structure are not banned.
In February 2007 the Victorian Minister for Sport announced the introduction of Victorian legislation outlawing the practice of aerial ambushing. This is likely as a result of the aerial blimp employed by Holden at the AFL Grand final. Holden were not a sponsor of this event. Events such as the AFL Grant Final, Formula One Grand Prix and the Australian Tennis Open will be protected events.
The greatest challenge in enforcement will be around the Bill’s attempts to curb representations made in a way likely to suggest to a reasonable person that there is an association between the major event and the goods or services or a brand or a person who provides goods and services at the major event. The court will be entitled to presume that a representation is in breach if it includes a major event emblem, major event word, or a representation which closely resembles a major event emblem or major event word, as to be likely to deceive or confuse a reasonable person.
There are exceptions created where written authorisation is gained and where the association is made in accordance with honest practices.
One of the key areas of revenue gathering for a major event is from tickets. The bill prevents selling or trading of a ticket to a major event activity for a value greater than the original sale price of the ticket.
Tickets also provide an opportunity for the event organiser to place terms and conditions for entry to the event.
At the 2006 FIFA World Cup fans were asked to remove orange lederhosen with the name of a Bavarian beer on them as Anheuser Busch was the official sponsor.
Fans removed the lederhosen and watched the game in their underwear. The following day fans were provided with orange boxer shorts to wear bearing the Bavarian beer brand. Ambush marketers often move quickly to maximise an opportunity at short notice. By the time action has been taken the ambush marketer has undertaken a successful ambush.
Seeking removal of the lederhosen created worldwide publicity and thereby greater exposure in this instance of Ambush marketing.
This must be welcomed by the organisers of major events where tickets to major events are in demand and start appearing for sale on internet auction sites. Event organisers can place terms and conditions for entry as a condition of the purchase of a ticket stipulating that the purchaser cannot resell the ticket at a premium. Resale would constitute a breach of contract and the ticket holder will be denied entry to the venue.
Pressure can be placed on internet auction sites to stop resale, while TradeMe in New Zealand is receptive to this, eBay takes a different position on the basis it is not selling the tickets.
Part 3 of the bill provides for permanently protected emblems and words relating to the Olympic Games & Commonwealth Games. There are shown in schedules to the Act. These emblems and words are currently protected in the Flags, Emblems and Names Protection Act 1981, but it is intended that they be protected instead in the Major Events Management Bill.
It will be crucial to check the words and emblems protected by the Act to ensure any use is authorised.
Breaching provisions of the Bill are likely to result in fines not exceeding $150,000.
Part 4 of the Act relates to border protection measures.
Event organisers know only too well the importance of protecting trade marks for specific events, logos and names. Once registered trade marks are obtained these trade marks can be licensed and a control maintained over their use.
Rights are then granted for action to be taken against those that use the trade marks in an unauthorised manner and where counterfeit product appears on the market.
At the time of the Lions Tour to New Zealand several high profile clothing manufacturers policed the market for counterfeit ALL BLACK and LIONS jerseys and merchandise. This proved to be successful as after the first game, very few counterfeit products were found on the market.
The Bill is also taking a harder line on unauthorised traders, including street traders.
Enforcement officers will be appointed to identify breaches, to issue formal warnings, to inspect and monitor clean zones, to obtain search warrants. Enforcement officers are to be given the power to seize or cover anything the officer believes is a breach.
On 4 April of a supplementary order paper inserted a new subpart 5 into part 2. The subpart makes it an offence for a person to go onto a playing surface or to propel an object onto the playing surface at a major sporting event.
Breaching these provisions are likely to result in a term of imprisonment not exceeding 3 months or to a fine not exceeding $5000.
This addition has been made to ensure the smooth running of major events so streakers beware!
It will be interesting to see the final version of the Major Events Management Bill in New Zealand and how successfully it can combat ambush marketing.
We will all be watching with interest the continued development and refinement in Australia and around the world, of other legislation attempting to combat ambush marketing.
Ambush marketers are adept at taking advantage of any opportunity at short notice.