AMBUSH MARKETING IN WORLD SPORTING EVENTS SPORT/LAWACCORD Kelly Charles Crabb Beijing, April 2007

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AMBUSH MARKETING IN WORLD SPORTING EVENTS

SPORT/LAWACCORD

Kelly Charles CrabbBeijing, April 2007

Development of Commercial Sponsorships Sponsorship Goals and Rights The Olympic Games as a Sponsorship Model Ambush Marketing Ambush Strategies Effects of Ambush Marketing (Three

Perspectives) Countermeasures to Ambush Marketing

OVERVIEW

The First Modern Olympic Games (1896)

67% of cost by private donations 22% from the sale of special stamps 11% from tickets (60,000), coins, medals

DEVELOPMENT OF COMMERCIAL SPONSORSHIPS


Olympic Games since 1984

Seoul 1988: $338 million in sponsorship fees Atlanta: World and Games sponsors put in over $1 billion

for sponsorship rights (33 sponsors averaging over $40 million each)

Sydney attracted $700 million in local sponsorship revenue alone

Salt Lake City made $850 million from all sources

The “five rings” -- introduced in 1914 -- is the most recognized trademark in the world



Other World Sports Organizations

World Cup Soccer Formula One Racing National Hockey League Special Olympics National Football League Major League Baseball National Basketball Association

SPONSORSHIP GOALS & RIGHTS

Benefits of Association

Access to the audience

Link to event values

Survey (2000): Over 80% associated the five rings with “success” and “high standards” and 60% with “world peace”


Link to values:


Rights

Category exclusivity

“Exclusive, legal access to the public profile and positive values associated with the Olympic Games” – Michael Payne, IOC Director of Marketing

World Cup 1994: MasterCard vs.. Sprint

MasterCard: “card-based payment and account devices”

Sprint: “long distance telecommunications” Sprint made pre-paid telephone cards – the courts sided with MasterCard


Rights

Right to use official marks and designations


Rights

Right of hospitality

Access to the Games Accommodations Hospitality suites Tickets

THE OLYMPIC GAMESAS A SPONSORSHIP MODEL

International Olympic Committee (IOC) as Owner

“The Olympic Partner” (TOP) Program

Exclusive use of five rings standing alone

Worldwide territory

Highest level of hospitality and other rights


National Olympic Committee

Marketing rights (shared with OCOG)

Salt Lake 2002: Joint Venture with SLOC

Beijing 2008: BOCOG controls

Team sponsorships


Organizing Committee for the Olympic Games (OCOG)

Sponsors of the Games (Host Country Only):



Highest level of Games sponsors (Partner)


Greatest level of benefits

Use of official OCOG Marks

Access, hospitality, tickets

Highest domestic price

Can’t be greater than TOP



Mid-level sponsors (Sponsor)


Limited designation rights

Limited access, hospitality, tickets

Mid-level domestic price



Official suppliers (Supplier) Exclusive/non-exclusive Less of everything VIK, not cash

Licensees (merchandise) Right to exploit Games (OCOG) marks in

merchandise

AMBUSH MARKETING

Unauthorized association with sporting event or movement

No compensation paid to event owner or the organizer

Public misconception of official association

AMBUSH MARKETING STRATEGIES

Sponsorship of media coverage of the event

Los Angeles 1984: Fuji was worldwide sponsor in film category, Kodak became a sponsor of the television broadcast by CBS

Lillehammer 1994: McDonalds was the food sponsor, but Wendy’s bought ad time during the Games (ads were “spoofs” on the games)


Sponsor subcategory within the

event and exploit aggressively

Los Angeles 1984: When Fuji Film became the worldwide film sponsor, Kodak because the “official film” of the US Track and Field Team

Seoul 1988: Roles reversed: Kodak was the worldwide film sponsor and Fuji became the sponsor of the US Swim Team


Sponsor subcategory within the

event and exploit aggressively

World Cup 1990: Coke was the worldwide soft drink sponsor, Pepsi was the sponsor of the Brazilian Team


Sponsor subcategory within the event and exploit aggressively

Sydney 2000: Qantas sponsored pre-Olympic meets and the Olympic selection trials for the Australian Swim Team – the trials were broadcast from the official Olympic venue where Qantas put its name and logo


Use current or former event winners or participants in advertising

Calgary 1988: American Express, a sponsor of the 1984 Games, turned down a chance to be a sponsor of the 1988 Games, but used Billy Kidd and Eric Heiden (two famous US Olympic Team athletes) in its ads

Atlanta 1996: Fuji put up billboards across the US showing US Olympian Daniel O’Brian throwing a Javelin – the USOC complained

Nagano 1998: Campbell Soup used three US figure skaters in a series of ads – the USOC complained and Campbell paid a “contribution” to the USOC



Sydney 2000: Qantas, not a sponsor, used Olympians Cathy Freeman and Kieren Perkins in ads



Sydney 2000: Adidas sponsored Ian Thorpe (Australian Olympian), while Nike was the official clothing supplier to the Australian Team – Thorpe covered the Nike logo on the medals stand


Make sponsorship contributions to “cause” of event

Seoul 1988: Seagrams, a non sponsor, launched a program called “Send the Families” – by paying the cost of sending 500 relatives of the Canadian team to the Seoul Games


Make sponsorship contributions to “cause” of event

Nagano 1998: Visa created picture menus so foreign guests could order at Japanese restaurants – the restaurant owners created large signs advertising their participation in the “official Olympic program”

This Restaurant participates in

the Olympic Picture Menu program


Plan advertising that coincides with the event

Contests

Stanley Cup 1990: Coke became the official National Hockey League (NHL) sponsor under license with National Hockey League Services (NHLS), but Pepsi sponsored the “Pro Hockey Playoff Pool” contest hosted by a famous former player – the Canadian court ruled for Pepsi in the famous case of NHL vs. Pepsi-Cola Canada Ltd.



Activities within the geographical area

Los Angeles 1984: Converse was the official shoe sponsor of the Games, Nike erected huge murals near the Los Angeles Coliseum showing Nike track and field athletes

Atlanta 1996: A non-sponsor leased the outside of a tall office building in plain view of the main track & field venue and placed a banner -- covering a full side -- of the building




World Cup 1994: Adidas was the official sponsor, but Puma hired a plane to fly over the official venue trailing an advertising banner




Formula One, Australian Grand Prix 1999: In the background, during the award of the trophy, Messages on Hold Australia (MOHA) waved a giant banner




Salt Lake 2002: Local owners of Burger King, a non sponsor, launch a Games related campaign -- McDonalds is the official sponsor


Use generic words

Lillehammer 1994: Visa vs. American Express – Visa, the official sponsor, “American Express cards not accepted,” but American Express, non sponsor, “you don’t need a visa to go to Norway” (double entendre)


Use generic words

Sydney 2000: Landrover’s ad – “Let the Games Begin!”

LET THE GAMES BEGIN!


Use generic words

New Zealand Fair Olympic Association sued Telecom New Zealand under the New Zealand Fair Trading Act, but the court refused to grant an injunction

RING RING RINGRING RING


Apparel

Salt Lake City 2002: Columbia Sportswear is not a sponsor, but NBC announcers wore Columbia-branded apparel


Apparel

Nagano 1998 & Salt Lake City 2002: Nike was not an official sponsor or supplier, but athletes wore Nike branded apparel and used Nike-branded equipment


Apparel

2006 FIFA World Cup: spectators wearing orange Bavaria Brewery-branded Leeuwenhosen (overalls) were ordered to disrobe by officials in Stuttgart, and many of these Dutch supporters watched the game in their underpants. (Budweiser was the official sponsor of the World Cup.)

EFFECTS OF AMBUSH MARKETING (THREE PERSPECTIVES)

Owner/Organizer Official Sponsor Competitor


Owner’s and Organizer’s Viewpoint

Diminishes the value of the “official” designation

Harm the financial viability of the event Illegal, if marks are used Costly to police


Official Sponsor’s Viewpoint

Undermines the value of the investment

World Cup 2002: After the 1988 World Cup, Adidas announced that it would not remain a sponsor unless FIFA could assure that Adidas sponsorship investment would be protected


Official Sponsor’s Viewpoint

Unfair, as the competitor did not pay

Lillehammer 1994: IOC named Wendy’s the “worse poacher” of the Games and criticized Wendy’s for not supporting any athlete – “we want to expose them”


Competitor’s Viewpoint

Competitor has no obligation to stand still (in fact, it has an affirmative obligation to enhance shareholder value by aggressive advertising)

“Marketing is a form of warfare, and the ambush is a weapon!”

“Ambush marketing, correctly understood and rightly practiced, is an important, ethically correct, competitive tool in a non-sponsoring company’s arsenal of business and image-building weapons.” Jerry Welsh



Not illegal if trademarks are not used



Not illegal if disclaimers are used

Sydney 2000: Qantas’ poster said “Sydney 2000*” — the asterisk drew readers to a small print disclaimer: “Qantas is not an Olympic Sponsor”

COUNTERMEASURES TOAMBUSH MARKETING

IOC requires host nation to enact protective laws

Australia enacted the Sydney 2000 Games (indicia and images) Protection Act of 1996

In 2002 Beijing Municipal Government promulgated Regulations of Beijing Municipality on Protection of Olympic Property

On January 30, 2002 - Executive Committee of the State Council promulgated Decree No. 345 (Regulations on Protection of the Olympic Symbols); on April 1, 2002 - Decree No. 345 became effective as law in the Peoples Republic of China


IOC requires host nation to enact protective laws

Canada made certain covenants in its application to host the 2010 Games that Canadian law could be used to protect against certain ambush marketing activities. New legislation is currently being introduced in Canada which would further restrict ambush marketing.


IOC requires host to establish ambush marketing plan

Monitor all venues Coordinate with police authorities Take action, when appropriate


Official sponsors get first option to sponsor broadcast of event

World Cup 1992: All advertising surrounding the event was sold to official sponsors

IOC offers official sponsor is given first option to acquire broadcast and advertising rights for the event in each territory where broadcast rights are sold – IOC/Broadcaster agreements


IOC requires OCOG to purchase all billboard space surrounding and leading up

to the Games


NOC can exercise leverage over athletes

Atlanta 1996: When Fuji Film used the image of Daniel O’Brian, the USOC threatened to disqualify O’Brian from the Games – Fuji backed down and removed the billboards


IOC imposes “clean venue” rules

IOC determines the size and location of logos used on apparel worn by athletes and venue officials

With minor exceptions, no advertising of any kind is allowed at Olympic venues

o No display of logos on equipment (except timing equipment)

o No signage


Legal action taken

Salt Lake 2002: OCOG engaged in strategic filing of law suits against sellers of counterfeit Olympic merchandise (US trademark law) (all cases settled)

New Zealand NOC: Sued ambush marketer under unfair trade practices law (lost)


Threaten Negative Publicity

Seoul 1988: A credit card company gave away medals from the non-existent Olympic Heritage Committee – the IOC threatened to expose the company, which ceased its activities immediately

Barcelona 1992: IOC exposed American Express for its “themed” advertising campaign – even though Olympic marks were not used


Actions of official sponsors

Pressure IOC and OCOG to police rights Pursue aggressive exploitation of rights

(don’t sit back) Legal recourse against owner or organizer

SUMMARY

Companies derive substantial benefit from event sponsorship marketing

Non-sponsors can try to take advantage of association by various methods of “ambush marketing”

Laws prevent non-sponsors from using official marks or emblems or purposefully misleading the public by misrepresentations about association

Unfair trade practice law has not acted as a significant restraint on ambush marketing

Owners and organizers (especially in the Olympic Movement), however, have been successful in establishing operating rules and procedures that curtail ambush marketing

THE END

KELLY CHARLES CRABB

Morrison & Foerster LLP

555 W. Fifth Street, Suite 3500

Los Angeles, California 90013

213-892-5412

[email protected]

AMBUSH MARKETING IN WORLD SPORTING EVENTS SPORT/LAWACCORD Kelly Charles Crabb Beijing, April 2007

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