Ambush Marketing and ‘The Mega Event Monopoly’
Andre M. Louw
An Interview in 2011 with Dr. Andre M. Louw, Senior Lecturer, Faculty of Law, University of KwaZulu-Natal, Durban, South Africa.
Andre, could you tell us a bit about your journey leading up to your current academic position?
After completing articles of clerkship with a Cape Town law firm and qualifying as an attorney I returned to the University of Stellenbosch, where I had obtained my undergraduate degrees, as a researcher and part-time lecturer mainly in employment law. When I registered for my doctoral degree in 2003 my promoter suggested considering writing about the employment of professional athletes in team sports. Once I started reading more widely and encountering the range of relevant issues relating to the application of law to sport I was hooked. I found that there are many fascinating issues in sports law that have probably not been considered sufficiently to date by academics and legal theorists, and the opportunities for scholarly work are truly boundless. In a sense this decision to focus my research, exclusively, on sports law has proven to be serendipitous for me as a (relatively) young academic in the process of building a career and body of work. In South Africa, currently, there is no more than a handful, literally, of academics that specialise in sports law. While I would love to see more locally-based colleagues writing within this field, the current situation does allow for great scope and when submitting draft articles to law journals I have always experienced enormous interest and enthusiasm on the part of editors to explore this area of law.
My ambition, currently, is to establish a sports law centre for dedicated research in this field at the university where I teach, in Durban. South Africa is an important jurisdiction in the scheme of international sports law, with world champion teams and athletes in various sporting codes as well as significant international links in various competitions and leagues. While our cricketers and rugby players may currently be less popular than a few years ago as Kolpak players in the UK and Europe, competitions such as the southern hemisphere Super Rugby franchise tournament and the ICC’s champions’ league cricket competition serve to maintain the importance of South Africa in international sport. The South African legal system (based on Roman-Dutch and English law, but incorporating one of the world’s most progressive Bills of Rights in its 1996 Constitution), is well suited to providing a model for the development of legal theories and solutions to problems which may be successfully followed elsewhere.
I believe that such a sports law research centre (which would be the only one of its kind in South Africa and, indeed, on the African continent) would add value to research in international sports law. The aim would be to establish close links with similar centres and associations elsewhere (such as the Asser International Sports Law Centre in Europe, the Australia/New Zealand Sports Law Association and like-minded groupings of academics and practitioners on the Indian sub-continent), for purposes of research and teaching (I hope that the activities of such centre will feed into the teaching of sports law in our postgraduate business law programme).
As an academician with specific interest in sports law, how would you trace the development of the field over the past decade? Do you think that the level of interest in academic research in the area of sports law has increased?
I believe that the past decade has seen exciting developments in respect of the development of this field of law as a truly distinct discipline, not only in practice but also in terms of academic treatment in a number of different jurisdictions. It is encouraging (for me, personally) to see that references to the earlier debate of whether there exists such a thing as ‘sports law’ or whether one is simply concerned with the application of general principles of law to sport, are starting to disappear from the literature. An important contributor to this process has been the publication of quality, comprehensive and in-depth works on sports law (such as the leading UK-based Lewis & Taylor book Sport: Law and Practice and Gardiner et al Sports Law).
Unsurprisingly, the vast scale of commercialisation of professional sports has brought with it the accompanying legal disputes and greater involvement of the legal fraternity. While the late 1990s saw much attention being paid to developments after the seminal Bosman judgment in the EU, the scope of legal issues concerning sport across a wider range of jurisdictions has increased exponentially due mainly to commercial aspects of the organisation and governance of sport (and the expansion of commercially-motivated leagues and competitions). A prime example is the Indian Premier League competition (which has flourished in parallel with issues such as restraint of trade regarding the ICL competition). Sports broadcasting developments (including both new media, as well as new forms of piracy) have continued to expose sports leagues and those who govern them to competition law challenges, especially, while contractual and employment disputes remain ubiquitous. The trend in respect of exploitation of commercial rights to events promises to continue the process of greater involvement of IP law specialists in the context of sport and the development of a context-specific application of IP to sport (somewhere in the book I am currently writing, I quote an American observer who commented that one can now teach an entire IP law programme at university by using only examples of case law from the world of sport – so true!). In short, I believe that the expanding importance of sports law as a niche field of practice amongst a greater number of law firms, internationally, has driven the demand for better and more in-depth, specialist, textbooks and reference works on the subject, and the emergence of such works in the past decade has in turn contributed to the development of better-equipped, specialist ‘sports lawyers’.
That being said, I would love to see more critical works that engage with specific legal issues and with the suitability of the current state of the law, rather than the more descriptive and encyclopaedic type of works which are still common in this field of law (an understandable state of affairs in what is still a quite new field of legal specialisation). While many sports lawyers need to advise lay persons (mostly athletes, sports administrators, etc.), I do believe there is now a place for books that display more academic and theoretical rigour in their treatment of issues in order to provide guidance to judges and presiding officers who require less of the ‘Law 101’ approach and more of an intellectually involved reflection on challenging issues of law.
Could you tell us a little more about your current research? What are the specific areas and issues that your forthcoming book focuses on?
I am writing a book (tentatively entitled Monopoly Games) for Netherlands-based law publisher, TMC Asser Press, which we hope to publish in early 2012. This book will critically and comprehensively examine commercial rights to sports mega-events (such as the Olympics, the FIFA, IRB and ICC World Cup events, and other major sporting events), and how the law is (ab)used to protect such rights primarily against ambush marketing. My focus is on sponsorship of these events (and sponsors’ and event organisers’ sponsorship and merchandising rights) rather than broadcasting rights arrangements.
Much has been written in recent years about ambush marketing, and I am trying to avoid a mere re-hashing of such existing work. I will, for example, not try to emulate the excellent work of English author and barrister Phillip Johnson, who has produced (and will shortly expand and update) a comprehensive and very informative guide on ambushing and rights protection for events. My objective is to produce something that, to the best of my knowledge, has not really been done to date, namely a work focused on policy rather than merely ‘black letter law’ and which subjects the topic to in-depth and critical scrutiny. I will evaluate the model of commercial exploitation of events (the system of sponsorship exclusivity employed) as well as the ways in which the law is used to protect these rights against ambushing. I hope to bring some much-needed balance to the debate about ambushing, which to date has been significantly skewed in favour of the event organisers and sponsors and has largely condemned the ‘ambushers’ through the use of pejorative language and questionable legal tactics. I feel this is needed because not all forms of ‘ambushing’ should in fact provide legal remedies or be condemned as unethical or illegal conduct. I have a clear appreciation for the problems that event organisers face (especially in respect of issues such as IP infringement, internet piracy, etc.) and an empathy for these organisations’ struggle to combat infringement of their rights, but also believe that law-makers have simply gone too far in recent years in protecting the commercial interests of organisers and sponsors, and I intend to shine a light on this trend.
My critical evaluation of the current state of the law is based on and will make use of in-depth discussion of the relevant legal principles. I will subject both the system of commercial exploitation of events as well as the relevant laws (especially in the form of the sui generis event legislation in various jurisdictions – I will include an overview of 10 jurisdictions) to scrutiny in terms of generally-applicable principles of IP law, competition (anti-trust) law and human rights law. I will further examine the sports mega-event as object of legal protection (i.e. what, exactly, is the law aiming to protect by means of such special legislation?) and will critically evaluate the justification for legal protection. I will examine some relevant recent developments and then also pose some suggestions for law reform.
While I hope that this book will be of interest to legal and marketing practitioners, corporate (sponsor) advisors, sports governing bodies, academics and students, I particularly hope that advisors to governments and law-makers in potential future host nations for these events will be able to take something of real value from it. To be honest, I actually just hope someone – anyone – will eventually buy the thing!
South Africa has been one of the few countries in the world that has used special interest legislation to tackle ‘ambush marketing’. In your opinion, does the legislation achieve a good balance between commercial protection of sponsors and the public’s rights to interact with the event?
No, I definitely do not believe that a good balance was attained with the SA legislation (specifically the provisions of section 15A of the Merchandise Marks Act). This last provision, in my view (and I believe there are others who would agree) is the single most stringent and far-reaching event protection provision currently to be found anywhere in the world. [I do not refer to it as an ‘anti-ambush marketing provision’, simply because it prohibits so much more than ‘ambush marketing’.] I argue in the book that the scope and implications of this provision actually exceed the very stringent and event organiser/sponsor-biased provisions of the ‘association rights’ created in recent legislation from other jurisdictions (e.g., New Zealand and, of course, the 2012 London Olympics legislation). Sadly, in my view, South African authorities did not do enough to ensure that this legislative licence for aggressive rights protection is not open to potential abuse, which is not in the wider public interest.
A major focus of the book (to which I will devote a whole chapter) is the proper demarcation of the legally protectable thematic space around sports mega-events. I will examine both what sponsors pay for (and should receive in return for their sponsorship fee), as well as the legitimacy of the special protection granted to organisers and sponsors in order to optimise exploitation of the potential commercial value of such thematic space. A key thread in this evaluation will be to determine what it is about these events that is actually deserving of legal protection. The public domain element of this thematic space is an ever-shrinking one in light of the legislative intervention by host governments and law-makers, and the ‘special interest legislation’ (as you aptly refer to it) significantly skews the commercial playing field as well as the wider social and cultural dimension of the sports mega-event in favour of a generally small group of primarily large multinational corporations and monopolistic sports governing bodies (with narrow commercial interests which may easily ignore and impinge on wider societal goals and imperatives). I generally object to the ‘propertization’ of all kinds of elements of events (such as organisers’ persistent claims of ‘rights’, some of which, frankly, do not exist in terms of general legal principles in most jurisdictions), and includes, inter alia, the worrying trend towards monopolisation of language re events. Somewhere during the past few decades the eminently public-centred sports mega-event became a private money-spinner par excellence. While developing nations continue to bid for the right (privilege?) to host these events, the mega-event has become a creature that does not necessarily bring with it the benefits that voters and tax-payers in these nations should be entitled to expect.
I am currently watching developments in various jurisdictions with interest for purposes of inclusion of discussion in the book. Brazil, specifically, promises to provide interesting insights into modern mega-event rights protection, and I am breathlessly awaiting developments especially in respect of the special laws that have or are to be passed for FIFA and the IOC’s 2014 and 2016 events, respectively. I have managed to obtain the support of willing and very enthusiastic correspondents who have promised to help me cope with the language barrier (I am hopeless with Portuguese), although I have yet to find someone who can assist with translating FIFA-speak.
At the risk of displaying a lack of objectivity (and this I consciously try to avoid in the writing of the book – only time will tell whether I’ll manage to pull it off), I strongly believe that the current model of commercial exploitation of events and the continuing trend of legal legitimisation and protection thereof has been insufficiently justified to date and, in fact, has not been subjected to proper scrutiny by the legal fraternity. I therefore call for radical law reform in this regard (with some specific suggestions that are currently still percolating at the back of my mind – watch this space).
If you were to compare the various anti-ambush marketing initiatives worldwide, in your opinion what has worked and what hasn’t?
I tend to subscribe to the apparently growing consensus view of some marketing experts, such as (specifically) the outspoken Kim Skildum-Reid, namely that the most successful way to avoid or combat ambushing is by proper leveraging of sponsorship rights, rather than the prohibitive and potentially restrictive efforts at erecting legally reinforced walls around events. The answer may not lie (or not primarily, at least) in use of the sometimes blunt instrument of the law. I have strong objections against the conduct and track record of some of the major event organisers (such as FIFA) in respect of aggressive rights protection programmes which often display a marked lack of forethought or even common sense. Recent research suggests that some of the problems relating to the pejoratively characterised ‘ambushing’ of events are probably more properly ascribable to marketing clutter caused by these very organisations, as a result of their efforts to ostensibly milk every last possible dollar from rights exploitation rather than providing fewer official sponsors with more ‘bang for their buck’. The law-makers have, for the most part, not displayed a sufficient sense of sovereignty, of accountability to their domestic constituencies and of respect for the rule of law, and have compounded the problem through largely indiscriminate acceptance of the now standard, non-negotiable demands for special legal protection of events in the form of bid guarantees. The result is an environment where conduct by members of the public (tax-paying contributors to the hefty bills to host mega-events), which would otherwise not fall foul of normal and universally-accepted legal principles, has been outlawed in order to protect narrow commercial interests of sometimes dubious legitimacy in terms of legal principles. Ironically, while support for better leveraging of sponsorship rights as a primary means to deter and combat ambushing is gaining ground (although not yet sufficiently within the legal fraternity), the special laws passed for events may in fact deter sponsors from pursuing this route. The sui generis event legislation tends to provide a safety net whereby event organisers and sponsors may be growing lazy in respect of their rights exploitation and enforcement/protection efforts. Not only does this foster a tendency to automatically resort to the ubiquitous cease-and-desist letters, it also promotes a rigid attitude of ‘all rights reserved’ (and the claiming of legal remedies for things that are/should not be protected by law). Such legislation may be fostering a culture of entitlement with very little basis in law.
The continuing trend for mega-events (of which the FIFA World Cup and Olympic Games are prime examples) to spawn sometimes ludicrous and widely-condemned incidents of very public faux pas in the form of overly-aggressive rights enforcement by event organisers is troubling, and cannot be good for the reputation of these events (or of the legal system) in the long run. As a South African I am embarrassed to have to point to the ‘Bavaria girls’ debacle experienced here in June 2010. While this was a clear case of an orchestrated campaign to gain publicity for a brand (although I am loath to call it an ‘ambush’ in the traditional sense of the word – as I will explain in the book), the response by both FIFA and the South African authorities was heavy-handed and lacked any sense of appreciation of the ‘bigger picture’. While the widely reported public perception that such response back-fired will hopefully serve as food for thought for event organisers in future, I would like to see legislatures actively resisting calls for the type or level of protection that would facilitate such responses by event organisers.
What advice would you offer to an organiser of a major sporting event that is concerned with protecting the exclusivity of sponsor rights? What are the greatest legal risks to an event and how might they be best managed?
Less can be more. Limit, to the extent necessary, the number of sponsors in order to reduce clutter but ensure that those sponsors get exactly what they pay for and that you’ll ‘have their backs’ when their rights are threatened. While no event organiser has to date managed to prove or even make a really convincing argument that ambush marketing actually threatens the continued existence of their events (because, as they tend to claim, it threatens to alienate sponsors), I would suggest that such proper support for sponsors’ contractual rights would negate this risk in most cases.
Allow, in the domestic context of the host nation, for more freedom for smaller firms to participate in the commercial opportunities that arise from the event, with an objective (and not a knee-jerk, over-protective) approach to inclusiveness. Rather work with the large sponsors to find ways of leveraging the publicity value of the event, to which such activities of smaller firms in fact contributes.
But also know that the historical fact of your status of event organiser and monopoly regulator of ‘the game’ may not entitle you to claim all aspects of the event as your exclusive property. You will not be able to avoid all potential ‘ambushes’, but you as organiser and your sponsors will be much happier if you realise and openly acknowledge this fact. When you enter the market of commercial exploitation of events you must accept that others also inhabit this market, and may have stronger pre-existing rights to pursue their trade. FIFA, for example, was recently forcibly reminded of this fact by the German federal Supreme Court in the final throes of its protracted litigation against confectionary maker Ferrero. You cannot, simultaneously, claim very substantial government and public support (financial and otherwise) in order to encamp in a particular country and then attempt to aggressively ring-fence nearly all possible ways of riding the wave of event publicity. The citizen and entrepreneur in the host nation do not want to have to pay a premium to be an extra in someone else’s corporate marketing video. Show respect for the host nation and its people, and let your commercial footprint be a small one and not be redolent, primarily, of what may be perceived (rightly or wrongly) as selfish and crass commercialism.
With that in mind, however, by all means enforce your generally-accepted and applicable existing legal rights, but don’t demand special treatment under the laws of a host nation unless you can provide sufficient and reasoned motivation for this, bearing in mind that such protection often comes at great social, financial and other costs to others who inhabit that domain (which you are, after all, visiting temporarily).
More fundamentally, make sure that your very system of sponsorship exclusivity is above board and does not invite potential legal challenge. Ensure that fair opportunities for participation in cutting the commercial cake are provided and that more guests (both invited and uninvited – but only if well-behaved) are allowed at the table. Allow opportunities to a wide spectrum of potential commercial partners, and do not create the perception of perpetuating a closed shop where only the ‘big boys’ are perceived to benefit from the event. With less aggressive enforcement against small ‘ambushers’ as a largely PR-focused exercise, and principled action against the large commercial actors (who may be serial ambushers of events but are rarely if ever actually sued, compare Nike), may come a legitimisation of the concept and importance of commercial rights and the need for their protection in the public zeitgeist.
As for the risks to event organisers, recent events have again shown the dynamic nature of ambushing and of the legal implications. For example, I understand that the 2011 ICC Cricket World Cup has raised specific issues regarding the unauthorised commercial use of news footage of matches by the media, which has implicated practices of media accreditation. While this is not something new, the level of the problem appears to have been unprecedented, and may well lead to litigation in the near future. This just shows that only time will tell how future events will be affected. The viral internet marketing campaign and prevalence of social media, for example, will undoubtedly pose not only opportunities but also new risks to event organisers and sponsors. The large and prominent ambushing campaign, in the traditional sense of illegitimately associating a brand with an event by means of deceiving consumers and infringing use of organisers’ IP, is largely a thing of the past. The ‘ambushers’ have grown more sophisticated, and the event organisers and sponsors should follow suit. This does not, however, mean that these parties should lobby for more and more stringent ‘catch-all’ laws to enclose ‘their’ event in an artificially constructed bubble. Legal advisors should be more creative in finding ways in which existing laws can protect events without resorting to the political power of event organisers (and their hosting bid evaluators) and the economic power of multinational sponsors being used to demand dubious new event-specific laws.
Finally Andre, what do you consider the best thing about your job, and the worst? What advice would you offer to others considering academic careers in sports law?
One of the best things about my job as an academic is the ability to largely avoid the perils of the often mercenary nature of the legal profession. Please don’t get me wrong, I am not condemning legal practitioners or what they do for a living (I am, after all, a lawyer). I personally prefer to be positioned outside the arena, however. The isolation of the ‘ivory tower’ allows me to address legal issues with a view to critically evaluating the adequacy and legitimacy of laws and to (hopefully) make some useful contribution in suggesting changes where necessary, without being beholden to whoever pays the bills at the end of the day. [As an academic I am, in any event, so poorly paid that I can afford the luxury of not having that constant nagging feeling that I might be ‘selling out’ by favouring the client over the legal principle!] Incidentally, the dangers inherent in what I refer to as the mercenary nature of the legal profession are well illustrated in the context of event commercial rights protection. Without pointing a finger at any specific individuals, a number of prominent legal specialists (such as IP lawyers) have in past years been unpopular in public discourse as a result of their aggressive efforts to protect the rights of their event organiser clients, and may have served to sully the name of the legal profession in the process (yes, I know, that’s not the hardest thing to do!). One of FIFA’s local lawyers for the 2010 World Cup in South Africa, for example, was quoted in the media as stating that ‘As a law firm you cannot hope for a better instruction’. I am deeply concerned when the efforts resulting from such lucrative legal work may tend to obscure the primacy and importance of legal principles behind the veil of claims to rights for special private interests in the corporate commercial context. I view the role of the academic as an extremely important counterpoint in this regard, which should provide some necessary checks and balances.
The worst part of the job, for me personally, is not having enough time to write, which is my first love. Academic and other duties always detract from the process, although I cannot really complain in light of the other freedoms that academic life provides. Teaching (and interaction with that sometimes strangest of life forms, the student) also helps me stay young at heart even while constantly adding the inevitable grey hairs.
My advice to anyone considering an academic career in sports law is to be bold. The fact that ‘sports law’ as a discipline, in the early years of its development, was significantly concerned with the application of more general principles of law (from, e.g., contract, competition, employment, IP and administrative law), does not mean that we as academics should not consider the development of special principles that may lead to more satisfactory treatment of burning issues and questions. The (professional) sports industry has shown itself to be a unique one, which often displays atypical characteristics when viewed through the prism of general principles of law. I believe we should move away from simply applying general laws to a specific context, and to the pursuit of development of special laws that best reflect the realities of such context and the practical needs of its stakeholders and role-players. This, for me, is a very exciting prospect, and I hope to be able to contribute in some small part to this process in future.
Dr. Andre M. Louw (BA, LL.B, LL.M, LL.D) is a Senior Lecturer, Faculty of Law, University of KwaZulu-Natal, Durban, South Africa. He is the author of Sports Law in South Africa (Kluwer Law International, June 2010); numerous law journal articles on various aspects of sports law (including race-based discrimination and affirmative action in professional sports, regulation and governance of sport, ambush marketing, athletes’ image rights, etc).