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RWC 2011: Trying to side-step the threat of ambush marketing
Practical Law UK Articles 4-508-0848 (Approx. 4 pages)
RWC 2011: Trying to side-step the threat of ambush marketing
| Published on 06 Sep 2011 • International, New Zealand, United Kingdom |
This article looks at the threats posed by ambush marketing to the Rugby World Cup 2011 and considers the measures that have been put in place to combat them, in particular the New Zealand Major Events Management Act 2007.
Chris Connolly, Solicitor, A&L Goodbody
Speedread
As the showpiece event of rugby union, the Rugby World Cup 2011 will be one of the top sporting events in the world this year and represents one of the best marketing opportunities in the global sporting calendar. But how will event organisers cope with the threat posed by ambush marketing? This article looks at this threat and considers the measures that have been put in place to combat it, in particular the New Zealand Major Events Management Act 2007, and the extent to which this legislation will be enforced.
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The Rugby World Cup (RWC) 2011 is the showpiece event of rugby union and will be one of the top sporting events in the world this year. With over one million spectators due to attend and billions around the world due to watch events unfold, the stage is set for a memorable tournament.
At an estimated cost of NZ$310 million (£150 million), hosting an event of this magnitude does not come cheaply. In addition, 95% of all money distributed by the International Rugby Board (IRB), the game’s governing body, to promote the game of rugby union globally comes from Rugby World Cup revenue. As a result, the success of the commercial programme is vital.
Worldwide partners including Heineken and Emirates and official sponsors including Microsoft and Range Rover along with official suppliers, licensees, broadcasters and travel agents have invested significantly in order to gain the exposure and goodwill that comes with being associated with such a prestigious event. However, the value of this goodwill could be diluted by effective ambush marketing, where a brand establishes an unauthorised association with the event. In the past two decades, ambush marketing has become one of the most significant problems facing rights holders and sponsors of major sporting events to the point where it is now highly desirable for host nations to enact legislation to protect the rights and interests of their commercial partners. For more information on ambush marketing generally, see Article, Ambush marketing in the UK.
An example which highlights the risk of ambush marketing is in the previous staging of the tournament in 2007 when in order to promote the national team’s sponsorship by the well-known bookmaker, Paddy Power, Tongan player Epi Taione changed his name by deed poll to Paddy Power and the entire Tongan squad dyed their hair bright green, the colour used by Paddy Power in its corporate branding. However, this attempted ambush was stopped in its tracks by the IRB putting the team on notice that these activities were a breach of the tournament rules and as such they risked disqualification. This demonstrates how the risk of ambush marketing heightens the need for protective legislation in this area.
In New Zealand, this legislation takes the form of the Major Events Management Act 2007 (MEMA), which was enacted to protect major events beyond the RWC 2011. By designating RWC 2011 as a "Major Event" under the MEMA, parties that are not commercial partners of RWC 2011 are prohibited from marketing their goods and services in a way that suggests that they are official sponsors or otherwise have an association with the event. The Act also contains measures which prohibit counterfeit merchandise and ticket touting.
While the restrictions contained in the MEMA are not as extensive as those in the London Olympic and Paralympic Games Act 2006, it represents a significant continuation of the increasing practice of enacting legislation seeking to protect the commercial programme of a major event. For more information on the UK legislation and an explanation of how to plan Olympic marketing and advertising strategies that avoid conflict with the London Organising Committee, see Article, Marketing, advertising and the Olympics: how to avoid falling at the first hurdle.
Rights protection teams are already in place in New Zealand and are closely monitoring advertisements and promotional activity to ensure that the commercial purity of RWC 2011 is upheld. Any person or entity that is planning to engage in activity which may imply an unauthorised association with RWC 2011 should be aware of what is and is not permissible under the MEMA.
Advertising and Promotional Activity
Under the MEMA, advertising or promotional activity by a person or entity that is not an official sponsor of RWC 2011 may not contain certain key words including "Rugby World Cup", "World Cup 2011", "Rugby New Zealand 2011", "RWC", "Webb Ellis Cup" and "IRB". The use of emblems such as the RWC 2011 logo, the image of the Webb Ellis Cup and the IRB logo in their advertising or promotional materials are also prohibited. This prohibition extends to online activity and unofficial merchandise.
Such promotional material may include generic terms and images which do not imply an association with the event. For example, material using the words "New Zealand" and a picture of a rugby ball are permitted but protected words such as "Rugby New Zealand 2011" and protected logos such as the RWC logo may not be used.
In addition, it is not permitted for any non sponsor to offer tickets to RWC 2011 matches as a prize in a competition without prior approval from Rugby World Cup Limited (RWCL), the commercial rights holder of RWC 2011. The reason for this restriction is that such competitions for tickets are a classic method for a non sponsor to attempt to establish an association with the event.
Clean Zones
Interestingly under the MEMA, in addition to prohibiting non-sponsor signage, merchandise or marketing materials in the stadia hosting matches, there are also provisions that ensure "clean zones" exist in areas such as motorways and railway lines leading to the stadia. For example, Eden Park in Auckland has the largest clean zone covering almost 2 kilometres around the stadium.
Within the clean zones unauthorised advertising, street trading, billboard signs and the distribution of non-sponsor marketing materials to match-goers will be prohibited. An example of the latter took place during RWC 2003 where a competitor of Telstra, an official sponsor of the tournament, distributed a large amount of branded marketing material to fans on their way to attending the opening match in Sydney.
It is important to note that the clean zones will only be operational for certain specified periods before, during and after matches at the designated stadia.
Exemptions to MEMA
Certain important exemptions to the MEMA exist including where an activity engaged in is not for commercial gain, where the activity has been authorised in writing by RWCL or where an activity is made for the purpose of reporting the event in the media.
Enforcement of MEMA
While the fact that RWC 2011 benefits from the protection of the MEMA is significant, it would ultimately be irrelevant if its provisions were not strongly enforced. Evidence of the intention to strongly enforce the MEMA was demonstrated when its provisions were used to secure a successful prosecution.
In September 2010, following an investigation by the Ministry of Economic Development in New Zealand, Customs and RWCL, a man was fined NZ$20,000 for importing counterfeit RWC 2011 merchandise. This is likely to send a warning to those seeking to benefit from an unauthorised association with RWC 2011 that a prosecution and fine under the MEMA are a more likely result than a financial windfall.
Conclusion
Whether you believe that ambush marketing is a creative thing of beauty or a parasitic activity that borders on cheating, clearly the protection of the commercial rights programme of a major international sporting event is as important as delivering world-class facilities. Legislation such as the MEMA is a highly desirable measure to achieve this.
Realistically, it will be impossible to prevent every instance of ambush marketing. Also, RWCL and the IRB clearly realise the importance of the New Zealand people enjoying the experience of hosting such a prestigious event and are encouraging of the spirit which has been promoted as the "Stadium of Four Million". For example, if a small bar in Invercargill stylises its menu and introduces a "Webb Ellis Cup Burger" or a "World in Union Sandwich", although this is technically a breach of the MEMA, it remains to be seen whether this would be targeted under the MEMA.
Rather than taking action against small local businesses, the priority will be to secure victories against high profile ambush marketing attempts in order to scare off others from attempting same. However, the risk remains that the brainchild of one creative marketing executive could legitimately sidestep their best laid plans. Let the games begin.
Chris Connolly is a solicitor in the Sports Law Unit of the Litigation Department of A&L Goodbody. He would like to thank Julie O'Mahony, Senior Associate, for her advice.