Intellectual property (IP) rights (patents, industrial designs, trademarks, copyrights, etc.) are usually associated with industry, typically manufacturing. Intellectual property rights grant exclusivity to the owner of the intellectual property for a limited period. But sports organizers use intellectual property laws to take advantage of the interest in certain sports.
Sports activities started as a pastime or pastime for participants to enjoy sports or as a form of physical exercise. Today, some games have become giant international events, or more precisely international companies with their own “tailor-made” law. Such international events defy even the sovereign laws of countries.
Popular games such as football, golf, tennis, basketball, cricket, sailing, car racing, etc. have turned into international events with huge success, creating huge marketing potential for organizers. Organizers of popular games such as FIFA (soccer), PGA (golf), NBA (basketball), etc. organize and manage events, usually international competitions, in such a way as to extract the maximum value from others who want to exploit the marketing potential offered by the events.
Organizers initially create a distinctive logo, emblem, or phrase(s) to identify the event. If the logos or emblems are original, they would also be protected as copyrighted works.
For example, the 2010 FIFA World Cup emblem is protected as a trademark and as an artistic work under copyright laws. Terms such as “2010 FIFA World Cup South Africa”, “2010 FIFA World Cup”, “2010 World Cup”, “Soccer World Cup” and similar derivatives are also protected against any unauthorized use and subject to applicable laws in different jurisdictions.
Since logos/emblems/phrases (“event identifiers”) are heavily promoted in the main media, they are easily and very quickly associated with the event by the public and thus acquire strong brand value . Event organizers then proceed to leverage the brand equity with other businesses.
Let’s take a look at the different sources of income for organizers. The first line of income is made up of sponsorship fees. This includes the right to display the Sponsor’s brand inside the Games venue/stadium, the right to use Event IDs on items made by Sponsors, or the right to use the ID of the event in association with a service (e.g. bank, credit card (VISA), business process outsourcing (Mahindra Satyam)), or investment rights (e.g. a certain brand of luxury watches at next to golf course tees).
The second line of income is collection at the door. Even then, the printing of the tickets can be sponsored – the ticket bearing the brand of the sponsor.
The third source of income is the exclusive supply of products for games, such as footballs, tennis balls, shuttlecocks (badminton), fuels and lubricants (motor racing), etc. The supplier of the articles has the right to describe themselves as the “official supplier” to promote their articles and to present themselves as the exclusive supplier of these articles. Ironically, although Adidas was a prominent sponsor/partner of the 2010 FIFA World Cup, it was Nike that captured the most viewers’ attention, whether through the football boots of the players or clever advertising spots. Is this a bad Adidas sponsorship strategy?
The fourth source of income, and increasingly the most lucrative source of income, is the exclusive right to record and broadcast the event on television and radio, and possibly on the Internet in the near future. . Broadcast rights are granted to regional and national broadcast networks. All copyrights relating to the recording and broadcasting of the games are retained by the organizers or licensed to specific entities.
Finally, the organizers also grant manufacturers exclusive rights to manufacture and sell mascot merchandise or products bearing the event ID upon payment of a royalty.
Organizers have a large stream of income, namely:
1. Referral fees
2. Collecting Portals
3. Exclusive rights to use the product at events
4. Broadcast rights
5. Marketing rights
In addition to event organizers, other manufacturers and service providers profit by sponsoring the sportswear and gaming equipment of individual teams or players. Just consider the brand of the t-shirt, shorts, cap, gloves, shoes, socks, etc. of the player. In South Africa, the shoes of a non-sponsor brand worn by the players stood out just as well (if not more) than those of one of the official sponsors. In the case of racing car drivers, have you ever seen plain driver suits? On the contrary, the rider’s overalls, including the hard hat, are often covered in an assortment of brands.
Even the refreshments/drinks consumed by the player during the game are sponsored, with full advertising value exploited. Here, the advertising of the brand is not the advertising of the product, like what appears in a television commercial, but the brand or the product is intrinsically associated with a successful player. What other compelling message can be produced, if not for a world-class actor using the advertiser’s product?
In addition to organizers’ earnings, as noted above, gamers, especially the top players in the games, often endorse sports-related and even non-sports related products, services or businesses. For example, Tiger Woods not only endorses golf clubs, balls, t-shirts, caps, etc., but also endorses watches, consulting services, and personal hygiene products (Note: he went on to been suspended/excluded from the latter two following his transgressions); Maria Sharapova, one of the best tennis players, endorses shoes and clothes, cameras and watches, among others; and soccer player Ronaldinho has endorsement deals with Pepsi, Nike and Sony.
In order to derive maximum benefit from revenue streams, organizers of major game events like FIFA must strictly enforce their trademark rights and take action against those who associate themselves with their brand without the organiser’s consent. Unless organizers take strong action against violators, they are unlikely to achieve high sponsorship rates for future events, let alone a possible breach of sponsorship contract.
Unfortunately, intellectual property laws were not designed for such periodic international occurrences. Many manufacturers or service providers would like to be associated with such important international events which attract viewers by the billions, but either they don’t have the opportunity or they cannot afford the fees and costs. So they try to associate their product/service with the event without the consent of the event organizer. That’s where ambush marketing comes in. Event organizers have a field day to take action against these traders. But whether a particular event or advertisement amounts to ambush marketing is unclear under conventional intellectual property laws. To prevent this, countries, especially host countries, are often required to enact specific laws to deal with ambush marketing before they have the opportunity to host the event. Britain had to enact the London Olympics and Paralympics Act 2006 ahead of the London 2012 Olympics. The “London 2012” trademark is protected.
The next question arises how and in what manner the revenue from the event, say the 2010 FIFA World Cup, is spent. Who benefits from the income? This will be the subject of another article for another day.
Note: Trademarks and designs identified in the article belong to their respective owners. The author does not claim any ownership rights; they are used for educational purposes only.