LONDON (Reuters) - Multinationals have paid a king’s ransom for their right to sponsor the Olympics and they are scanning the horizon for ambushes as they drive the marketing bandwagon towards Beijing.
Since China won the right to host the Games seven years ago, the government, Olympic officials and Beijing organisers have been building legal barricades to try to prevent unlicensed companies pilfering any Olympic gold dust.
The Beijing Games has 12 global sponsors in the top partners programme for the 2006 Winter Games and the 2008 Summer Games, with contributions totaling around $900 million. The Beijing organisers will attract an additional $1 billion from local marketing contracts.
Using the five-ring logo, selling unauthorized versions of the mascot and trying to persuade the public your company is part of the Olympic family through advertising sleight-of-hand are among ambush marketing tactics being targeted.
At the 1996 Games in Atlanta, Nike placed advertisements near the stadiums and established a “Nike village” even though it was not an official sponsor. This year it has already launched online videos highlighting its shoes for Beijing.
Visa Inc. sponsored the 1994 Winter Olympics in Lillehammer, prompting American Express to run a campaign saying Americans did not need a ‘visa’ to travel to Norway.
Regulations covering sponsorship of major sporting events have been progressively widened and now routinely encompass what spectators can eat, drink and wear in venues and stadiums.
Some regard ambush marketing as parasitic and ethically dubious; others say it is the product of imaginative thinking and does not affect the bottom line of an Olympics or World Cup.
The Sydney Olympics in 2000 were the first to be protected by legislation aimed at preventing non-sponsor companies from using official insignia and phrases such as “Sydney Games.”
Athens followed suit four years later, targeting spectators, who were prevented from entering stadiums if they were eating or drinking products of non-sponsors.
Beijing has posed a far greater problem than any previous Games because of China’s reputation for producing pirated goods and its lax attitude over intellectual property rights (IPR), which is a source of tension with the United States.
Jason K. Schmitz, of lawyers Mayer Brown Rowe and Maw in Chicago, said ambushers were unlikely to make such a dent on official sponsors’ exposure that this could threaten an event’s budget.
Nonetheless, since 2001, China has issued a series of decrees to protect the Games and Beijing’s Municipal Bureau of Intellectual Property is in charge of increasing awareness.
“Beijing has made a clear commitment on the rights of the sponsors,” said Zhou Jidong, director of Beijing’s municipal legislation affairs office. “I believe during the Games there will be proper measures to protect their legal rights according to the IOC’s and sponsors’ demands.”
Non-authorized drinks will be banned from Games venues in August as will spectators’ T-shirts advertising non-sponsors.
Unlicensed T-shirts, caps and other accessories carrying the Beijing Olympics logo or mascots are still sold openly in street markets. People can report infringements via the Beijing 2008 website and last year Beijing (the city) issued 1 million yuan ($142,900) in fines to those flouting Olympic copyright rules.
“We are taking this issue very seriously,” IOC marketing commission chief Gerhard Heiberg told Reuters in January. “This is brand new to Chinese companies. Some do it with good intentions and some not with good intentions.”
Most ambushes do not revolve around a clear-cut infringement and lawyers say Olympic officials usually prefer persuasion to legal action.
“There are very few court cases ... and those that do exist basically favor the ambusher as opposed to the ambushee,” said Kelly Crabb, a partner with Morrison & Foerster in Los Angeles and an international counsel for the Beijing organisers.
“But there’s enough incentive on the part of the organizer ... because there’s so much money involved coming from the official sponsors that if you don’t do something that source of revenue is going to dry up.”
If an injunction were brought and lost, the precedent would make the sponsor even unhappier, Jeffrey Gewirtz, general counsel for the New Jersey Nets basketball team, told a Sports Lawyers Association conference in May.
“Sometimes you’re hamstrung only by the statutory sword or weapon that you have,” he said.
In Britain, the organisers of the 2012 Olympics have tried to tighten the legal screw even further -- under a new law, the combined use of words such as “2012” and gold in advertising by non-sponsors could result in legal action.
Protective measures can veer towards the farcical. Organisers at the Turin Winter Games in 2006 covered up reporters’ laptop logos with tape so non-sponsors’ names could not feature in camera shots.
At the soccer World Cup in 2006 hundreds of Dutch fans were asked to remove their orange trousers before entering a stadium because the clothing advertised a non-sponsoring beer company.
At next month’s European soccer championship fans will not be allowed to enter official public viewing zones wearing clothing featuring non-sponsors, according to media reports.
Ambush marketing via fans was targeted by the Major Events Management Act passed by the government of New Zealand which will host the 2011 Rugby World Cup and 2015 Cricket World Cup.
There is a threat of up to three months in jail for invading the pitch, after streakers painted with the logos of non-sponsors interrupted matches.
The 1996 cricket World Cup in India was the scene of one of the more blatant examples of ambush marketing when Pepsico Inc. flew large balloons near match venues and used its “nothing official about it” to take the spotlight off official sponsor Coca Cola.
Other ways around the rules are advertisements on television and radio during Olympic broadcasts, viral marketing through online videos, blogs or e-mails, and sponsoring individual athletes and teams attending the Games.
British sprinter Linford Christie wore contact lenses with the image of a puma on them before the 100 meters final in Atlanta, earning the non-sponsor, Puma, huge publicity.
Despite sponsors’ anger over ambushes, many experts say companies grabbing a free ride on the back of an Olympics merely confirm the cliche there is no such thing as bad publicity.
Others say the IPR dangers posed by the Games in China and the proliferation of non-official marketing could have an impact on the sums sponsors are prepared to pay.
This year Nike has signed up hurdler Liu Xiang, an Athens hurdling gold medalist and hugely popular in China. Speedo is one of the most talked-about sports brands in the world after a host of swimmers broke world records in its new swimsuit.
Neither are official sponsors or suppliers of the Games. Nor is Li Ning, China’s largest sportswear retailer founded by the gymnast who won three golds at the 1984 Games, which will have its logo on shirts and shoes worn by sportscasters at the state-run Chinese channel which has exclusive rights to mainland broadcasts in August.
“These days, it doesn’t make much sense to sponsor the Olympics, as you cannot set yourself apart from others any more as brand awareness is diluted,” said Shaun Rein, managing director of China Market Research Group.
Additional reporting by Samuel Shen, Nick Mulvenney and Ben Blanchard in Beijing, Kate Holton in Paris, Karolos Grohmann in Athens, Gyles Beckford in Wellington, Ben Klayman in Chicago; Editing by Sara Ledwith