Protecting sponsors from guerrilla marketing is a vital element of major sports events

RUGBY WORLD Cup 2011 opens today with hosts New Zealand taking on the Pacific Islands side Tonga in Auckland. The event is the showpiece of rugby union and will be one of the top sporting events in the world this year. With more than one million spectators due to attend and billions globally expected to tune in, the stage is set for a memorable tournament.

At an estimated cost of NZ$310 million (€185 million), hosting an event of this magnitude does not come cheaply.

In addition, 95 per cent of the money distributed by the International Rugby Board (IRB), the game’s governing body, to promote the rugby union globally comes from rugby world cup (RWC) 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 come with being associated with such a prestigious event. However, the value of this goodwill could be diluted by effective ambush marketing.

In the past two decades, ambush marketing – where a brand establishes an unauthorised association with the event – has become one of the most significant problems facing rights-holders and sponsors of major sporting events.

Before the 2007 rugby world cup kicked off, Tongan player Epi Taione changed his name by deed poll to Paddy Power in order to promote the national team’s sponsorship by the bookmaker. The IRB did not accept the name change and, following this, the Tongan squad members dyed their hair bright green before the team’s match against England. In the end, the dye was removed prior to kick-off.

And last year, at the soccer World Cup in South Africa, 36 orange-clad Dutch women were removed from Holland’s game with Denmark in Johannesburg and arrested under legislation relating to merchandise marks. They were accused of an ambush campaign to promote Dutch brewer Bavaria’s Orange beer. Anheuser-Busch’s Budweiser was the official beer for the tournament.

Two of the women were subsequently charged but the cases were later dropped.

However, so problematic is ambush marketing that it is now preferable for host nations to enact legislation to protect the rights and interests of their commercial partners.

In New Zealand, this legislation takes the form of the Major Events Management Act 2007 (Mema). By designating RWC 2011 a “major event” under the act, parties that are not commercial partners of the event are prohibited from marketing goods and services in a way that suggests they are official sponsors or have an association with the event.

The act also contains measures prohibiting counterfeit merchandise and touting of tickets.

While the restrictions are not as extensive as those in 2006 legislation enacted specifically for next year’s Olympic and Paralympic games in London, they illustrate the growing trend of enacting legislation seeking to protect the commercial programme of a major event.

Already rights protection teams are in place in New Zealand, closely monitoring advertisements and promotional activity to ensure the commercial purity of RWC 2011 is upheld. So what is, and is not, permissible in and around WRC 2011?

Advertising and promotional activity

Under the New Zealand legislation, 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 William Webb Ellis trophy 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.

No one other than sponsors is entitled to offer tickets to RWC 2011 matches as competition prizes without the prior approval of Rugby World Cup Limited, the commercial rights holder of RWC 2011. Such competitions are a classic method for a non-sponsor to attempt to establish an association with the event.

Clean zones

Interestingly, in addition to seeking to delivering clean stadiums (ie where signage, merchandise or marketing materials are prohibited, except those relating to official sponsors of the tournament), provisions also exist to ensure “clean zones” around the match venues, such as on motorways and railway lines leading to the stadiums.

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 last tactic took place during RWC 2003 when a competitor of Telstra, an official sponsor, distributed a large quantity of branded marketing material to fans on their way to the opening match in Sydney.

The clean zones will be operational only for certain specified periods before, during and after matches at the designated stadiums.

Exemptions

Certain important exemptions to the legislation exist, including where an activity is not for commercial gain; where the activity has been authorised in writing by Rugby World Cup Ltd; or where an activity is for the purpose of reporting the event in the media.

Enforcement

While RWC 2011 benefits from the protection of the Mema legislation, it would ultimately be irrelevant if its provisions were not strongly enforced. Evidence of the intention to enforce the legislation strongly is evident in the successful prosecution that has already taken place under the act.

In September 2010, following an investigation by New Zealand’s customs service, its ministry of economic development and Rugby World Cup Ltd, a man was fined NZ$20,000 (€12,000) for importing counterfeit RWC 2011 merchandise. It was a warning to those seeking to benefit from unauthorised association with RWC 2011 that prosecution and a fine were more likely than a financial windfall.

Whether you believe ambush marketing is creative or a parasitic activity that borders on cheating, the protection of the commercial rights programme of a major international sporting event is increasingly as important as delivering world-class facilities.

Realistically, it will be impossible to prevent every instance of ambush marketing. Rugby World Cup Ltd and the IRB clearly realise the importance of people enjoying the experience of hosting such a prestigious event, and are encouraging the spirit of public participation. For example, a small bar in Invercargill displaying a sign reading “Watch World Cup 2011 here” is unlikely to be targeted.

The priority will be to secure victories against high-profile ambush marketers in order to scare off others. However, the risk remains that the brainchild of one creative marketing executive could legitimately sidestep their best-laid plans.

Chris Connolly is a solicitor with A&L Goodbody