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15 ESLJ 1 (2017)
Analyzing Rule 40's Restrictions on Using Athletes in Olympic Sponsorship at Rio 2016

handle is hein.journals/entersport15 and id is 1 raw text is: Grady, J 2017 Analyzing Rule 40's Restrictions on Using Athletes in Olympic A N ASponsorship at Rio 2016. Entertainment and Sports Law Journal, 15: 1, pp.1-5, DOI: https://doi.org/10.16997/eslj.205 INTERVENTION Analyzing Rule 40's Restrictions on Using Athletes in Olympic Sponsorship at Rio 2016 John Grady University of South Carolina, US jgrady@sc.edu This intervention considers changes to Rule 40 of the Olympic Charter during the 2016 Summer Games. It compares predictions made prior to the Games relating to legal issues in Olympic sponsorship and ambush marketing with what was observed on-site and what occurred online pertaining to legal issues in sponsor- ship at Rio 2016. Using examples from the United States and efforts by the USOC to enforce Rule 40, the author considers how Olympic officials have shifted their emphasis toward regulatory efforts aimed at athletes, such as through a relaxed Rule 40, rather than via traditional brand-protection efforts. The implications of this change are suggested in the context of the Olympic legal and business environment. Keywords: Olympic Games; ambush marketing; Rule 40; social media regulation; athlete issues; intellectual property Prior to the start of the 2016 Summer Olympic Games in Rio de Janeiro, one of the issues of greatest legal uncertainty was how Olympic officials would manage the application and enforcement of Rule 40 of the Olympic Charter. Bye-law 3 to Rule 40 restricts how Olympic athletes can be used for advertising purposes during the Olympic Games when their personal sponsor is not also an Olympic sponsor (IOC n.d.). Rule 40 also creates an Olympic 'blackout' period in which advertisements by non-affiliated brands cannot use the name, picture (image), or sports performance of par- ticipating athletes and broadly restricts the use of Olympic-related terms by non-Olympic sponsors, including 'Rio', '2016', 'Victory', and 'Summer' (IOC n.d.). For Rio 2016, the controversial rule was relaxed to allow the continuation of in-market generic advertising featuring participants so long as no direct or indirect association with the Olympics was created (IOC n.d.). Each National Olympic Committee (NOC) was also instructed to develop a waiver process to pre-approve advertising campaigns by non-affiliated brands that featured competing athletes. When the relaxation of Rule 40 was announced (Mackay 2015) by the International Olympic Committee (IOC) in February 2015, many questioned how such a drastic change would alter the legal and business complexities of the Olympic sponsorship model at the upcoming Games. This intervention considers the impact of possible changes by comparing predictions made prior to the Games relating to legal issues in sponsorship, ambush marketing, and social media by the author (see Grady 2016a) with what was observed on-site and what occurred online regarding the legal and sponsorship environment at Rio 2016. While this piece focuses on examples from the United States and efforts by the United States Olympic Committee (USOC) to enforce Rule 40, other NOCs faced similar challenges in applying the revised rule. Before considering the rule change in depth, it is necessary to first understand how Rule 40 now 'fits' within the comprehensive brand-protection plan that is fundamental to each Games' sponsorship-protection efforts. Evolution of the Legal Battle against Olympic Ambush Marketing As noted by Ellis, Scassa, and Seguin (2011), ambush marketing has long been part of the dialogue around sponsorship, yet it has been framed primarily as a business issue rather than as a legal issue. According to these authors, a paradigm shift is occurring whereby legal intervention and the enactment of event-specific laws are now seen as expected ways for local organizing committees to manage the practice of ambush marketing. Nowhere has this paradigm shift played out more dramatically than in the Olympic sponsorship space. Potential host cities are now expected to propose special legislation to address ambush marketing as part of the bidding process (McKelvey & Grady 2008), while such legislation rarely, if ever, gets tested in court once the Games begin. Yet, as social media became a dominant vehicle for conducting ambush marketing (Chavanat & Desbordes 2014), a new regulatory tool was needed. Regulatory efforts, by way of Rule 40, were soon aimed at athletes featured in advertisements by non-affiliated brands (those brands that are not official Olympic sponsors). Perhaps plagued from the start by an approach that considers the actions of the athletes related to personal sponsorship within the historically pejorative connotation of ambush

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