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15 ESLJ 1 (2017)

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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