United States: January/February Sports Industry News

Last Updated: February 2 2018
Article by Christopher R. Chase

Winter Is Coming

The 2018 Winter Olympics in Pyeongchang, South Korea are almost upon us. For sponsors of the International Olympic Committee ("IOC"), the US Olympic Committee ("USOC"), or National Governing Bodies within the USOC, marketing materials and activation plans have likely been set for a while. For marketers who are not sponsors of any of the foregoing entities, producing materials aimed at associating with the Winter Olympics could run afoul of several laws, rules, and restrictions prohibiting so-called "ambush" marketing. Non-sponsor marketers seeking to associate themselves with the upcoming games, particularly those considering running social campaigns, should keep the following in mind:

1. Avoid using the words "Olympic" or "Olympiad," the Olympic rings and other official IOC logos, or any variations of these marks. Because of the Ted Stevens Olympic and Amateur Sports Act (see 36 U.S.C. §§ 220501 et seq.), the USOC does not need to prove a likelihood of confusion (the standard for traditional trademark infringement) for use of the foregoing; rather, the USOC just needs to prove that an unauthorized user used these marks for a commercial purpose without its approval.

2. Avoid using other USOC-enforced marks, such as: TEAM USA, PYEONGCHANG 2018, ROAD TO PYEONGCHANG, GO FOR THE GOLD, or LET THE GAMES BEGIN. Although these are not specifically protected under the Olympic and Amateur Sports Act, the USOC can enforce them via traditional trademark enforcement.

3. Avoid using brand-relevant "-LYMPICS" terms, such as AQUALYMPICS, MATHLYMPICS, or BEEROLYMPICS, against which the USOC also enforces its rights.

4. Avoid producing brand-relevant simulated versions of the Olympic rings - such as using onion rings, tires, or donuts in place of the official Olympic rings. During the 2012 Summer Olympics in London, the local organizing committee sent cease and desist letters to a local butcher who placed Olympic ring shaped sausage links in his window display and to a local florist that created a window design made of flowers in the shape and color of the Olympic rings.

5. Avoid using combinations of images and text that suggest an affiliation or association with the Winter Olympics. While it is generally acceptable to use generic seasonal images or sporting event images, the more these items are used together, the more of a risk of running afoul of the relevant laws and rules.

6. Avoid specific congratulatory messages - whether to individual teams or to individual athletes. Although commonly used by brands, congratulatory messages to participating athletes would not only be a potential right of publicity problem (if there was no agreement in place with the athlete) but could also harm their eligibility, as the use of a participating athlete's name, likeness, or performance for commercial purposes without approval of the USOC or other applicable governing body violates IOC Rule 40 - to which all participating athletes must adhere. IOC Rule 40 establishes a blackout period during which participating athletes' names, likenesses, and performances cannot be used without IOC or the applicable governing body's approval - and for these upcoming Games, the period is February 1 through February 28. (There is now a waiver for Rule 40, but if you are first reading about it here...you've already missed the deadline to apply for this waiver, which we discussed back in April 2017)

7. Importantly, all of the foregoing applies to both traditional and social media. Things like congratulatory Tweets, the use of Olympic terms as hashtags, and the use of imagery from the Olympic events in social posts could all pose problems for brands that do not have an affiliation with the USOC.

Is This the Year Sports Wagering Becomes Legal Nationwide?

Perhaps the most significant sports-related lawsuit in years, Christie v. National Collegiate Athletic Association will see the Supreme Court potentially shape sports wagering in the United States. At issue is the NCAA's and the four major leagues' challenge to the State of New Jersey's passage of the Sports Wagering Act in 2012 (and a later version from 2014), whereby the State of New Jersey enacted legislation allowing sports wagering at casinos and racetracks in New Jersey - in contravention of the federal Professional and Amateur Sports Protection Act of 1992 ("PASPA"). PASPA prohibits traditional sports betting outside the State of Nevada. The State of New Jersey, which has lost at both the federal district and appellate court levels in this case, argues that PASPA encroaches on state sovereignty, while the sports leagues argue that the Supremacy Clause in the U.S. Constitution allows laws such as PASPA to be enforced. Essentially, this is about of federalism vs. states' rights.

The outcome of the Supreme Court's decision should determine whether sports wagering is allowed, as well as how it will be regulated and by whom - at the federal level or state by state. Indeed, a number of states have already enacted or proposed legislation allowing sports wagering if the Supreme Court's decision paves the way for state regulation.

All four major pro leagues appear to be opening up to the idea of sports wagering since the lawsuit was originally filed but they would still prefer to see sports wagering regulated by the federal government rather than the states. The NBA in particular has been outspoken, with Commissioner Adam Silver penning an op-ed in the New York Times in November 2014 asking Congress to legalize and regulate sports wagering. Indeed, demonstrating that it wants to be out in front of the issue, an attorney for the NBA recently testified before a New York State Senate committee, urging the state to pass a "comprehensive sports betting bill that would serve as a model for a 50-state solution" and requesting that all such legislation should, at minimum, do the following: monitor betting to prevent "improper conduct" and unusual betting activity; impose a 1% integrity fee on the total amount of bets, to be paid to sports leagues; contain consumer protection requirements; allow leagues to restrict certain types of wagering on their events; and authorize betting on digital platforms (such as smartphones and kiosks), not solely "land-based casinos."

From a sports marketing perspective, legalized sports betting could provide new marketing platforms - and ultimately revenue - for leagues and teams, including new sponsorship opportunities. For example, in England, where sports wagering is common, English Premier League teams with betting firms as shirt sponsors made £47.3 million in revenue for the 2017-2018 season from these sponsorships. The passage of sports wagering legislation could also lead to more gaming-style marketing activations and engagement - with in-arena and digital fan experiences focused on providing gaming-style features.

Saving Face

Duke University's freshman basketball star Marvin Bagley III needs to save face in order to save his NCAA eligibility. The face? His own - which is now appearing on products offered by a third party.

Bagley's father created t-shirts featuring an image of his son's screaming face and spiked hairstyle and gave these t-shirts out to Duke fans prior to a home game at Cameron Indoor Stadium in order to show support. Shortly thereafter, the TeeChip Pro website allowed customers to purchase various products featuring this same image - from t-shirts to mugs to cell phone cases. Unfortunately for Bagley, even if he or his father did not authorize this third party use, the NCAA can still challenge Bagley's eligibility resulting from this promotional use. However, as long as Bagley or Duke University takes steps to prevent TeeChip Pro from selling products with this image, Bagley would be able to show that he is complying with the relevant NCAA Bylaw. According to NCAA Bylaw 12.5.2.2, "f a student-athlete's name or picture appears on commercial items (e.g., T-shirts, sweatshirts, serving trays, playing cards, posters) or is used to promote a commercial product sold by an individual or agency without the student-athlete's knowledge or permission, the student-athlete (or the institution acting on behalf of the student-athlete) is required to take steps to stop such an activity in order to retain his or her eligibility for intercollegiate athletics." It looks like "steps" were taken, as the TeeChip page that formerly offered such items has been removed.

Noted and Quoted

The Business of Dance

Dance Magazine recently published Kimberly M. Maynard's article "All the Legal Terms You Need to Know Before You Sign a Dance Contract," which offers key considerations for dancers signing dance contracts.

The Resignation of Skipper

The New York Post recently quoted Gavin McElroy on the resignation of ESPN President John Skipper.

Watch the Big Game...and the Big Ads.

Sure, an exciting NFL game will be played this upcoming weekend...but don't just watch the Big Game...watch the Big Ads too! Frankfurt Kurnit is proud to have assisted several clients with the production of Super Bowl ads. AdAge has a nice roundup of the ads produced to date.

www.fkks.com

This alert provides general coverage of its subject area. We provide it with the understanding that Frankfurt Kurnit Klein & Selz is not engaged herein in rendering legal advice, and shall not be liable for any damages resulting from any error, inaccuracy, or omission. Our attorneys practice law only in jurisdictions in which they are properly authorized to do so. We do not seek to represent clients in other jurisdictions.

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