Legal issues arise everywhere and in the sports industry the notoriety of such
issues can be expanded given the media coverage leagues, teams and athletes
receive on a daily basis. Sometimes these issues become so high profile it ends
up as being dentrimental for the industry because it casts a negative image of
the league/team/athlete. In PASSIONIS SPORTS we’ve mentioned before our aim of
become a trusted allied for sports organizations so we are going to discuss
some recent legal controversies and how to deal with them.
1. The first one is related to ambush marketing and its negative effect on high
profile sporting events and their sponsors. Ambush marketing is a marketing technique were
brands which are not official sponsors of a high profile sporting event benefit
from the media coverage of the event to get free publicity by associating their
brand to the event. In the last two editions of the FIFA World Cup their have been several
cases of ambush marketing, this issue not only affects soccer but other sports
and even the Olympic Games. The main issue here is that brands that pay an
enormous fee to gain exclusive access and association to the sporting event
lose that exclusive right to be the only brand visible. For last year’s World
Cup FIFA issued warnings to brands looking to engage in these techniques,
before the World Cup automaker Peugeot launched a marketing campaign to benefit
from the World Cup, with such warnings (as well as regulation against this
technique) brands stopped.
But how can an
official sponsor or a sporting event handle this besides regulation which
sometimes can create a negative image? We believe the answer is more marketing,
more content, more engagement, if a competing brand is trying to take your spot
create a unique campaign that shows why you have been “chosen” as the official
sponsor. Nowadays, we need to constantly wow, connect and engage customers
because loyalty is really hard to achieve, so instead of complaining, why not
take it a step further making a unique campaign out of the other brand’s “lack
of originality” or something in this line! If customers see that an official
sponsor is willing to take it to the limit to “win” the results will be
extremely positive, besides the association of “winning” with the actual
victory in sports is just to cool!
2. The second legal controversy is with the right of
publicity of athletes. These case deals with several legal issues, first we are
talking about a licensingdeal the NCAA had with a EA Sports to license their trademarks and use
the likeness of student athletes. NCAA regulations didn’t allow student
athletes to earn revenue from their image, even though this is a right they
have because it is their image being used. In this case EA sports was sued for
using among other the likeness of the players, their names, hometown,
eligilibity and several other traits that clearly distinguished them in the
video game. A group of former student athletes found this to be an abuse and
decided to sue, in the end what happened is that they reached a settlement
where they would have to pay $40 million to these athletes. This case is
particularly interesting because it can change how student athletes’ right of
publicity is handled in the future for further licensing deals!
How can a lincensee avoid this issue? Well, besides
negotiation as in this case, a proper due diligence, find out who owns the
trademarks, the rights of the athletes and which parties need to be involved in
the deal to avoid these type of issues. Other aspect is be guided by
professional ethic and if you think you should contact an athlete/organization
because their image or trademark is part of the deal, it is better to procede
this way! In the end handling these issues correctly from the beginning will guarantee a
prosperous relationship free of conflict!
3. The last case deals with trade secrets inside one of the
biggest sportswear company in the world, Nike! In recent years Nike has been
leading the sportswear market with innovation after innovation in many
different sports such as running, soccer, basketball and now fitness! Recently several of Nike’s top designers resigned from the
company they were quickly hunted by
rival Adidas. Nike decided to sue the group of designers claiming they would
provide Adidas with valuable information based on those secrets! The group of
designers counter-sued, among their claims they say Nike didn’t allege trade
secrets or discoslure agreements on such information. This dispute has yet to
be solved, but it looks it willl turn into a nasty legal battle.
How can a company working in the sports industry avoid this
issue? First of all understanding what can be a trade secret is essential in
order to know how to protect it. A trade
secret can be a process, design, formula, among others and it can’t be easily
identified by others. A company with a trade secret uses it to gain a
competitive advantage and eventually an economic benefit. For example Nike’s
“flyknit” shoe making process can be a trade secret, also an exclusive training
method devised by a coach within a sports organization can be a trade secret as
well. So how do we protect them, it is really important to have clear
communication within your organization as well as Non-Disclosure Agreements
with specific clauses that refer to the protection of the trade secrets as well
as non-compete clauses that will prevent former employees from utilizing such
information if they no longer work in the organization. With these two steps
you can facilitate the protection of the trade secrets, besides open and clear
communication in a positive manner with former employees will also serve your
cause!
In PASSIONIS SPORTS legal issues are not our specialty but
we sure understand them and know how to handle them, our objective is to allow
anyone within the sports industry to keep on with their job as role models for
society and if we can help with legal assitance so be it!
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