In Defence of the IOC and Rule 40

Image: ©Cor Vos

It has become traditional at the time of the Olympics to poke fun at the IOC’s supposedly paranoid defence of their intellectual property, which takes the form of their notorious Rule 40.

An article on the website bikeradar.com, written by Editor-in-Chief Ben Delaney, is a typical example. The author begins with an apparently inoffensive paragraph detailing the exploits of some of the best-known cyclists in the male and female pro pelotons: Lizzie Armitstead came fifth, Vincenzo Nibali broke his collar-bone, that sort of thing. He then breathlessly drops his bombshell:

If a company like Shimano, Canyon or any other bike brand publicized any one of those sentences during the Olympics, the International Olympic Committee would not only find it offensive, but would find it reason for legal action against the company and repercussions against the sponsored athlete, including potential disqualification from the Games.

Clearly, we are expected to be outraged. But it isn’t obvious why we should be.

The Olympics is now a hugely valuable asset. But it has not always been so. For years after WWII the Games routinely lost money. The combination of permanent economic crisis and politically-inspired mass boycotts in the 1970s and 1980s led the Games to near-collapse. It was as recently as 1984 that the IOC began to grasp the true potential of sponsorship, leading to the creation of The Olympic Partner Programme. This is now a huge money-spinner, thanks to the involvement of global behemoths like Coca Cola, Panasonic, Samsung and Visa, who pay fortunes to have their brands associated with the Games.

It is hardly surprising, then, if such sponsors (and therefore the IOC, who depend on them) are unimpressed by other companies using the Olympics as a marketing vehicle for their products without paying for the privilege.

So why is this author getting his knickers in a knot? He goes on:

Rule 40 of the Olympic Charter basically says, "if you are an official sponsor that gives the IOC lots of money, please promote the Games. If not, do not try to connect your brand to the Olympics or we will come after you".

That is not how the IOC phrases it, of course. The IOC frames the reasoning as two-fold: First, Rule 40 exists to prevent the over-commercialization of the Games. Ahem. And two, Rule 40 allows the IOC to fundraise by granting its 'Olympic Commercial Partners' exclusive marketing rights to not only images and assets from Rio, but even a whole slew of words and phrases, including words like 'effort' and 'performance'. Yes, really.

Presumably the rather arch “ahem” is intended to suggest that the Olympics are already "over-commercialised". There may be some truth in that accusation. But it is certainly true that, if every company who had any link to the Games, however remote, could market itself off the back of them, the “over-commercialisation” would be on a different scale altogether.

For example: in 1984, Kodak muscled in on Fuji’s official sponsorship of the LA Games by sponsoring TV broadcasts of the action. (Roles were reversed four years later in Seoul.) In 1992, Reebok provided kit to the US basketball team – but Nike sponsored news conferences with the star players, and when the US collected their inevitable gold medal Michael Jordan – perhaps Nike’s highest-profile sponsored athlete – covered up his Reebok logo. In 1994 American Express ran ads pointing out that US citizens did not need a “Visa” to travel to Norway for the Winter Games. Ahem. At the time of the 2000 Games in Sydney, Qantas came up with the slogan “Spirit of Australia” – which bore a not-coincidental similarity to the official Games slogan “Share the Spirit”. Games sponsor Ansett Airlines were not amused.

The problem in these cases is not simply that companies other than official sponsors are receiving publicity from the Games: the problem is that if this isn’t stopped, and the paying partners don’t get exclusivity, there will be no paying partners, and the Games will be back in their traditional economic mess.

The article’s author goes on to provide a “laundry list of ‘inadmissible practices’” for unofficial partners, which forbids:  

  • Any express or implied written/visual allusion to the Olympic Games.
  • Any use of the image of a Participant, taken during the Olympic Games, in combination with a company or brand.
  • Any reference to a Participant’s role in the Olympic Games, or to a Participant’s performances during the Olympic Games or during any past editions of the Games of the Olympiad or the Olympic Winter Games.
  • Any use of the “Olympic listed terms or expressions” alongside the Participant’s name or image.
  • And yes, those "Olympic listed terms or expressions" include words like not only Olympic, Olympics, etc., but also Rio, Gold, Silver, Bronze, Effort, Performance, Challenge, Summer... and 2016.

But the examples given above from previous Olympics show how creative non-partners can be, and how easy it can be for them to piggy-back off the Games without even explicitly mentioning them. Without such examples, the IOC’s rules do indeed appear draconian: but the simple reality is that if the rules aren’t all-encompassing and aggressively enforced, clever marketing people will always find a way around them.

Indeed, it still happens. Running shoe brand Brooks has launched a website Rule40.com and a supposedly “über-generic” clothing line drawing attention to the IOC's purported misdeeds. For bikeradar.com this is “perhaps the most humorous approach to all of this”. It might seem less amusing to competing brands, who have shelled out on a large scale to have their kit, equipment and logos showcased at the Olympics, only to see Brooks both attract attention by skirting round the edges of Rule 40 and claim the moral high ground at the same time – completely free of charge.

What’s more, contrary to what the author suggests, the Olympics is by no means unique in seeking to protect its assets. He writes:

Rule 40 not only hurts brands that support athletes, but also the Olympics as well. Brands can help amplify engagement for the Olympics, expanding the overall impact for the host city as well as the event itself. Imagine if Rule 40 applied to, say, World Cup football or the Super Bowl!

But similar restrictions do apply in other events, including those mentioned. In 2010 Dutch brewer Bavaria sent 36 young women wearing orange mini-dresses to the Netherlands vs. Denmark match at the SA World Cup. Bavaria were not an official sponsor. Unsurprisingly, the women attracted the attention of the TV cameras, and they and the brewery were briefly but memorably given truly global exposure. Within minutes, however, FIFA swung into action, and all of the women were ejected from the stadium. Two were arrested on charges of organising "unlawful commercial activities", and TV commentator Robbie Earle, who had inadvertently provided the tickets, lost his job.

It might still be argued that Rule 40 is more aggressive and draconian even than FIFA’s rules, with its blanket application and attempted protection of the use of perfectly normal everyday words like “performance”. Indeed Matt Pacocha, marketing manager of Stages Cycling, suggests precisely this: 

I can see the IOC protecting their ‘Olympic Assets’ as in specific Olympic terminology, logos and even imagery and broadcasts from the Games, but to have such harsh, blanket rules surrounding the use of the athletes themselves to a point where it really affects their value to the sponsors that provide for their non-Olympic-year pursuits is in no way fair.

But it is worth remembering that, as the article briefly notes, Rule 40 only applies for the duration of the Games – that is, for about four weeks once every four years. It should also be noted that the Olympics is not like other, major, one-off sports-specific events like the World Cup or the Superbowl. In these cases, qualification is essentially running at all times, and such qualification has an extremely high profile – for example, the entire NFL season essentially consists of teams attempting to qualify for the Superbowl. So such events are in people’s minds all the time. Not so the Olympics, which brings together very many, diffuse and mostly minority sports, which hardly anyone follows the rest of the time. Only during the Games – again , a few weeks every four years – does the light of publicity really fall on the Games. So you can hardly blame the IOC for seeking to make hay while the sun shines (and for attempting to stop others cashing in).

So, in general, we might begin to feel that perhaps the IOC is not quite so paranoid, penny-pinching or silly as bikeradar.com suggests.

But what does all this mean for cycling in particular? Fortunately, bikeradar.com is on the case, and Delaney enlists the assistance of a number of industry specialists to explain it to us.

Slate Olson, chief marketing officer of Specialized tells us that “I would like to be able to show and celebrate the riders that we are proud of. This sport is personal and intimate, and the relationships we have with our athletes are real and strong, so it’s tough to be forced to go quiet in their support during one of the biggest events in their careers.

This paints an athlete’s personal sponsor as a sort of proud rich uncle, who wants nothing more than to show his favourite nephews and nieces off to the world, and can’t understand why he isn’t allowed to show pictures of school sports day to his golf partners. But bike brands, and all other sponsors, are in business to make money, not to “celebrate riders we are proud of”. Rather, the riders are paid billboards for the brands. An association with the Olympics clearly has huge value – otherwise why would brands complain at being unable to exploit it? So, again, why should Specialized, or anyone else, be allowed to exploit it for free? What does the “personal and intimate” nature of their sport, or their relationship with their sponsored athletes, have to do with it? And, again, note the allusion to sponsors’ being restricted only “during one of the biggest events in [the athletes’] careers”. As discussed above, outside the actual time of the Games they are free to market their athletes and their brands as they wish.

The author himself goes on to make a different point, as follows.

With the world watching, cycling brands have rolled out a variety of cool custom designs for their bikes, helmets and gear for the Rio Games. But don't expect to see Pinarello talking about Chris Froome or even BMC talking about Olympic road race gold medal winner Greg Van Avermaet. All the best brands can do is retweet what others post.

Firstly, this passage actually betrays a key loophole in the IOC rules, which the bike brands have been quick to exploit. Athletes at the Games are generally required to use and wear only the equipment and kit supplied by their national authorities. But there is an exception for “technical equipment” – which includes bicycles, helmets, and other cycling paraphernalia. So Chris Froome and Geraint Thomas were free to ride the Pinarellos they ride all year round for Team Sky, Greg van Avermaet was aboard his customary BMC, and so on.

And secondly, in practice, the brands’ being limited to retweeting what others post is not much of a restriction. After all, there is no shortage of websites and magazines covering the Games generally, or the “cool custom designs” that brands have “rolled out” specifically for the Olympics. To take an example not entirely at random, the very page on the bikeradar.com site that hosts the article under discussion contains links including “6 cool custom designs for the Rio Olympic Games!” and “Meet Team GB's weapon of choice for the Rio Olympics”.

In fact, readers may be surprised to hear that it is not unheard of for cycling brands to provide sponsored content to media outlets – including websites and their social media accounts. So, here is a challenge: can YOU see a way in which bike brands can use a combination of the “technical equipment” exception, sponsored content and retweeting to get around Rule 40’s restrictions? Answers on a Tweet to the IOC.

This being so, it is hard to have much sympathy for Olson when he complains that 

since most people don’t know about Rule 40 or its impact on marketing and communication, I am sure they are left wondering why an otherwise active brand have not promoted a win or medal performance.

Similarly, bikerader.com avers that

Rule 40 . . . is just silly for cycling fans who have gotten used to following various bike brands' Twitter feeds for news and entertainment.

Come off it. After watching a favoured cyclist win an Olympic medal, does anyone really rush to the Twitter accounts of the rider’s personal sponsors to see how they are exploiting it? (NB: it may also be recalled that it was Olson's Specialized who once registered the term "Roubaix" then tried to sue a Canadian "Café Roubaix" for a breach of their trademark.)  

A final complaint comes from Matt Pacocha of Stages Cycling.

Ultimately, though, Rule 40 is truly most unfair to the athletes. The Olympics have become this billion-dollar enterprise that the athletes receive no profit sharing from — when they are the true stars of the events and reason for their popularity.

But this is preposterous. So Usain Bolt, Chris Hoy, Bradley Wiggins, Laura Trott, etc., have not made enough money off the back of their Olympic exploits? Come off it. Whether or not they are allowed to represent personal sponsors during the actual Games, all these athletes have (deservedly) done very nicely from their Olympic success. And the positive effect of such success hugely outweighs any negative impact due to Rule 40.

(One further observation: whenever anyone complains that they have not “shared in the profits” that others have made, one should always ask whether they would be willing to share the risks, costs and potential losses as well. The same goes here.)

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Sport is a business. Intellectual property has a financial value. Major platforms like the Olympics are hobbled if they cannot offer exclusivity to their supporters. All this is obvious and should hardly need stating.

Conquista is very conscious of the shortcomings of the Olympic movement, and we are also aware also that the IOC does not need defending by us. But the arguments in articles like this one from the bikeradar.com website (and it is admittedly unfair to single this one out when there are many similar ones to be found elsewhere), presented on behalf of, and even explicitly by, the marketing departments of major cycling brands, should not be allowed to pass unexamined.

The “Polemics” blog is currently seeking a top-line name sponsor. 

 

 
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