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Adam Morallee: “Ultimately, a commercial interest has been favoured by the legislators.” Is the UK legislature moving towards a US model with the concerns of big business at its heart?
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Adam Morallee
Adam is a partner in the IP department, looking after the enforcement and protection of intellectual property rights. He is particularly adept at obtaining injunctive relief, often on a without notice basis, and is also an experienced advisor to rights owners, governing bodies, clubs and professional sportsmen on a variety of regulatory issues.
Adam believes that powers in the 2012 Act are far more positive for the sponsors than the Olympic Games themselves. Do you think there is a shift towards a US model where big business concerns are a key influence on legislation?
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Whilst I would agree that the effect of the London Olympics Act 2006 (the Act) favours commercial interests, it is not in itself an indicator that the UK legislature is moving toward a US ‘big business’ focused ethos.
The new ‘association right’ that the Act creates, undoubtedly extends intellectual property rights further than ever seen in the UK, giving as it does powers to prevent ‘unauthorised associations’ to the Olympics, as defined within the A and B lists of prohibited words and symbols.
To some this extra protection is the necessary price to ensure the level of sponsorship that is required to fund the games on the scale that has become expected. Whilst to others it it goes too far and will prevent many of UK businesses being able to benefit at all from the UK hosting of the Olympics.
Controversial measures to protect the interests of sponsors are not exclusive to the Olympic games though. At the 2006 World Cup, for example, a group of Dutch fans had to remove their traditional orange trousers before they entered a stadium as they had the name of an non sponsor brewery printed on them. The IOC, like other sporting organisations, demands tougher protection for its sponsors as the rising price of sponsoring the Olympics has lead to increased attempts at ambush sponsorship, most notably at the 1996 Atlanta games, where Nike succeeded in getting a large amount of product placements into the games arena’s enraging the official sponsor Adidas.
I do believe, as Mr Morallee says, the Act can be said to have gone too far in its protection of commercial interests. As the effect of the legislation will be to prevent many smaller businesses from benefiting from the Olympics, for instance, it appears pubs could be prevented from advertising the fact they will be showing the games events on Televisions and only a very limited number of authorised businesses will be able to market products referencing the games.
However it cannot be inferred from the Act alone that Britain’s legislators are moving towards favouring commercial interests. Enacting such legislation was a precondition of hosting the games, that the IOC demanded all applicants commit to before the bids were even made.
There is though evidence of the UK legislature favouring commercial interests of big business. This can be seen in the Legal Services Act which is already beginning to move the provision of legal services to a smaller number of larger firms as evidenced by the mergers of some of the UK’s largest law firms and the creation of the ‘Quality Solicitors’ brand. It can also be seen in David Cameron’s unprecedented use of the UK’s veto at the European summit in December, principally to protect the City of London from the effects a financial transaction tax. It does seem then that the UK legislature is increasingly favouring the interests of big business, particularly as the economic situation focuses much attention on preserving and growing businesses.
The Olympics is not business as usual. For any country, it is a once in a lifetime event with huge global significance, deserving particular consideration.
Estimates place global TV advertising revenue at $182 billion for the last Games in Beijing, and viewing figures of up to four billion. Large numbers, but that value can only be realised because of the exclusive rights given to businesses by The Olympic Partner Programme.
That arrangement has been placed under increasing threat as those, attracted by huge payoffs from freeloading on the Olympic brand, conduct what has been termed as ‘ambush marketing’, a ploy that has caused considerable controversy at other global events, notably the football World Cup in 2010.
The UK Government has said the 2012 Act is specifically designed to prevent such tactics, with provisions that build upon existing legislation and close loopholes in trademark and passing off law exploited by these canny marketing strategists.
Domestic legislation that doesn’t fully protect the exclusive relationship sponsors have with the Games means a dilution of advertising value and less revenue. This is bad for the Olympics financially, but importantly also for UK taxpayers, who would be forced to pay the shortfall over and above £9.3 billion they have already spent to host the event, according to the Government.
But does the Act go too far and as the Institute of Practitioners in Advertising says, damage the Olympics’ ‘halo effect’? In response, the Government says it places a high priority on ensuring that small firms are able to take advantage of the Olympics and will adopt a ‘proportionate and common sense approach’ to prevent instances of unfair association with the Games.
Yes, one can nostalgically look to the amateur ideal of the Olympics, but the reality is the world has changed – the costs of hosting the Games are huge and sport is now professional, global and very big business. Olympic ideals can be universal, but for the Olympics to survive the brand cannot be.
Finally, as the Act responds to a single issue with unique circumstances and will not have a lasting presence in UK law I would add it offers inconclusive proof of any movement in the UK to US style legislation. As Adam Morallee says, the bottom line is London would not have won the bid had it not promised the Act, which interestingly takes its roots from laws enacted for the Sydney Olympics in 2000 rather than any particular influence from the US.
It is evident that the 2012 Act is geared to the commercial interests of the Olympic sponsors. Yet I do not agree that this necessarily leads to a shift of UK legislation to be largely influenced by the interests of big businesses.
As Adam Morallee himself states, the condition for countries bidding for the Olympics laid down by the IOC was that the winning country must pass legislation which protects the rights of the Olympic Games, the brand and its sponsors. Thus whilst the 2012 Act contains the most extreme brand protection regulations in UK legislation to date, an Act of this nature was compulsory in order for the UK to win the privilege of hosting the 2012 Games. Whether this move will lead to future legislation passed in favour of commercial interests like that of the US is unknown, but as Adam observes this is not the “British way” and, for the moment at least, we are yet to see such commercially-focused UK legislation arise. In this respect, I therefore agree with Josh Levy’s point that the Olympic Games is a unique sporting event and this 2012 Act does not necessarily represent the move of sporting-related or wider legislation in general.
Adam also comments that the 2012 Act does more to benefit the sponsors than the actual Games themselves. Whilst it is the sponsors who ultimately benefit from their association with the most well-known sporting event in the world and the high protection against ambush marketing the 2012 Act brings, the Games themselves are after all benefitting from the sponsors’ payment for this privilege. With a reported figure of £100 million deal with Adidas alone, the Games are predominantly funded by sponsorship and therefore benefit dramatically by this legislation as such high protection for sponsors has invariably lead to record breaking sponsorship deals for the Games. Ultimately, it is those smaller businesses who are unable to afford official sponsorship of the Games who are to lose out in this deal. However, whilst the use of ambush marketing is prevented, the Olympic Games will still draw much needed revenue back into many UK businesses, whether it be a construction company, a hotel chain, or even a small independent B&B located near to the Games themselves.
When Baron de Coubertin introduced the modern Olympic Games as a way of celebrating physical excellence and promoting world peace, he created an Olympic ‘identity’, namely through the flame, the motto and the legendary flag of five symbolic rings.
The design of the rings represents the five continents of the world while the six colours (including the white background) are those that appear on all the national flags of the world.
Thus, one would assume that the host-country legislation enforced by the IOC is to protect the ‘identity’ of the Olympic Games. At least that is what de Coubertin would have intended.
The 1984 Los Angeles Games revolutionised the Olympics. The USA made a surplus of £215 million and turned the sporting spectacle into a commercial opportunity for multi-national corporations such as Coca-Cola and McDonalds to reap significant financial rewards from the Games. Neither of these organisations are particularly associated with athletes’ sporting excellence.
The 2012 legislation has transformed the Games into ‘brand property’ by allowing sponsors’ exclusive use of the Olympic brand in their advertising and marketing campaigns. It seems that the government’s main focus for the Olympic Games is financial gain rather than sporting excellence.
The legislation regards the use of similar advertising and marketing tactics by Britain’s local businesses, such as the use of five sausages in the shape of the Olympic rings, by a local butcher from Weymouth, to be “ambush marketing”. Anyone risking unofficial association with the Olympic Games faces being sued for infringement.
When London won the bid to host the Olympics, the public and media praised how beneficial it would be for the struggling British economy. The Games would provide a resurgence of capital into British businesses and pave the way for a lasting legacy. It is not difficult to see the definite shift in government thinking with the introduction of the 2012 legislation. An aim of the Games once may have been to stimulate growth in the small business sector but the legislation makes it clear that the focus is now on maximising investment from big business sponsors, largely US companies.
For sport in particular, there is a definite shift towards the US business model – it is no longer just about the competition, and proving strength, skill and talent, but has become a commercial opportunity for big business investment. Sport in the US has become so commercialised that the publicity and deliberation over which sponsor gets the advertisement slots during the Super Bowl, overshadows the game itself. The 2012 legislation shows that the UK is following suit.
To a certain extent, with the importance of sponsorship, I agree that organisations should be rewarded for their substantial investments. However, immersing big-money business concerns into legislation is not appropriate, as it runs contrary to the original government business policies. It seems that the UK is willing to do just that in order to compete on a level playing-field with the US, both on and off the pitch.
As a Politics undergraduate, I would have to disagree in saying that this piece of legislation does not show a trend towards US tendencies to favour big businesses. If this were the case, we would see the government passing more legislation of this nature in other areas of society, but this has not happened. This is because our political system is different to that to that of the US. More emphasis is placed on the campaigning of a single person in the US, that person being the Presidential candidate. This person must rely on huge funding, possibly from wealthy individuals, who are then given political posts in return through the political device of patronage. Therefore Mr Morallee is certainly correct when he says that such political actions are for more “naked” in the US than they are in the UK, as is relative to my previous point.
In the UK, however, there is far more of a focus on parties as factions, rather than a single individual. This is, once again, due to differences between our political systems. Thus, we do not see this type of funding or “corruptness” laid bare. Therefore I think that the 2012 Act is justified in its actions because it is merely safeguarding the fact that we, as a country, have received the privilege of hosting the 2012 Olympic Games. I do not believe this Act promotes a shift from the ‘spirit’ of the games to what is essentially an opportunity for businesses to make money. Ultimately it does not make a difference to the ordinary person watching the games, be it at home or in Wembley Stadium. On the other side of the coin, if it is arguable that the Olympic Games is an opportunity to make money, and if this Act allows for that to happen to a greater extent than in previous years, then there is no reason for this to be unjustified.
Finally Mr Morallee talks about how no other sporting event has this type of safeguarding for businesses or sponsors. Whilst this may be true, it is also true that no other sporting event is as big or well respected as the Olympic Games. Surely, therefore, it is fair to go “too far” in its protection.
Whilst I do very much respect Mr Morallee’s point of view, and do agree with the lawful aspects of his talk, I do not think there is any real evidence to show a shift towards an American way of thinking when it comes to businesses and profit. A final point to note is that even if there was such a shift, it would not spell corruptness. Some might look at the benefits of making extra money from the Act, especially at a time of economic downturn across the UK and across the globe.