Moving the goalposts: the impact of the Sporting Events Bill on event marketing and media

In brief

• The Sporting Events Bill proposes a common legislative framework to apply to major sporting events in the UK.
• The Bill establishes five provisions relating to ticket touting, advertising, trading, unauthorised association and transport, any of which can be applied to future event-specific regulations.
• The aim is to make the UK more competitive in bidding for major sporting events by protecting sponsors and event partners from 'ambush marketing', unauthorised advertising and trading.
• Media reporting is expressly excluded, but content made for promoting something other than the sporting event is not. Attention should therefore be paid to whether reporting could be classed as a commercial promotion.

Background

The Sporting Events Bill, currently at the Committee stage in the House of Commons, intends to provide a common legislative framework to apply to major sporting events in the UK. It seeks to avoid legislative repetition by replacing the need for single-event primary legislation (such as the London Olympic Games and Paralympic Games Act 2006), meaning major events in the UK would not need to start from a blank canvas every time.

The Bill aims to make the UK more competitive when bidding for international sporting events, as events rights owners often require bidders to demonstrate what frameworks they have in place to protect sponsorship packages. The government intends to use the Bill for future events such as the UEFA European Championships in 2028, and to support future UK bids to host events such as the 2035 Women's World Cup.

Amongst other issues, the Bill seeks to address the creation of unofficial associations between a brand and an event, known as 'ambush marketing'. This technique allows brands to capitalise on the goodwill of an event without paying fees, reducing the exclusivity of official sponsors. Ambush marketing can appear by 'intrusion' or by 'association'. 'Intrusion' involves tactics such as putting up advertising boards close to events, such as when Nike bought a building next to the 1996 Atlanta Olympic Games village and filled the outside with Nike branding. 'Association' comprises marketing campaigns where the public is misled into viewing the brand as associated with the event, such as when the fashion brand Zalando SE placed a billboard in Rome during the UEFA Euro 2020 tournament in Italy asking, 'who will be the winner?'.

There is currently no single piece of legislation targeting ambush marketing in major sporting events. The Bill sits within a wider framework of intellectual property rights and advertising rules:

• Trade Marks. If the event has registered marks, the mark owner may be able to bring infringement proceedings against businesses that use similar or identical marks in unauthorised marketing. However, adept marketers can avoid trade marks while still associating with events.
• Passing Off. If there is goodwill in an event, passing off could be established if there is misrepresentation by a business which confuses the public into thinking that they have an official association with the event, leading to the event organiser suffering damages. The difficulty is that it is often clear that ambush marketers are not the official sponsors, making it harder to establish misrepresentation.
• Copyright. There may be copyright in event media, such as photographs or videos. If the event owns the copyright, they may be able to bring infringement proceedings against an ambusher that uses this media. However, ambush marketers may easily develop associations with events without using copyrighted works.
• Design rights. There may be design rights in aspects of the event's marketing and merchandise, such as mascots. Similarly to copyright, ambush marketers can avoid infringing design rights while still making associations with the event.
• Event-specific legislation, such as the Birmingham Commonwealth Games Act 2020.
• Advertising codes, such as the UK Code of Non-broadcast Advertising, Sales Promotion and Direct Marketing (CAP Code) and the UK Code of Broadcast Advertising (BCAP Code). While these are not directed at ambush marketing, some general rules may apply such as the requirement that advertising claims must be accurate and cannot mislead. Complaints can be made to the Advertising Standards Authority (ASA), but previous rulings suggest that the ASA will not likely deem the public to be misled unless official logos or specific claims to be an official sponsor are made.

Which events qualify?

To fall within the scope of the framework, a sporting event must be:

1. Held wholly or partly in the UK; and either
2. Likely to be both of significant international or national interest and to bring social or economic benefits to the UK or a part of it (the 'qualities' limb). This could include 'bid-for' events such as FIFA World Cups, but also regular UK events such as the Wimbledon Championships, the Open Championship, and the Formula 1 British Grand Prix; OR
3. Likely to facilitate holding other sporting events in the UK which meet the qualities limb (the 'strategic' limb). This could include hosting UEFA Under 21 Championships which could help secure rights to more prestigious events.

What are the key provisions?

The Bill establishes five overarching frameworks relating to ticket touting, advertising, trading, unauthorised association and transport. It gives the Secretary of State and devolved governments the power to make regulations applying one or more of the provisions to any qualifying sporting event. The most relevant provisions for brands and media owners are the advertising, trading and unauthorised association provisions.

Restricted advertising zones

Under the Bill, it would be a criminal offence for a person to carry out, arrange or permit an advertising activity in a restricted advertising zone during a specified period without authorisation from a designated authorising person. The maximum penalty of the offence is, on summary conviction, an unlimited fine in England and Wales, a fine of no more than £50,000 in Northern Ireland and a fine not exceeding £20,000 in Scotland or, on conviction on indictment in Scotland, an unlimited fine. This is similar to the penalties in previous legislation such as the London Olympic Games and Paralympic Games Act 2006. Authorisation may be subject to various conditions, such as specifying places and periods where the advertising activities may, or may not, be carried out.

All the above (i.e. a restricted advertising zone, a specified period and an authorising person) would be defined by event-specific regulations drawn up around the time of particular sporting events. The Bill only states that restricted advertising zones must be an area used for or in connection with the event, or in the vicinity of these areas, and that the specified period can be no longer than ten days before the start of the event and five days after its finish. At a minimum, the zones are likely to encompass areas which are within the view of television cameras covering, or spectators watching, the event, as was the case in London 2012.

An 'advertising activity' is deliberately defined broadly within the Bill, and would include anything done to promote a product, service or business specifically to members of the public who are in a restricted advertising zone or watching or listening to a broadcast of the event. Brands will not be able to rely on the fact that their act was carried out in accordance with an advertising licence.

Restricted trading zones

Similarly to the restricted advertising provisions, the restricted trading provisions would make it a criminal offence to carry out, arrange or permit a trading activity in a relevant public part of a restricted trading zone during a specified period. The maximum offences are identical to the restricted advertising zone fines. Relevant public parts of a restricted trading zone relate to highways, buildings used for the event or for parking, or other places to which the public would have access. Trading activities are also defined broadly to include selling products, providing services for reward or appealing for money.

Prohibition on unauthorised association

Under this provision, a person acting in the course of business may not engage in the unauthorised use of a representation in a way likely to suggest an association between the sporting event and their business. This formulation covers implied endorsement as well as intellectual property infringement. Unauthorised associations could relate to a contractual or commercial relationship, a corporate or structural connection, or the provision of financial or other assistance. 'Use' of a representation is non-exhaustively defined in the Bill, demonstrating how broadly this provision could be applied in practice.

The court will view any breach of the provisions as an infringement of a property right of a designated enforcer and may order remedies similar to those for intellectual property infringement, such as damages, account of profits, injunctions and orders over infringing goods.

The Bill provides exceptions to the prohibition on unauthorised association where:

1. There is pre-existing use of a trade mark, design, representation, or other intellectual property right;
2. There is honest use of a person's name or address or indications concerning the characteristics of goods and services; and/or
3. The representation is made in a report of the event, to share information about the event or to promote the report or information. However, this exception does not relate to material that is published for the purpose of promoting something other than the sporting event.

What does this mean for brands and media companies?

If the Bill becomes an Act of Parliament and regulations are adopted for specific events, the new legislative framework should provide greater clarity to brands and media companies on how marketing activities across major sporting events are to be regulated. While further, event-specific regulations will need to be enacted for each sporting event, the Bill would remove the need to enact specific primary legislation every time and establishes a standard framework for secondary legislation to be drafted and applied. This would arguably allow a wider range of major UK events (like the Wimbledon Championships, which had previously solely relied on their own internal measures to protect the event from this type of issue) to adopt regulatory anti-ambush marketing provisions. This suggests a potential shift in landscape for those companies who have historically relied on ambush marketing to generate brand exposure at reduced costs.

It seems the interests of official sponsors and event partners would be better shielded from the threats of ambush marketing under the unauthorised association provisions put forward in this Bill. Their interests would be further protected by this Bill preventing unauthorised advertising and trading in key event areas during major events, allowing key sponsors to push their own brand through strong, undiluted associations with sport (arguably increasing the value of these types of sponsorships).

For media companies, the exclusions relating to the prohibition on unauthorised association are most significant. Reporting and information sharing about the sporting event is expressly excluded from the provisions, but material that is made for the purposes of promoting something else is not. Media companies would therefore need to take care when making representations in sponsored content and branded coverage, considering whether reporting might veer into commercial promotion, thereby potentially falling within the unauthorised association provisions.

It is worth noting that this Bill provides a standard framework to allow room for event-specific regulation. This inherent flexibility, while allowing for event-specific provisions, does also introduce an element of uncertainty, as it is secondary legislation sitting within the framework that may ultimately determine whether a brand's actions are lawful or not. Future application of the Bill is also discretionary, meaning the legal landscape for brands and media owners may still shift with each event.

How Mishcon de Reya can help

We will be keeping abreast of developments in this area and will continue to provide updates on our website as the Bill progresses. If you would like to discuss this Bill and ad-compliant strategy more generally, please contact our Advertising and Marketing team.