STAYING AHEAD OF THE GAME: LICENSING, SPONSORSHIP, …...(television, radio, internet, wireless,...
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1 STAYING AHEAD OF THE GAME: LICENSING, SPONSORSHIP, AND NEW TECHNOLOGY IN THE WORLD OF SPORTS AND MEDIA Presented by the Association of Media and Entertainment Counsel Moderator: Richard Wirthlin Panelists: Gary Gertzog, Michael Hartman, Bill Ordower, & Bobby Sharma Thursday, July 14, 2010 HSBC Private Bank International 452 5th Avenue New York, NY 10018 Registration: 8:00‐8:30 AM Seminar: 8:30‐10:00 AM AGENDA Time Topic Contributors 8:30‐8:40 Welcome & Introduction Moderator 8:40‐9:00 How does broadcast television compete with All Panelists pay TV and satellite to stay competitive and relevant? 9:00‐9:10 What are the implications of the American Needle, Gary Gertzog Inc. v. NFL decision? 9:15‐9:30 What is the impact of Ambush Marketing? All Panelists 9:30‐9:50 In the face of a changing economy, how has Bill Ordower this affected sports franchises in terms of & Bobby sponsorships, facilities, financing? Sharma 9:50‐10:00 Q&A All Panelists & Moderator * These are the intended topics but please note that AMEC encourages questions and an organic, lively discussion throughout the panel.
Transcript of STAYING AHEAD OF THE GAME: LICENSING, SPONSORSHIP, …...(television, radio, internet, wireless,...
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STAYINGAHEADOFTHEGAME:LICENSING,SPONSORSHIP,ANDNEWTECHNOLOGYINTHEWORLDOFSPORTSANDMEDIA
PresentedbytheAssociationofMediaandEntertainmentCounsel
Moderator:RichardWirthlin
Panelists:GaryGertzog,MichaelHartman,BillOrdower,&BobbySharma
Thursday,July14,2010
HSBCPrivateBankInternational4525thAvenue
NewYork,NY10018
Registration:8:00‐8:30AMSeminar:8:30‐10:00AM
AGENDA
Time Topic Contributors8:30‐8:40 Welcome&Introduction Moderator8:40‐9:00 Howdoesbroadcasttelevisioncompetewith AllPanelists
payTVandsatellitetostaycompetitiveandrelevant?
9:00‐9:10 WhataretheimplicationsoftheAmericanNeedle, GaryGertzog
Inc.v.NFLdecision?9:15‐9:30 WhatistheimpactofAmbushMarketing? AllPanelists9:30‐9:50 Inthefaceofachangingeconomy,howhas BillOrdower
thisaffectedsportsfranchisesintermsof &Bobbysponsorships,facilities,financing? Sharma
9:50‐10:00 Q&A AllPanelists
&Moderator*ThesearetheintendedtopicsbutpleasenotethatAMECencouragesquestionsandanorganic,livelydiscussionthroughoutthepanel.
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GARYGERTZOGSeniorVicePresidentBusinessAffairs&GeneralCounselNationalFootballLeagueGaryGertzogjoinedtheNFLin1994asVicePresidentandGeneralCounselofNFLProperties,Inc.Overtheyears,hisroleattheNFLhasexpandedtoincludeoveralllegalandbusinessaffairsresponsibilityfortheNFL’scommercialoperationsincludingmedia(television,radio,internet,wireless,etc.),marketing,consumerproductlicensing,corporatesponsorships,eventsandintellectual
property.Gertzoghasplayedamajorroleinawidevarietyofcomplexcommercialarrangementsincludingthoseinvolvingnewbusinessmodelsanddealstructures,includingtheNFLMasterAgreement(whichallocatesintellectualpropertyrightsbetweentheNFLandMemberClubs),theNFL’suniquesponsorshipandinternetagreementswithNFLPlayersAssociation/PlayersIncandindustrysettingdealsforapparel,videogame,creditcard,beverageandtelecommunicationproductsandservices.HehasalsoledtheNFL’seffortsinimportantlitigationmattersincludingtheprotectionoftheintellectualpropertyrightsoftheNFLandMemberClubs.Duringhiscareer,GertzoghasservedasakeyNFLseniorexecutivewithresponsibilityforactiveandretiredplayerbusinessprogramsincludingtheProFootballHallofFame,NFLAlumni,NFLPlayerAssociation/PlayersIncandtheNFLQuarterbackClub.
MICHAELHARTMANSeniorVicePresident&GeneralCounsel
DIRECTVLatinAmerica
MichaelHartman,hasbeenSeniorVicePresident&GeneralCounselofDIRECTVLatinAmericasinceApril2004.Hartmanoverseesall
legal,regulatoryandgovernmentalaffairsofthecompany.DIRECTVLatinAmericaanditssubsidiariesarethelargestpaytelevision
operatorinLatinAmerica,withover7millionsubscribersthroughouttheregion.DIRECTVLatinAmericaisanoperatingunitofDIRECTV(DTV),
whichalsohasover18millionsubscribersintheUSandownsregionalsportsnetworksinSeattle,Denver,andPittsburg.
PriortojoiningDIRECTVLatinAmerica,HartmanworkedatCycleLogic,Inc.(formerlyStarMediaNetwork,Inc.),whichhejoinedinJuly2000andofwhichhebecameGeneral
CounselinNovember2001.FromNovember1994toJune2000MichaelwasanassociateintheCorporateDepartmentofDebevoise&Plimpton,wherehefocusedintransactionsinLatinAmericaandtheIberianPeninsula.HereceivedaJ.D.fromtheColumbiaUniversity
SchoolofLaw,anM.A.inHispanicLanguagesandLiteraturesfromtheUniversityofCaliforniaatBerkeley,andaB.A.fromtheUniversityofMichigan.HartmanspeaksSpanish
andPortuguese.
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BILLORDOWERSeniorVicePresidentandGeneralCounselMajorLeagueSoccer(MLS)&SoccerUnitedMarketing(SUM)Bill Ordower oversees all significant legal matters for MLS and SUMincluding the areas of sponsorship, broadcasting and new media,licensing, property rights acquisition, stadium lease agreements andinternational game promotion. His responsibilities also includedevelopingandmanagingthetrademarkstrategyfortheLeagueand itsclubs.
Recently,Ordowerhasbeenactivelyinvolvedinaflurryofexpansionactivity,withtheLeagueexpanding to Philadelphia, Vancouver, Portland andMontreal, all by 2012. He also played aleadingroleinthefinalizationofanew5‐yearcollectivebargainingagreementandaidedinthere‐launch of MLS’ new website, MLSsoccer.com. Ordower also created, and continues tomanage, the League’s Substance Abuse and Behavioral Health Program, one of the mostcomprehensiveandforward‐thinkingprogramsinprofessionalsports.Ordowerearnedhislawdegreein1996fromTheGeorgeWashingtonUniversityLawSchoolinWashington,D.C.OrdowergraduatedfromBostonUniversity,magnacumlaude,in1993withaBachelorofArtsdegreeinEnglish.
BOBBYSHARMA
VicePresident&GeneralCounselNBADevelopmentLeague
AsVicePresident&GeneralCounseloftheNBADevelopment
League,BobbySharmaservesasakeybusinessexecutiveandthechieflegalofficerfortheNationalBasketballAssociation’sminorleagueanditsvariousoperatingentities,havingjoinedtheNBAin
July2002.
Sharmamanagesallcurrentleagueandteambusinesses,aswellasexpansion.HeisresponsibleforallNBAD‐Leagueagreements,andoverseesvariousbusiness,legal,and
basketballoperationalmatters,includingadministrationofallleaguepoliciesandprocedures.Hisareasoffocusincludeteamownership&operation,arenas,sponsorship,
merchandise,marketing,intellectualproperty,broadcasting,product/digitalcontentlicensing,contests&sweepstakes,employment,anti‐doping,andsecurity.
InApril2009,Sharmawasnamedoneofthe25MostInfluentialSouthAsianExecutivesintheMedia&EntertainmentIndustrybyKorn/FerryInternational.
AfterreceivingbothhisB.A.andJ.D.fromDukeUniversity,SharmaservedonthepresidentialcampaignstaffofformerU.S.Senator,andNBAHallofFamer,BillBradley.
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RICHARDL.WIRTHLIN,ModeratorPartner,Latham&WatkinsLLPRichardL.WirthlinisaCorporateDepartmentpartnerinthefirm’sLosAngelesofficeandistheGlobalChairofthefirm’sMedia&EntertainmentIndustryGroup,whichalsoincludesSportstransactions.Heisafoundingmemberofthefirm’sInternationalLawGroupandCommunicationsPracticeGroup,aswellasamemberofthefirm’sMergers&AcquisitionsPracticeGroupandEmergingCompaniesPracticeGroup.HeisalsotheformerManagingPartner
ofLatham’sMoscow,RussiaOffice.Wirthlin’spracticeinvolvesavarietyofinternationalanddomesticbusinesstransactions,withparticularexpertiseandfocusonentertainment,media,internetandnewmedia,sportsandtelecommunications.Hispracticealsoinvolveshightech,mergersandacquisitions,privateequityandemergingtechnologymatters.WirthlincurrentlyservesasprimarycounseltoboththeLosAngelesSportsCouncil(LASC)andtheSouthernCaliforniaCommitteefortheOlympicGames(SCCOG).
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WhyNFL'sSupremeCourtLossIsn'tMuchofaLoss May24,2010By:KristiDoshThismorning,theUnitedStatesSupremeCourtansweredthequestionofwhethertheNFLisactingasoneentityoras32separateteamswhenitenterscontractsforproductionofitemssuchasjerseysandhats.TheunanimousconclusionwasthattheNFLis32separateentities,evenwhenenteringacontractasaunitedgroup.
ThisrulingistechnicallyalossfortheNFL,buttheNFLdidn'thavemuchtolosetobeginwith.AlthoughtheNFLwonatthelowercourtlevel,whereAmericanNeedle'scasewasthrownout,bothAmericanNeedleandtheNFLappealedtotheSupremeCourt.TheNFLwashopingforbroaderantitrustlawprotection,buttheresultisnotsurprising.
MajorLeagueBaseballremainstheonlyprofessionalsportsleaguetoenjoybroadprotectionfromthenation'santitrustlaws.Thoselawsaremeanttoencouragecompetitionandpreventunfairtradepractices.Ina1922ruling,theUnitedStatesSupremeCourt,declaredthatbaseballwasexemptfromtheantitrustlawsbecausetravelacrossstatelineswasmerelyincidentaltothegame.Inorderforantitrustlawstoapply,abusinessmustbeengagedininterstatecommerce.Yearslater,thecourtwouldrulethatbaseballdoesinvolveinterstatecommerce,butwouldchoosenottoremovebaseball'sexemptiononthegroundsthatbaseballhadoperatedundertheassumptionthatitwasexemptforoverfiftyyears.
TheNBA,NHL,NCAA,MajorLeagueSoccerandNASCARalljoinedNFLintheappealtothehighcourtinthehopesthatantitrustlawswouldbebroadenedforallprofessionalsports,butIdon'tthinkanyone,includingtheleagues,expectedthemtoprevail.
AmericanNeedlesuedtheNFLonthegroundsthatall32teamscolludedtokeepthemfrommakinglicensedhatsbyenteringintoanexclusive10‐yearlicensingdealwithReebok.TheNFL'sargumentwasthattheteamsactedasasingleentitywhenenteringlicensingagreementssuchasthis,andthuswereincapableofcolluding.
JusticeJohnPaulStevens,writingfortheunanimousCourt,said:
AlthoughNFLteamshavecommoninterestssuchaspromotingtheNFLbrand,theyarestillseparate,profit‐maximizingentities,andtheirinterestsinlicensingteamtrademarksarenotnecessarilyaligned.
TheNFLwillnowhavetoreturntothelowercourtforatrialonthemeritsofAmericanNeedle'scase.Essentially,theNFLisbackwheretheybegan.AlthoughtheytechnicallywerethelosingpartyattheSupremeCourt,therulingleavestheNFLoperatingunderthesameantitrustprovisionsasalways.AmericanNeedlewillhavetoprovethattheteams
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colludedinanillegalrestraintoftrade(notallrestraintsontradeareactuallyillegal).Personally,I'dbeshockedifAmericanNeedleprevailed.Exclusiveagreementsareenteredinsports,andinbusiness,allthetime.TheNFLshouldbeabletomakeastrongcasethattheexclusiveagreementwithReebokwasenteredintowithoutviolatingantitrustlaws.
Kristiisanattorney,founderofIt'saSwingandaMiss(www.itsaswingandamiss.com),andauthoroftheforthcomingbook,"BalancingBaseball:HowCollectiveBargainingHasChangedtheMajorLeagues."
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AmericanNeedlevs.NFL:LookingForward May26,2010By:KristiDoshSincewritingmylastpostonAmericanNeedlevs.NFL,Ihavereceivedseveralquestionsregardingwhatwillhappennext.First,andmostimportantly,theSupremeCourtdidnotdecidethemeritsofthematterathand,whichwaswhethertheNFLteamscolludedtoexcludeAmericanNeedlefromproducingNFLmerchandiseinviolationoftheShermanAct.TheSupremeCourtonlyruledastowhethertheNFLshouldbesubjecttotheantitrustlawsinthissituation.
InorderforthelowercourttoruleinfavorofAmericanNeedleonremand,itmustfindtheNFLviolatedSection1oftheShermanAct(aportionofournation'santitrustlaws).Section1prohibits"combinations,contracts,orconspiracies"thatareanticompetitiveinnatureandeffectcommerce.AmericanNeedleassertedinitssuitthattheNFLviolatedSection1oftheShermanActbecausetheteamscolludedtograntanexclusivelicensetoReebok,whichpreventedothervendorsfromobtaininglicensingrightsforheadwear.
TheUnitedStatesCourtofAppealsfortheSeventhCircuitruledthattheteamsintheNFLactedasasingleentitywhenlicensingteamtrademarkscollectively,basedontheirneedtoactcollectivelytocompetewiththeotherprofessionalsportsleaguesforentertainmentdollars.Essentially,becausethecourtruledthattheteamsactedasasingleentityintheirlicensingactivities,theycouldnotbefoundinviolationofSection1oftheShermanAct.TheSupremeCourt'srulingonMondaymeansthatthecasewillberemandedtothelowercourtforahearingonthemeritsofthecase.However,theSupremeCourt'sdecisiondoesnotsuggestthatAmericanNeedlewillbetheprevailingparty.AmericanNeedlestillhasacasetoprove.
InorderforthelowercourttofindtheNFLguiltyofviolatingSection1oftheShermanAct,AmericanNeedlewillhavetoovercomethe"ruleofreason"test.Theruleofreasonanalysis,firstannouncedina1911case,requiresthecourttoweighwhethertheanti‐competitivebehaviorisanunreasonablerestraintoftrade.Putsimply,theanti‐competitiveeffectsoftheactionwillbeweighedagainstthebusinessjustifications.
Inshort,itmeanstheNFLcanmakeastrongcasehere.TheNFLneedonlypresentevidencethattheygarnergreaterbargainingpowerwhenall32teamsjointogethertolicensetheirtrademarks.Infact,JusticeStevens,whowrotetheunanimousopinionoftheSupremeCourt,includedcommentsintheopinionrecognizingthattherearetimeswhenalloftheteamsmustunite,suchaswhenschedulinggames.Healsonotedthatinorderto
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maintaincompetitivebalanceandsuccessforallteams,somecollectiveactionsmightbejustified.ThislanguagewillbesurelybeusedbytheNFLtomaketheircaseinfrontofthelowercourt.Thefactis,all32teamsauthorizedNFLProperties,LLCtosolicitbidsforanexclusiveheadwearlicensein2001.ThehighestbidderwasReebok,towhomtheexclusivelicensewasgrantedforaten‐yearperiod.Presumably,eachteambenefittedfrompoolingtheirtrademarkrightstogetherinordertogetthebesteconomicterms.Also,it'ssafetosaythatbyofferinganexclusivelicense,theyalsoincreasedtheirbargainingpower.Inaddition,eachteamwillpresumablyhaveequalopportunitytobenefitunderthelicensingagreement,whichwouldn'tnecessarilybethecaseifeachteamindividuallysoughttosolicitbidsforaheadwearlicense.Asadditionalammo,NFLProperties,LLCconductedabiddingprocessbywhichtheyawardedtheexclusivecontracttothehighestbidder.ThiscalculatedandseeminglyfairmaneuvershouldstrengthentheNFL'scase.Inshort,there'snoreasontobelievethattheSupremeCourt'srulingonMondaysignalsanultimatewinforAmericanNeedle.TheNFLhasacompellingargumenttojustifytheiractions,nottomentionthattheCourtofAppealshasalreadyfoundintheNFL'sfavoronce.I'dbesurprisedtofindAmericanNeedleprevailintheend,butwe'llalljusthavetostaytuned!Kristiisanattorney,founderofIt'saSwingandaMiss(www.itsaswingandamiss.com),andauthoroftheforthcomingbook,"BalancingBaseball:HowCollectiveBargainingHasChangedtheMajorLeagues."
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LebronJameswouldbring$58MtoNewYorkCityifhejoinedKnicksandwonGame7andtitle:studyJune1,2010By:AdamLisbergandJoseMartinezLeBronJameswouldbea$58millioncashkingforNewYork.That'sthemassiveeconomicimpactthecityispredicting"KingJames"wouldpullinifheledtheNewYorkKnickstoanNBAtitleinadecidingGame7.TheNBA'sreigningtwo‐timeMVP,whoismust‐seeTVforhoopsdie‐hardsandthedarlingofbig‐timeadvertisers,hitstheopenmarketasafreeagentJuly1.TheKnicksandtheirfans‐fromfilmmakerSpikeLeetoMayorBloomberg‐aredesperatetolandthegame'smarqueeplayerevenashehintedthattheClevelandCavaliershavetheedgeinsigninghim.Thecity'sEconomicDevelopmentCorp.recentlyconductedasecretstudytodeterminejusthowmuchcashNewYorkwouldpullinonJames'cachet‐andpeggeditataneye‐popping$57.8million.Thestudywasbasedontwokeyfactors:‐TheJames‐ledKnickswouldmakeitthroughtheplayoffstowinhome‐courtadvantageintheNBAfinals.‐TheKnickswouldwintheirfirsttitlesince1973inGame7ofthebest‐of‐sevenchampionship,meaningfourgamesareplayedatMadisonSquareGarden.Twosourceswhohaveseenthetop‐secretstudysaidJameswouldhelppumpnearly$58millionintothecityasout‐of‐townersbookhotelroomsandfanschowdownincityrestaurants.Thosehotelsandrestaurantswouldspendcashstockinguponsuppliesandstaff‐andKnicksfanswouldgraballkindsofteamgear.Eachtransactionwouldsplashcash‐andtaxrevenue‐aroundthecity.ButNewYork'sdream‐onthecourtandthecoffers‐maybeanairball.OnTuesdaynight,KingJamestoldCNN'sLarryKingthatCleveland,ofallplaces,ishiskindofkingdom‐andhastheedgeinkeepinghisservices."Absolutely,"JamessaidintheinterviewsettoairFriday."Because,youknow,thiscity[Cleveland],thesefans,Imean,havegivenmealotinthesesevenyears."And,youknow,forme,it'scomfortable.SoI'vegotalotofmemorieshere.And‐andsoitdoeshaveanedge."
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Thesitdownwiththesuspenders‐lovingserialdivorcéisthefirsttimeJameshasspokenatlengthabouthisfuturesincetheCavs'playoffouster.Akron'sfavoritesonissettobecomethemostsought‐afterfreeagentinNBAhistory‐andClevelandappearswillingtomatchanyoffers.NewYorkerscanhopethelureofswappingsomewayOff‐Broadwayoutpostfortherealthingistoomuchforthe25‐year‐oldsuperstartopasson.HehasalreadytakenashinetotheBigApple,doffingaYankeescapanddesigningasetofNikesinthefabledpinstripes.NewYorkwillbewaitingwithopenarms."WeneedLeBron,"LeetoldtheDailyNewslastmonth.
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LeBrontheFinancialKingofNewYork?SportseconomistscontestLeBronJames’financialimpactonNewYorkCity.June6,2010By:KyleStackTheNewYorkKnicksareexpectedtopulloutallthestopsintheirfreeagentcourtshipofLeBronJamesandthereapparentlyisamajorfinancialincentivetodoso.NewYorkCity’sEconomicDevelopmentCorporationcompiledaLeBronJamesfinancialimpactreportwhosecontentswerefirstleakedoutbytheNewYorkDailyNewsJune1.ThereportstatesthatKingJameswouldhavea$57.8millionimpactonNewYorkCityifheledtheKnickstoaGame7winintheNBAFinalsontheKnicks’homeflooratMadisonSquareGarden.(ThestudyassumestheKnickswouldhavehome‐courtadvantageintheFinals.)Notsofast,indicatedDarrenRovell,asportsbusinessreporteratCNBC.“IdoubttheKnickswouldmake$58million,”Rovellsaid.“Normallyaplayoffgameisworth$1milliontotheteam.”AssumingthatittakesatleasttwohomewinsineachofthefourseriesinordertowinaNBAchampionship,thebenefitwouldberoughlyatleast$8million.Themaximumamountwouldberoughly$16millionsince16homegamesarethemostateamwithhome‐courtadvantagethroughtheplayoffscanplay.Thenthereisthequestionofwhereextracustomerswillcomefromduringtheregularseasonandplayoffs,accordingtoRovell.“Thelargepercentageofpeople[whogotogames]wouldbelivinginNewYork,”Rovellsaid.“IfLeBroncomeshere,theKnicksaregoingtohave14,000,15,000seasonticketholders.Wherewouldalltheseotherpeoplebecomingfrom?”AllenSanderson,aUniversityofChicagoeconomist,saidthatbasketballaudiencesarelocalbynature.Whereasbaseballseasonbenefitsfromaslewofeventsuniquetosummer—goodweather,kidsoutofschool,peopleonvacation—basketballisplayedprimarilyduringwintermonthsinwhichpeopletendtotravelmuchless.
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Whileateamandticketbrokersmightbenefitfromtheabilitytoraiseticketprices,thereisn’tasmuchmoneytobemadebyteamscourtingLeBron.Oddlyenough,fouroftheteamswhohavebeenspeculatedaspossibledestinationsforhimrankedinthetopfivethispastseasoninaveragehomeattendance.TheBulls(1st,20,725avg.),Cavaliers(2nd,20,562),Mavericks(4th,19,994)andKnicks(5th,19,501)can’tdrawmanymorefansifoneofthemsignsLeBron.(TheMaverickscandanglethecarrotofplayingonceortwiceayearin100,000‐plusseatCowboysStadium.)TheNets,anotherLeBroncontender,drewanNBA‐low13,103peopletotheirgameslastseasonatIZODCenterinEastRutherford,whichhadacapacityof18,974.ThebasketballcapacityattheNewark‐locatedPrudentialCenter,wheretheNetswillplayforthenexttwoseasonsbeforemovingtoBrooklyn,islistedat18,500onthearena’swebsite.WhenreachedforconfirmationonwhetherthatfigurewouldbetheNetshomegamecapacitynextseason,theteamstatedthatnocapacityhasbeendetermined.Sowhereisasuperstar’simpact?It’sintheirabilitytoraisetheirteam’spopularityawayfromitshomecity.“TheprimarybeneficiaryofMichaelJordanandtheBullschampionshipteams[inthe'90s]wasthattheysoldoutarenasontheroad,”Sandersonsaid.“Arenasthatwereselling10,000ticketspernightwereselling20,000whentheBullscircuscametotown.IfLeBrongoestotheKnicks,itjustmeanstheKnicksaregoingtoselloutarenasontheroad.”ThebigquestionforthelastyearregardingLeBron’spendingfreeagencyhasturnedfromwherehecanbestmaximizehismarketingabilitytowhichteamwouldprovidehimthegreatestopportunitytowinanNBAchampionship.Yettheformerquestion—ofwhereLeBroncouldmaximizehismarketingvalueandpushtowardhisself‐proclaimedwishtobecomeafinancialpowerhouseamongthelikesoffriendandNetsminorityownerJay‐Z—isstillrelevant.Andthat’swhereRovellandSandersondisagree.WhenaskedaboutwhatadditionalmarketingopportunitiesNewYorkprovidesforLeBron,Rovellstatedthereis“nothingmoreinNewYorkCitythanhehasinChicagoorL.A.”RovellemphasizedLeBron’sneedtowinachampionshipandthatheshouldgotoaplacewherehecandothat.SandersoncitedLeBronasneedingNewYorkCitymorethanthecityneedingLeBron.“IfI’ma25‐year‐oldkidandhaveatonofmoney,I’dratherbeinNewYorkthanCleveland,”Sandersonsaid.“It’sawholelotmorefun.There’sthepotentialofmoreendorsementincomeinabigcity.He’sgoingtodoreallywellwhereverbutIthinkhemaxesitoutinthebiggestmarket.”OneotherfactortoconsideraboutLeBron’spotentialimpactonNewYorkCity(oranycity)iswhatteamsandstarsalreadyexistthere.InNewYork,sportsfanswouldhavetheoccasionaldilemmaofgoingtoeitheraKnicksgameoroneplayedbytheJets,Giants,YankeesandMets—allpopularteamsintheNewYorkmetropolitanarea.DerekJeter,MarkSanchezandEliManningwouldensurethatLeBronwouldn’thavetheNewYorkathleticstagealltohimself.Chicagocouldbeadifferentmatter.SandersongaveanexampleoftheprosportssceneintheWindyCity.
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“MostpeopleinChicagodon’tgivearipabouthockey,”SandersonsaidinreferencetotheChicagoBlackhawks’soaringpopularityasaresultoftheircurrentspotintheStanleyCupFinals.“ThecityisBlackhawk‐crazyatthemoment.Isitbecausethey’vejustturnedintohockeyfans?It’saminorpart.What’sthealternative?TheCubsand[White]Soxsuck.TheBearsarecomingoffahorribleseason.IfitturnsoutLeBroncomestoChicago,hecanhaveafairlybigimpactbecauseofthewoefulstateofmostprofessionalsportsteamsinthecity.”Intheend,bothsportseconomistsconcludedthattheNewYorkCityEconomicDevelopmentCorp.studyisn’trealistic.(TheNYCEDCdidn’trespondtoaninterviewrequestforthisstory.)“[Thestudy]doesn’tmakeanysense,”Rovellsaid.“It’sunlikeaSuperBowl,wherepeoplearecomingfromoutoftownonbothsides.”“Theseeconomicimpactstudiesareoffby90percenttobeginwith,”Sandersonsaid.“Youhavetodiscountthem;they’repuffpieces.”AtatimewhenthereareasmanyNBAfreeagencyquestionsastherearepeoplewhohaveanopinion,thisislikelytheclosestagreementyou’llseeonatopicconcerningLeBronJames’impendingfreeagency.
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Howabadeconomycouldchangeindustryforthebetter June8,2009By:ChuckWieglusForthepast20yearssportsleadershavebeenfunctioninginamarketplacewheremoreismostalwaysseenasbetter.Moregames,morebigevents,morespectators,moretelevision,morecorporatepartners,more,more,more…andmostofoursportshavethrivedquitenicely.Pastconventionalwisdomheldthattheentertainmentoptionsofferedbysportsmadetheseactivitiesrecession‐proof.Thismaynolongerbetrue.Inasportsworldgonemadwithoversaturation,allsportsleadershavetore‐evaluatethepositionoftheirpropertiesagainsttoday’sevolvingeconomicdynamics.WereadabouttheArenaFootballLeaguecancelingits2009season;golftournamentsandotherpropertieslosingcorporatesponsors;professionalteamsdiscountingticketprices.Sowhilenosanepersonwouldhopeforaglobaleconomicrecession,itjustmaybethatthecurrentfinancialcrisisisablessingforthesportsindustry.Herearefivereasonswhy:1.Peoplewillmakebettervaluebaseddecisions.Aspeopleconsiderthemicroeconomicsoftheirowncircumstancestheywilltakeaharderlookatthevaluereturnedforthemoneytheyinvestinsportsandrecreationalactivities.Whenparentsshelloutseveralhundreddollarseverymonthfortennislessons,icetime,teamtravelandtheliketheywillaskmorequestionsbeforewritingthecheck,andprogramadministratorsandcoachesbetterbereadywithgoodanswers.Privatecoachingandequipmentexpenseswillbemorecloselyscrutinized.Parentsaregoingtobelesslikelytoallowtheirkidstoshoparoundandmoreinclinedtopushforqualityexperiences.Asspectators,mostindividualswillbecomemoreprudentintheirchoices;andproteamswillneedtofindmorecreativewaystodrawindividualsandfamiliestotheirvenuestofillthegapsthatmaybeleftbycorporatecutbacksonentertainmentandhospitality.Thesecircumstanceswillresultinmorethoughtfuldecision‐making,andleadtobetterprogramsandservicesforparticipantsandspectators.2.Professionalathleteswillbevieweddifferently.Richathleteswillneedtobecomemoresensitiveandconnectedtotheregularfolks.Ostentatiousbehaviorwillbedeploredmorethaneverandextravagancewillberesented.Athleteswhocarrythemselveswithdignityandwhoshowasincerecaringforotherpeople
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willfindnewopportunitiestoadvancetheirpersonalbrandthroughcause‐marketingandcommunityservice.Sportsistestingneweconomicwatersthatwillchangefans,sponsors,athletesandproperties.Agentsmustfindwaystobettersensitizetheathletestheyrepresent,andcommunityrelationsstaffmembersshouldbelookingforexpandedinvolvementopportunitiesforathletes.Companiesaregoingtobeincreasinglycarefulabouttheathletestheysignasspokespersons.Federationsandteamsmayfindthattheirathletesaremorewillingthaninthepasttobecomeinvolvedinpromotionalandcommunityactivities,andthisisaverygoodthingforoursportsandsociety.3.Sponsorcommitmentswillbecomemoresincereandlessopportunistic.Marketingandsponsorshipdollarsbecomeamongthefirstitemsputunderconsiderationforreductionoreliminationwhentougheconomictimeshit.Withmanycompaniesreducingthesizeoftheirworkforce,itispoliticallydifficulttojustifyanewsportssponsorshiptointernalconstituents.Thisisatimewhenrightsholderscanfindoutjusthowmuchasponsorvaluestherelationship,andthereisthetimeforrightsholderstoreallyoverdelivertosponsorsthatremainengagedandloyal.Neverhavelong‐termplanningandattentiontodetailbeenmoreimportant,andROImeasurementsarepremium.Currentconditionspresentasuperbopportunityforthoughtfuldiscussionsbetweencorporatemarketersandtheentitiestheysponsor.Weshouldseizeuponthisopportunitytoevaluateandrealignstrategiesandbuildstronger,“we’re‐in‐this‐together”personalrelationships.4.Propertyrightsholderswilldeliverabetterproduct.Consistentwiththenotionofoverdelivering,thisisagreattimeforadministrators,marketers,programmersandcustomerserviceproviderstolookateveryaspectoftheexperiencesweprovidetoourmembers,fans,sponsorsandmediapartnersanddeterminehowwecandoabetterjob.Everycommunication,everytouch,everyreasonableevaluationandfollow‐upshouldbecarefullyvettedandthoughtgiventohowtheexperiencecanbeimproved.Forexample,foracomingeventUSASwimmingwillbebusingpeoplefromremoteparkinglotstothefrontdoorsofthevenue.EachbuswillbehostedbyaretiredOlympianwhowillbeoutfittedwithamicrophonesothattheycanintroducethemselves,welcomepeopletotheevent,andprovidesomepersonalinsightsintothecompetition.Wewantpeopletobepleasantlysurprisedbythisextratouchandtoenterthevenuewithgreateranticipation.5.Industryprofessionalismwillrise.Becauseweallneedtoworkharderandsmarter,andbemorecreative,allstaffmemberswillbechallengedtoraisetheirowngame.Ibelievethatintheprocesswe’lluncovernewideasandstrategies,andwe’llseenewyoungstarsemerge.I’mlookingforwardtoseeingwhoonourstaffwillembracethechallengeandstepforwardwithenergyandenthusiasm,andconverselywe’llsadlyfindoutwhowillsitback,hideandplaydefensively.OnethingIalwaystellnewstaffmembersisthatifyoucanhelpusfindnewwaystogeneraterevenueand/orsolveproblems,there’llalwaysbeaplaceforyou.Theyear‐endreviewprocessthis
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yearoughttobeagreatopportunityforsupervisorstomoreclearlydistinguishbetweentheA,BandCplayersonourstaffteams.Thisisnotimeforthesqueamishtobeinleadershiproles,andthosewhochoosetoembracethechallengesweallnowfacemayverywellfindthemselvesinapositiontonotonlyprotecttheirbrandandtheirsport,butmayevendiscovernewwaystogrowandexpandtheirbusiness.TedTurnermaynotbeeveryone’smodelforleadership,buthismantraof“lead,followorgetoutoftheway”neverseemedmoreaptthaninthesesomewhattroublingtimesnowfacingourindustry.ChuckWielgusisexecutivedirectorofUSASwimming.
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GoAmbushMarketing.StayLegal.March15,2010RuthOberleitner
Theterm"AmbushMarketing"wasinventedbytheadvertisingbusinessintheUSinthe1980s.Itstandsforaspecialkindofmarketingcampaignwherecompaniescleverlyconnecttheirgoodsorbrandswithapopular,oftenathletic,event.
Ambushersoftentrytocatchafreeridebypayingnosponsorshipfeesbutmakingconsumersbelievetheyareofficialsponsors.Fromalegalpointofview,thetypesofAmbushMarketingvaryfromcreativestrategiesnotbreakinganylawstotheillegaluseoflogos,phrases,slogansandthelike.
Enhancebrandequity
Thetargetofambushersistoenhancetheirownbrandequitybylinkingtheirbrandtothepositiveequityofeventswithspecialstrategiesatlowcost.AttheOlympicGamesinBeijing2008,KFCusedtheassociativemarketingslogan"IloveBeijing".AndPepsireplaceditsusualbluecanswithredones"toshowtheirrespectfortheyearofChina"1.However,theofficialsponsorswereMcDonald's,notKFC,andCocaCola(withitsredcans),notPepsi.
InNewZealand,TelecomNewZealandLtdsucceededduringthe1996AtlantaOlympicGameswithanambushadvertisementcontainingtheword"ring"(forthesoundofaringingphone)arrangedfivetimesliketheOlympicringsandintheOlympiccolorswhilereferringtotheirnewmobilephone.
Othermajorsportingevents,suchastheFIFAWorldCup,andpubliccharacters,suchascelebratedathletes,aretargetedbyAmbushMarketingcampaigns.AMcDonald'scampaigntookaridenotonlyonthepassionsoftheFIFAWorldCup2006butalsoonthepositiveequityoftheAustrianFederalChancellor.WallpaperpostedalloverViennashowedtheFederalChancellorWolfgangSchusselholdingupared‐white‐red(thecolorsoftheAustrianfederalflag)scarfsaying"AUSTRIAISWORLDCHAMPION".
Allsuchactivitiesareconsidered"AmbushMarketing"intheadvertisementbusiness.Butfromalegalpointofview,weneedtotakeacloserlookanddifferentiate.
Directandindirectambushmarketing
Directambushmarketingactivities,suchastheunauthorized,illegaluseofaregisteredlogoonmerchandisinggoods,orafalseormisleadingclaimtobeanofficialsponsorofanevent,clearlyconstituteinfringements.
Indirectambushmarketing,ontheotherhand,ismoresubtleandfallswithinalegalgreyarea.MercedesbecamefamouswithitsindirectambushmarketingcampaignattheNewYorkCityMarathon1997.AlthoughToyotawastheofficialautomotivepartnerofthemarathon,Mercedeshaditsnamewrittenintheskyabovetheeventbyairplanes.Otherexamplesarethe"IloveBeijing"advertisementsforgrilledchickenduringtheSummerOlympicGames2008inChinaorthe"Wewillgetthetitle"campaignofMediaMarketinGermanyattheFIFAWorldCup2006.
Smartindirectambushersseektosucceedinlinkingthesponsoredactivitytotheirbrandwithoutanyintentiontoviolatetrademarkorcopyrightrightsbyusingprotectedlogosorwordsfortheiradvertisingcampaigns.However,thequestionwhetherthecampaignleads
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tounlawfulandincorrectconsumersassociationsorconstitutesanyotherinfringementsneedsalsotobecheckedwithrespecttounfaircompetitionlaw.
Trademarkprotection
"Ambushingclearlybreachesintellectualpropertylawswhentrademarksareusedwithoutacontractualrightorlicenseandtrademarkrightsareinfringed."AccordingtotheAustrianTrademarkProtectionAct(Markenschutzgesetz;MSchG)notonlytheuseofanidenticalsignbutalsotheuseofasimilarsignwithalikelihoodofconfusionmaybeillegal.Theprotectionoftrademarkswithreputationisevenstronger.Theownerofatrademarkwithreputationmayrequestthirdpartiestorefrainalsofromusinganidenticalorsimilarsignforgoodsorserviceswhicharenotsimilartothoseprotectedunderthetrademark.
Unfaircompetition
Complementarytotrademarklaw,designatedregulationsoftheAustrianActagainstUnfairCompetition(GesetzgegenUnlauterenWettbewerb;UWG)supplementintellectualpropertylaw.Unfairbusinessactivitiesincludemisleadingbusinesspractices(Sec2UWG)2,imitationmarketingofcorporatebrands(Sec9UWG)andotherunfairbusinesspracticesfallingwithinthegeneralclauseofSec1UWG.Furthermore,anunfairexploitationofthegoodreputationofaneventorfalseallegationsinadvertisements,misleadingthepublicaboutthestatusoftheambusherasanofficialsponsor,maybeconsideredasunfaircompetition3.
Copyrightsandpersonalrights
Intellectualcreationsintheareaofliterature,photography,musicandartenjoy(withoutregistration)copyrightprotectionundertheAustrianCopyrightAct(Urheberrechtsgesetz;UrhG).Personalrightssuchastherighttoone'sownimagemayalsobeviolatedbyanadvertisingcampaign(seeChancellorSchusselexampleabove).
Remedies
Totheholderofintellectualpropertyrights,Austrianlawprovidesforremediessuchasanactionforpreliminaryorpermanentinjunction,compensation,ordersfordisposalanddestructionorpublicationofthejudgment.Theholderofrightsmayalsoinitiatecriminalproceedingsagainsttheinfringerinvariousintentionalcases.
Ambushmarketingactionsareusuallyshort‐livedcampaignswhichflashintoaction.Acourtdecisionorderinganinjunctionwillthereforeoftencometoolate.Evenpreliminaryinjunctionsdonotprovideformuchprotectionintheambushcompetition.Ambushmarketingcasesarethereforerarelyactionableandtheclaimantwillusuallybereferredtodamages‐onlysuchdamagesarehardtoprove.
Footnotes
1Soderman/Dolles,Strategicfitininternationalsponsorship‐thecaseoftheOlympicGamesinBeijing2008,InternationalJournalofSportsMarketing&Sponsorship(SJSMS),January2008,98.
2Anderl/ApplinWiebe/G.Kodek,UWG(2009)s.2Rz325;Duursma/Duursma‐KepplingerinGumpoldsberger/Baumann,UWGErganzungsbands.2Rz38.
3AustrianSupremeCourt(ObersterGerichtshof‐OGH)17.9.1996,4Ob2206/96g‐FootballAssociation‐OBl1997,83.SeealsoHorak,"AmbushMarketing"unddieEURO2008‐AngriffaufdasWerbemonopol!,ecolex2007,416.
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Thecontentofthisarticleisintendedtoprovideageneralguidetothesubjectmatter.Specialistadviceshouldbesoughtaboutyourspecificcircumstances.(c)MondaqLtd,2010‐Tel.+44(0)2085448300‐http://www.mondaq.com
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ComcastreachesdealtokeepsportseventsonfreeTVJune20,2010By:BobFernandezWithaMondaydeadlineloomingattheFederalCommunicationsCommission,ComcastCorp.hasreachedanagreementwithindependentNBCTVstationstokeeptheKentuckyDerby,SundayNightFootball,theStanleyCupFinals,andothermarqueesportingeventsonfreeover‐the‐airTV,officialswithNBCstationsandComcastsay.ThedealsidelinessomepotentialpoliticaloppositiontoComcast's$30billiondealforcontrolofNBCUniversalInc.andsettlesabigissuefor210independentNBCaffiliates.TheNBCstationsfearedthecablegiantwouldmoveblockbustersportstoComcast'spay‐to‐watchsportschannelVersustochallengeESPN.AwholesalemigrationofNBCsportscontenttocableTVwouldbeablowtotheover‐the‐airNBCbrand.NBCSportsisoneofthecrownjewelsinNBCUniversal,mostlybecauseofitsOlympicscoverage.OtherNBCSportspropertiesincludeWimbledon,thePGAtour,theRyderCup,theU.S.Opentennischampionship,andthePreakness.MichaelFiorile,previouschairmanoftheNBCAffiliateBoard,saidThursdaythattheNBCSportspackage"willnotchangesubstantially"onover‐the‐airstationsafteramerger,althoughComcastcouldbroadcastsomepartsofcompetitionsorindividualeventson"oneoftheirpaychannels."Theagreementkeepssportsonover‐the‐airNBCTVforthe"foreseeablefuture,"saidFiorile,thechiefexecutiveofficeroftheDispatchBroadcastGroup."That'snottosay,"hesaid,"thatin20years,ifallsportshasmigrated,thattheywon'tdothesamething."Eventhoughpublic‐interestgroupssayComcastshouldsellthe10NBCover‐the‐airTVstationsthatitwouldownafteramerger,whichwouldincludeNBC10inPhiladelphia,theindependentNBCstationswouldlikeComcasttoretainownershipofthem,Fiorilesaid."Wewantthemintheover‐the‐airbusinesssotheyhaveskininthegame,"hesaid.ThesportsagreementbetweentheNBCstationsandComcastcomesasthepublic‐commentperiodattheFCCoverthemergerendsMonday.
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TheFCCdeniedarequestfromfinancial‐researchandmediagiantBloombergL.P.toextendthecommentperiodtoearlyAugust,andmanyindustryobserversexpectaflurryoffilings.Opponents,whichincludeotherpay‐TVoperators,theCommunicationWorkersofAmerica,andpublic‐interestgroups,sayComcastwouldgainexcessivemarketpowerthroughitscontrolofthenation'slargestcableTVnetworkandoneofthenation'slargestentertainmentcompanies,NBCUniversal.AletterexpectedtobefiledMondaywiththeFCCandsignedbyBloomberg,theCWA,andotherssaysthatComcast‐NBCU"will,toanunprecedenteddegree,havethemeansandincentivestodriveupthecostsofcableandsatelliteTVserviceforconsumers,andunderminecompetitionbetweenvideodistributors."AcopywasmadeavailabletoTheInquireronFriday.Comcasthassaidthemergeritselfshouldhavenoeffectoncableprices.DavidL.Cohen,executivevicepresidentofComcast,saidThursdaythatthecablecompanywascomfortablewiththepaceofthereviewinWashingtonandpleasedwiththeshowofsupportfortheComcast‐NBCUdeal,whichwasannouncedinDecember.MayorNutterwasamongthelatestPennsylvaniaofficialstocomeoutinfavor,sayinginaWednesdaylettertotheFCC:"HereinPhiladelphia,wesupportourown."NuttersaidintheletterthatComcast"sharesourunrelentingdrivetoensurePhiladelphiaisontopofitseconomicgameforthefuture."InMay,mostofthePennsylvaniadelegationinWashingtonsignedalettersponsoredbyRep.BobBrady(D.,Phila.)thatwaswritteninpartbyaComcastlobbyistinWashington.WhilePennsylvanialawmakersstresstheeconomic‐developmentbenefitsofthedeal,criticsviewtheeconomicpowerofthemergedentityasathreattocompetition.ComcastsaidFridaythatmorethan400lettersofsupportforthemergerhavebeenfiledwiththeFCC.TheAmericanCableAssociation,agroupofabout900cablecompanies,mostwithfewerthan5,000subscribers,saysComcast‐NBCUcouldbundleComcast‐controlledlocalsportswithNBC'sentertainmentandnewsintoa"must‐have"programmingpackageandchargepremiumprices.Pay‐TVoperatorswouldhavetobuyanddistributetheprogramming,leadingtohighercostsforsubscribers.ThemarketswhereComcast‐NBCUwouldhavethemosteconomicpowerarethosewithComcastregionalsportsnetworksandNBCTVaffiliatesownedbyNBCUniversal,theysay.Philadelphiaisoneofthosemarkets."Thethreatisthatallcableoperators‐notjustsmallcableoperators‐willpayhigherpricesforalltheprogrammingthateitherofthesetwoentitiessellseparately,"saidWilliamRogerson,aneconomicsprofessoratNorthwesternUniversityandformerFCCchiefeconomist.
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RogersonsaidhewouldhavethesameconcernsifNBCUniversalhadsaiditwouldbuyComcast'sregionalsportsnetworksbecauseofthedepthofprogrammingthedealwouldgivethemergedcompanyinlocalmarkets.TellingComcasttosellitsregionalsportsnetworksinthosemajormetropolitanmarketsasaconditionofthemergerwouldbeunrealistic,Rogersonsaid.ButtheFCCcouldenactanarbitrationproceduretoleveltheplayingfieldbetweenComcast‐NBCUandcompetitorswhentheycannotagreeondistributionprices,Rogersonsaid.Cohen,thecableexecutive,calledtheideathatComcastwouldgainexcessiveeconomicpowerintheprogrammingbusiness"anacademicallyandfactuallyflawedargument."Hesaidthatafteramerger,Comcastwouldcontrolonly9percentto12percentofthenation'sprogrammingmarket.ThisarticlewasreprintedwiththepermissionofBobFernandezandthePhiladelphiaInquirer
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WORKSCITEDKristiDosh,WhyNFL’sSupremeCourtLossIsn’tMuchofaLoss,Forbes,May24,2010,http://blogs.forbes.com/sportsmoney/2010/05/why‐nfls‐supreme‐court‐loss‐isnt‐much‐of‐aloss.KristiDosh,AmericanNeedlev.NFL:LookingForward,Forbes,May26,2010,http://blogs.forbes.com/sportsmoney/2010/05/american‐needle‐vs‐nfl‐looking‐forward/.BobFernandez,ComcastreachesdealtokeepsportseventsonfreeTV,PhiladelphiaInquirer,June20,2010,http://www.philly.com/philly/business/technology/20100620_Comcast_reaches_deal_to_keep_sports_events_on_free_TV.html#axzz0rRmLGwqU.AdamLisbergandJoseMartinez,LebronJameswouldbring$58MtoNewYorkCityifhejoinedKnicksandwonGame7andtitle:study,NewYorkDailyNews,June1,2010,http://www.nydailynews.com/ny_local/2010/06/02/2010‐06‐02_untitled__lebron02m.html.RuthOberleitner,GoAmbushMarketing.StayLegal.,MondaqBusinessBriefingMarch15,2010,http://www.mondaq.com/article.asp?articleid=95860.KyleStack,LebrontheFinancialKingofNewYork?,SlamOnline,June6,2010,http://www.slamonline.com/online/nba/2010/06/lebron‐the‐financial‐king‐of‐new‐york/.ChuckWieglus,HowaBadEconomyCouldChangeIndustryfortheBetter,SportsBusinessJournal,June8,2009,http://sportsbusinessjournal.com/article/62757.
