Countdown to London 2012 Olympics

As the London Olympics Bill commences its first reading at committee stage in the House of Commons in October, strategic sponsorship and licensing consultant Ardi Kolah examines its contents and assesses the affect it will have on marketing activities surrounding the 'greatest show on earth'.

Just before the summer recess, the government took the first formal steps to make a reality of the 2012 Olympic Games.

The London Olympics Bill, supported by all political parties, was given an unopposed second reading, and now proceeds to House of Commons Committee Stage in October and then the House of Lords before returning to the Commons in the New Year. 

According to the Department of Culture, Media and Sport, the bill is likely to get the Royal Assent in the New Year and certainly no later than spring 2006.

The bill is introduced in part to comply with the obligations imposed by the Host City Contract that was signed in Singapore on July 6 2005 when International Olympic Committee President, Jacques Rogge, announced that London had won the bid. It's also heavily based on the legislation introduced for and the experiences of the Sydney Olympic Games in 2000.

Billions of pounds of investment are now required to ensure that there's adequate infrastructure and a transport system in place to stage the games in London, a far cry from the position when the games were last staged in the capital in 1948.

Given the size of this undertaking, there's always the chance that slippage in the construction programme will balloon the final cost to Millennium Dome proportions.

However, balanced against this is the opportunity for London and the nation to play host to the world's biggest multi-sport event before a global TV audience of over 4bn. And London 2012 believes it could end the Games with a surplus of more than £100m in the bank.

Meeting the IOC's requirements
The bill deals with more than just brand protection of the IOC's intellectual property rights -- it also provides the Mayor of London certain specific powers and even confers powers regarding standards of street cleaning.

The reason for the bill's accelerated timetable is that the serious work of organising the London 2012 Olympics can't get going without the creation of the Olympic Delivery Authority, which will make sure that London sticks to a demanding timetable for construction and development in the seven years leading up to the games.

A further complication is that the London Olympics Act 2005 (its likely title on becoming law) gives statutory powers to the relevant Secretary of State to introduce a raft of new regulations. These so-called Statutory Instruments will regulate virtually every detail imaginable -- from road cleaning to advertising around venues and the confiscation of counterfeit merchandise by "enforcement officers" -- a kind of Olympics "Big Brother" taskforce.

The devil will be in the detail and marketers will have to wait two years before the games (2010) to know exactly how these regulations will affect their marketing activities, although the scope of the regulations will be limited on a geographical and time basis.

The following parts of the bill will have the most impact on marketing practice in the years leading up to the games:

These wide provisions are to ensure that the organisers tightly control the advertising market in the host city and in and around the games. The bill sets forth extensive powers for regulations to be made affecting advertising around the vicinity of London Olympic events.

For example, Clause 17(3) provides:
The regulations shall specify, or provide criteria for determining -
a. the places in respect of advertising in which the regulations apply
b. the nature of the advertising in respect of which the regulations apply,
c. what is, or is not, to be treated for the purposes of the regulations as advertising in the vicinity of a place.

It's unclear what is meant by "vicinity" in this context but it's likely to include any area accessible or visible to the public which is adjacent or near to a venue.

"It's likely to include the roads leading up to the venues and areas visible from any Olympic precinct or in view of TV cameras covering the games," explains Jeremy Summers, principal of SK Sport & Entertainment, who previously worked as a member of the legal team for the Sydney 2000 Olympic Games.

"In Sydney, there were 'no-fly zones' around the Olympic venues which helped security but also prevented 'ambush marketing' from the air," adds Summers, who expects similar regulations will be enforced for the London 2012 Olympics in light of the terrorists attacks on the capital in July 2005.

Clause 17(5) states:
The regulations may apply in respect of advertising in any form including, in particular -
a. the distribution of documents or articles,
b. the display or projection of words, images, lights or sounds, and
c. things done with or in relation to material which has or may have purposes or uses other than as an advertisement.

This appears to cover a wide area of activity, from editorial comment to merchandise such as headbands, T-shirts, and umbrellas.

Although not all advertising throughout the capital is controlled by the organisers, the ODA or the London Organising Committee of the Olympic Games will be under a duty to protect sponsors from "ambush marketing" in order to assist the LOCOG in its sponsorship negotiations as well as helping to maintain the value of those sponsorship rights.

Clause 17(8)(c) provides:
(The regulations) may impose obligations on persons who own, occupy or have responsibility for the management of land, premises or other property.

It's therefore likely that billboard owners, such as Clear Channel and Maiden, won't be able to sell advertising space in the Olympic period to non-sponsors where these sites are in the vicinity of Olympic venues. 

And because Olympic sponsorship works on the basis of category exclusivity, there's likely to be fierce competition between top brand owners such as Nike, Adidas and Puma to become a sponsor.

Those brand owners left out in the cold may be prepared to pay over the odds for prime advertising space near to Olympic venues but billboard owners may be powerless to take their money.

The more likely scenario is that LOCOG will enter into commercial arrangements with media owners so that Olympic partners  and LOCOG sponsors will be offered prime advertising sites as part of their sponsorship packages.

Under Clause 19, it will be an offence, punishable by a fine not exceeding £20,000, for a person to contravene these provisions. And the enforcement powers are equally wide-ranging.

Clause 20(1) provides:
A constable or enforcement officer may -
a. enter land or premises on which they reasonably believe a contravention of regulations under Section 17 is occurring (whether by reason of advertising on that land or premises or by the use of that land or premises cause an advertisement to appear on other land or premises;
b. remove, destroy, conceal or erase any infringing article;
c. when entering land under paragraph (a), be accompanied by one or more persons for the purpose of taking action under paragraph (b);
d. use, or authorise the use of, reasonable force for the purpose of taking action under this subsection.

According to London 2012, these provisions are essential in order to comply with all the guarantees given to the IOC, which include that all venues will be free of advertising in the sporting arenas (so called 'clean stadia' policy).

Street trading
Controls over street trading already exist in various parts of London, for instance, the London Local Authorities Act 1990, the City of Westminster Act 1999 and the Criminal Justice and Public Order Act 1994 (which deals with football ticket touts).

The bill goes beyond these controls and subject to certain exemptions for some forms of trading, there will be restrictions on street trading near Olympic venues except where this is authorised by the ODA. This includes places like car parks that are used for popular Sunday markets.

Clause 23 could affect thousands of street traders who currently hold licenses but who could find themselves near an Olympic venue.

LOCOG will also take a hard-line against street traders who attempt to sell "unofficial" or counterfeit London 2012 merchandise to the punters attending the Games and in such cases similar enforcement procedures as in Clause 20 applies. 

Such powers already exist for Trading Standards and Customs & Excise officers who monitor entry points into the UK that could be used for trafficking counterfeit merchandise. "And it's likely that there'll be infringement actions taking place in the years leading up to the games", predicts Summers. 

The IOC demands that ticketing is tightly controlled in the host city because it's a key revenue stream as well as one of the main ways that LOCOG will deal with the public. So the host city is required to ensure that legislation is in place to stop ticket touting and the bill makes a breach of these provisions a criminal offence.

Clause 29(1) provides:
A person commits an offence if he sells an Olympic ticket -
a. in a public place or in the course of a business, and
b. otherwise than in accordance with a written authorisation issued by the London Organising Committee.

The bill defines what is meant by an "Olympic ticket" which includes anything that purports to be a ticket for one of more of the events. Offering a ticket for sale includes advertising tickets as well as giving or providing tickets as part of other goods and services.

So package tour operators or corporate hospitality suppliers can't supply packages with Olympic tickets unless expressly authorised to do so.

However, even if a ticket wasn't involved in these activities, these suppliers' marketing activities could be caught by other legal restrictions, such as The Olympic Symbol etc. (Protection) Act 1995 if they attempted to make a connection with the 2012 London Olympics.

Miscellaneous provisions
The Olympic Symbol etc. (Protection) Act 1995

Clause 30 of the bill slightly extends the protection offered to the symbols, mottos and words of the Olympic Movement and appears to give LOCOG and the British Olympic Association (BOA) a kind of "statutory passing off" right against "ambush marketers".

Under the 1995 Act, BOA retains residual rights for certain purposes in relation to the use of the Olympic five-ring symbol, the Olympic motto and the words: Olympic(s), Olympian(s), Olympiad(s) or anything similar which is likely to create an association with any of these in people's minds.

This would affect any marketing campaign where there was an attempt to circumvent the 1995 Act.

For example, an advertising campaign that said, "You don't win silver. You lose gold" (used by Nike in its ambush marketing at the Atlanta Games 1996) would fall foul of the 1995 Act.

The Institute of Direct Marketing continues to challenge the wide interpretation given to the 1995 Act in respect of the powers exercisable by the BOA.

"So long as the reference (to symbols, mottos, etc) fairly represents a connection with the Olympic Games and is presented in an honest way, the use is outside the Olympics association right and the BOA have no control over it," says Philip Circus, legal adviser to the IDM.

According to Summers, this view will be dependent on individual circumstances.

"You've got to look at each circumstance of how it's being used. For example, under the Trade Marks Act 1994 you're allowed to use a registered trade mark in accordance with honest commercial practices, what this means is practice is not always clear.

"If you infringe any other rights or ride on the back of the reputation of the Olympic symbols, motto and words in an unofficial capacity, then there may be a breach of the London Olympics association right as well as passing off and trade mark infringement," advises Summers.

Schedule 3(1) of the bill provides:
There shall be a right, to be known as the London Olympics association right, which shall confer exclusive rights in relation to the use of any visual or verbal representation (of any kind) in a manner likely to create in the public mind an association between the London Olympics and -
a. goods or services, or
b. a person who provides goods or services

In essence, these are the sponsors' rights and as such, they are extremely valuable as they cover all marketing and communication activities, including the right to produce branded merchandise carrying the symbols, mottos and words of London 2012 Olympic Games.

However, there's no infringement of the London Olympics association right by the use of a registered trade mark in relation to goods or services that have already been registered.

Schedule 3(7) also provides further exemptions:
a. the use by a person of his own name and address,
b. the use of indications concerning the kind, quality, quantity, intended purpose, value, geographical origin, time of production of goods or of rendering of services, or other characteristics of goods or services,
c. the use of a representation which is necessary to indicate the intended purpose of a product or service;
provided, in each case, that the use is in accordance with honest practices in industrial or commercial matters.

Marketers will therefore need to bring themselves within these provisions in order to avoid enforcement action.

Police and Criminal Evidence Act 1984
Clause 36 provides that PACE 1984 will be amended to include a new arrestable offence for breaches of the London Olympics Act 2005 in respect of unauthorised advertising, trading and ticket sales.

Time limit for the proposed Act
The bill defines the "London Olympics Period" as being four weeks before the day of the opening ceremony and ends 15 days after the closing ceremony of the Paralympic Games in 2012.

In the four-week period, the Olympic Torch will arrive in London several days before the Opening Ceremony and it's likely that there will be arts festivals and other events being staged in the build up to the Games.

However, marketers that aren't involved as official sponsors or supporters of London 2012 Olympic Games will need to be wary of not promoting an association with the Games which isn't authorised in order to escape the watchful eyes of the enforcement officers who'll be keeping a look-out for any attempts at "ambush marketing".

In conclusion
The countdown to 2012 London Olympics has begun and marketers must now start to evaluate the commercial potential of becoming a LOCOG sponsor in order to avoid being left out in the cold.

And given the scope of the London Olympics Act 2005, it doesn't look likely they can look forward to a successful career as an "ambush marketer".

Ardi Kolah is author of 'Maximising the Value of Sponsorship' and 'Maximising the Value of Licensing and Merchandising'. To order these reports, contact Chris Haill at Sport Business or call +44 207 934 9253.

If you have an opinion on this or any other issue raised on Brand Republic, join the debate in the Forum.