6 September 2006
Media Statement

Proposed ambush marketing bill explained

Minister for the Rugby World Cup Trevor Mallard said the government hoped to introduce legislation later this year to provide greater protection to sponsors of major sporting events from ambush marketing.

"Ambush marketing has become a significant international concern, with countries such as Australia, the United Kingdom, South Africa and the West Indies all moving to pass legislation to protect the commercial interests of sponsors of events such as the Olympics, FIFA World Cup and Cricket World Cup," Trevor Mallard said.

"The impetus for this proposed legislation arose from New Zealand’s successful bids to host the 2011 Rugby World Cup and 2015 ICC Cricket World Cup, which both included a commitment to ensure that there are adequate provisions in place to protect the event sponsors.

"There are also other benefits for New Zealand being seen internationally as a great place to host big events - as the legislation will make New Zealand more attractive to major event organisers. Without it, New Zealand's success when bidding for similar events in the future, may be at risk.

"It is impossible to host major events these days without enormous financial contributions from large sponsors. These companies will not provide sponsorship dollars if others are allowed to manipulate public perceptions by falsely suggesting a link with these events.

"There is ample international precedent for the move, such as the legislation introduced for the 2012 London Olympic Games and the 2007 ICC Cricket World Cup in the West Indies.

"New Zealand needs to stay in step with international commercial realities if we are to be seen on the world stage as a country which can successful host major events, and enjoy the many economic benefits which flow from these events.”

He stressed that ample safeguards would be in place as part of the process to ensure that legitimate commercial practices were not unreasonably curbed by the proposal.

These measures would include: confining the protection to only large scale, international events; defined time periods for when the protections apply; and permitting ongoing marketing of existing, legitimate business interests during these periods.

"In addition, it is expected the legislation will require major event organisers to demonstrate that they have put in place a range of "self-help" measures, such as promoting the official sponsors to protect their commercial interests. They should also show that they have used all normal legal remedies to solve the problem before any anti-ambush protection comes into play."

As part of the legislative process, officials will carry out targeted consultation with a wide range of relevant parties, including major event organisers and the marketing industry, to ensure that any legislation achieves an appropriate balance between fair marketing practices and the financial interests of major sponsors.

AMBUSH MARKETING – FACT SHEET

What is Ambush Marketing?

The term "ambush marketing" was invented in the early 1990s by a marketing executive at American Express, Jerry Walsh. In its original concept, the term ambush marketing was intended to convey the idea of healthy competition. But since the early 1990s the term has acquired negative connotations and now means something akin to commercial theft. Ambush marketing describes the actions of companies or advertisers who seek to associate themselves (their goods or services) with a sponsored event such as the Olympic or Commonwealth Games or the Rugby World Cup. The ambush marketer cashes in on the goodwill and popularity of the event by creating an association between itself and the event without having to pay any sponsorship fees. It is a form of “free riding”.

Ambush marketing has never been comprehensively defined or delineated. This is because human ingenuity is such that advertisers are increasingly canny in finding ways around official controls on non-sponsored marketing strategies; so the categories of what might be called ambush marketing appear to be expanding.

The International Cricket Council ("ICC"), which runs the Cricket World Cup, has defined two separate types of ambush marketing. These are:

- Ambush marketing by association where the advertiser misleads the public into thinking that the ambusher is an authorised partner or somehow associated with the event (sometimes but in many cases without using the event marks or event name). Although the ICC uses the term "misleads", in fact the association can be more subtle. The fact that members of the public often do not consciously focus on advertising can lead to impressions of sponsorship readily arising, even though the legal tests of misleading or deception may not be met.

- Ambush marketing by intrusion. This occurs when the event is used to provide the ambusher’s brand with exposure or publicity for which it is not entitled. In such instances, there may be no claim of association.

(2) Possible types of ambush marketing

(i) The sale of unauthorised or pirated goods or services

(ii) The sale of goods or provision of services using marks, indicia or dates that (although not official trade marks) are suggestive of a connection with the event

(iii) The placement of billboards displaying the ambush marketer’s name near the venue or venues of the event

(iv) The use of photographs of the sporting venue as background to the marketing campaign in a way that suggests sponsorship of the event

(v) Sponsorship of the city where the event is being held or even a particular location

(vi) Giving away free tickets to the event as prizes in an advertising campaign and then advertising in such a way as to suggest sponsorship

(vii) Arranging aerial advertising over the venue immediately before or during the event so as to suggest sponsorship or association

(viii) Sponsorship of individual participants in the competition and the purchase of media slots and billboard advertising before the event to promote the advertiser’s goods or services

(ix) The giving away of free merchandise such as caps, t-shirts or even small flags bearing the advertiser’s logo with the aim that spectators will wear the caps or t-shirts or wave the flags and be picked up in numbers by television coverage or still photographs.

(x) Advertising using the match schedules/broadcast schedules

(3) Examples of ambush marketing

- At the 2006 World Cup, Lufthansa painted a soccer ball on the nose of many of its planes to the annoyance of FIFA and Emirates Air which paid a substantial sum to FIFA to be an official sponsor.

- At the 2002 Winter Olympics in Salt Lake City, Anheuser-Busch paid more than US$50 million to use the OLYMPIC mark and the five rings logo. A local brewery marked its delivery trucks with the mark “Wasutch Beers The Unofficial beer 2002 Winter Games”. This avoided either use of the word Olympics or the five ring logo.

- At the 1984 Los Angeles Games, even though footwear company Converse was the official sponsor, Nike built huge murals near the LA Coliseum displaying the NIKE logo and athletes wearing NIKE clothes.

- At the Atlanta Olympic Games in 1996, Nike handed out to crowds, paper flags bearing its logo and this was picked up by television coverage.

- At the 2005 Wimbledon, Colgate-Palmolive, sponsors of 2004 champion Maria Sharapova, handed out bottles of water emblazoned with a deodorant brand to fans in the queue. These were confiscated by officials as the official water supplier to the championships was Buxton.

- At the Rugby World Cup in Australia in 2003, Vodafone, which was sponsoring the Australian team not the event, handed out Vodafone flags to stadium crowds prior to the first match. These were confiscated by stadium officials.

- At the 2006 Football Word Cup, Dutch brewer, Bavaria, gave away garish orange lederhosen displaying its name to hundreds of Dutch supporters attending the match against the Ivory Coast. Budweiser was the official beer. Stewards at the match ordered the fans to remove the garments before letting them in.

- Prior to the Sydney 2000 Olympic Games, Qantas sponsored individual athletes such as Susie O’Neill and Ian Thorpe. Those athletes featured on billboards around Sydney with the slogan "Share the Spirit". It also had an extensive advertising campaign featuring Olympic athlete Cathy Freeman crossing the finishing line of a 400m race with her arms outstretched. Qantas advertising was extensive in the lead up to the games such that a poll in 2000 showed that Qantas had a higher recognition as a "sponsor" of the Sydney Olympics (although it was not a sponsor) than Ansett which paid an estimated A$40 million to be an official sponsor.

(4) Countries which have passed ambush marketing laws

(a) Australia

Olympic-Related Legislation

In Australia, two statutes (one Federal and one State) were used to protect the Sydney Olympics.

The Sydney 2000 Games (Indicia and Images) Protection Act 1996

The Olympic Arrangements Act 2000

This was a New South Wales State Act and supplemented the Federal Statute. It contained the following relevant controls on ambush marketing:

- Street trading

_ Controls on sale of tickets

- Control of airspace and aerial advertising

- Prohibition of advertising on buildings or structures

Commonwealth Games Related Legislation

Melbourne Commonwealth (Indicia and Images) Protection Act 2006

In 2005, the Australian Federal Parliament passed this Act to protect the 2006 Commonwealth Games held in Melbourne. The Act put in place a regulatory regime similar to that used for the Sydney Olympics. Again it was supplemented by Victorian State legislation.

The Australian Grands Prix Act 1994 and Regulations 1996

This is a Victorian State statute designed to provide a series of powers and controls for the Australian Formula One Grand Prix in Melbourne.

(b) South Africa

In South Africa there are two relevant statutory provisions, both introduced in 2001 to cater for the 2003 Cricket World Cup.

(c) United Kingdom

The London Olympic Games and Paralympic Games Act 2006 ('LOGA')

The most recently enacted legislation to control ambush marketing is the LOGA which passed into law in the UK on 30 March 2006. The Act is multi-faceted and covers a number of distinct areas of ambush marketing.

(d) Caribbean Nations

ICC Cricket World Cup West Indies 2007 Bill

In April 2006, the Legal Affairs Committee of the Caribbean Regional Organisation CARICOM signed off on draft legislation catering for the Cricket World Cup to be held in nine Caribbean nations in 2007. The ICC announced that each of the nine host venues would use the draft legislation as a model and produce a piece of legislation for its respective Parliament. The ICC announcement indicates that:

"This specialised legislation is designed to secure the legal framework for next year’s event, including provisions for the control of venues (how their operations will be undertaken and who will be in charge); the control of certain aspects of security and the protection of intellectual property. It will also make ambush marketing illegal."

The statutes will each have a sunset clause so that the legislation will expire on 30 June 2007.

ENDS

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