Rule 40 Changes Create New Olympic Opportunities, Challenges

Advertising Law

Advertisers may be able to take advantage of new marketing opportunities during the Olympic Games in 2020 thanks to the U.S. Olympic & Paralympic Committee (USOPC) revising their guidance around Rule 40 of the Olympic Charter.

Rule 40 governs how Olympic participants—athletes, coaches, trainers and officials—are permitted to commercialize their name and likeness during the Rule 40 period (the delineated weeks before, during and after the Olympic games). For the Tokyo Olympics in 2020, that period begins July 14 and runs through August 11.

Historically, Rule 40 restricted athletes in the Olympic Games from using their name or likeness during the Rule 40 period. For years, athletes criticized this limitation on their ability to leverage their athletic success for endorsement deals with brands that were not official sponsors of the Olympics.

But this summer, bylaw 3 to Rule 40 in the Olympic Charter was amended to read: “Competitors, team officials and other team personnel who participate in the Olympic Games may allow their person, name, picture or sports performances to be used for advertising purposes during the Olympic Games in accordance with the principles determined by the [International Olympic Committee] Executive Board.”

Further to this change, the USOPC released guidance on October 8th that confirmed significant changes to the organization’s implementation of Rule 40. These changes apply to U.S. Olympic athletes. The guidance established a two-step process that athletes and personal sponsors must complete in order for athletes to engage in marketing during the Rule 40 period. First, an athlete must visit a dedicated portal to register their personal sponsor(s), providing the name and contact information of the organization(s). Permission can be requested at any time starting January 1, 2020, through the end of the Rule 40 period.

Each personal sponsor identified by an athlete will receive a link to a click-through “Personal Sponsor Commitment”. According to the USOPC, Rule 40 permission will be issued upon the personal sponsor “successfully completing the Personal Sponsor Commitment”—in other words, the personal sponsor must click through and agree to all the terms of the Personal Sponsor Commitment in order to use an Olympic athlete in advertising during the Rule 40 period. The text of the Personal Sponsor Commitment remains outstanding as of the date of this article, but it is expected to be released in the next few weeks.

Obtaining Rule 40 permission will not mean that advertisers can market their athletes at will, however. The promotion should “be reflective of a continuous campaign and pre-existing relationship between a brand and an athlete,” according to the guidance, “and not increased in frequency or substantially changed during the Rule 40 period as compared to the same period in a non-Games year.” 

There are two forms of marketing that the USOPC indicated would be considered compliant with the revised Rule 40 guidance: generic marketing of a product, service or brand that includes one or more athletes, and second, athlete-focused marketing that reflects a personal sponsor’s support of an athlete’s participation in the Games.

According to the guidance, a generic social media ad might feature an image of a sponsored athlete kicking a soccer ball, along with a picture of the product and the sponsor’s logo with a tagline such as, “Made for Champions,” or an image of a snowboarder wearing clothes bearing the sponsor’s logo and the caption, “Go, [athlete name]!”

Rule 40 permission does not give sponsors any rights to use Olympic intellectual property or images (such as the interlocking rings) or to reference—directly or indirectly, visually or verbally—Team USA, the USOPC, the Olympic Movement or the Games.

Athlete-focused marketing may not mention or promote the personal sponsor’s products or services and may make just a single reference to the brand sending the message. This type of permitted advertising may take one of two forms, the USOPC said: athletes thanking personal sponsors, and personal sponsors recognizing athletes for their performance.

During the Rule 40 period, an athlete may post a total of seven thank-you messages that include reference to personal sponsors. This doesn’t impact the number of times athletes may thank sponsors that are official Olympic sponsors. In order to avoid confusion, however, athletes may not thank both personal and official sponsors in the same message.

Examples of permitted thank-yous provided in the revised Rule 40 guidance include “Thank you @company for supporting my journey” and “Thank you @company. #gold.” Posts that would not be allowed include: “Thank you @company. #Tokyo2020” and “Thank you @company. Your [product] helped me win today.”

Personal sponsors may retweet or repost a single athlete thank-you on the original social media channel, without further text or edits, during the Rule 40 period. In addition, personal sponsors may create and post one message congratulating or recognizing a sponsored athlete on the athlete’s performance or providing encouragement to the athlete they sponsor.

According to the USOPC, “Congratulations @athlete on your personal best. #silver” and “You got this @athlete. #100-meter” are permitted, but “Congratulations @athlete on your Olympic gold medal” and “Today’s your day to shine @athlete. Let’s celebrate with 30% off [product/service]” would not be permitted.

Rule 40 permission further prohibits personal sponsors from acting as a Games news source, “including but not limited to real-time posting of results, event live streaming and use of still images to simulate live coverage,” the guidance stated.

Although it’s not yet clear exactly which consequences personal sponsors might face if they do not fully comply with the Personal Sponsor Commitment and the latest USOPC guidelines, it is likely that those consequences will include cancellation of Rule 40 permission, inability to obtain Rule 40 permission for one or more future Games, and also damages and injunctive relief to the extent either are sought by the USOPC or an athlete.

To read the USOPC guidance, click here.

Why it matters: The changes to Rule 40 potentially open the door to greater marketing opportunities for advertisers that are not official sponsors of the Olympic Games or Team USA, allowing them flexibility to use Olympic athletes in advertising during the Rule 40 period. However, non-Olympic sponsors will now have a direct contractual relationship with the USOPC via the Personal Sponsor Commitment, based on which the USOPC would be able to seek significant remedies for an advertiser’s violations of the terms and guidelines set forth in the Personal Sponsor Commitment.

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