Sports Marketing and The Law: Three Dos & Don’ts Around Sporting Events

For over a century, sponsorship and advertising revenues have been critical elements in sporting events. They not only help to pay for the events themselves, but also for stadiums and team wages — they even play a role in driving ticket prices down for fans. Without advertising and sponsorships, the sports industry would be a much more expensive area of interest for prospective fans and a much less profitable venture for franchise owners and athletes.

What’s changed in sports marketing over the years, and how?
In the span of several decades, the complex yet inextricable relationship between sporting events and advertising has evolved continuously. From the introduction of radio and television to social media and live streaming technologies, this ongoing evolution of sports marketing has given rise to a specialized industry of professionals with expertise in developing relationships, both with corporations as well as consumers.

As much as the game has changed in the symbiosis of sporting events and marketing over the years, plenty of things have remained the same in the area of rules and regulations. In this post, we take a look at three of the most important dos and don’ts around sports marketing — particularly as relates to sporting events’ most notable advertisers.

 

So What Can & Can’t You Do? (With Examples)

Franchise owners, as well as top brand advertisers like Nike, Emirates, Mercedes-Benz and Gillette, are all well aware that sporting events give them access to what is not only an essentially trapped advertising audience but also one that is in a spending mood. For this reason, several rules and regulations have been put in place to protect both fans and proprietary interests from outright exploitation in this dynamic marketing scenario. Here are three examples of key prohibitions, in no particular order:

• False Association aka “Ambush Marketing” Ambush marketing is when a company coordinates a promotional campaign to imply an association with a team, franchise or sporting event under false pretenses. An example of this is the 2010 Soccer World Cup, where Dutch beer brewer Bavaria (a rival brand of event sponsor Budweiser) sent approximately three dozen women into the game dressed as fans for team Denmark. Upon getting to their seats, the women stripped off their team Denmark apparel to reveal identical orange Bavaria brand tops and miniskirts while drawing the attention of cameras, fans and the stadium titantron with loud and revelous behavior. The women were promptly ejected from the stadium minutes later.
• Calls to Unrelated Action or One-sided Advertising When a company purchases ad time or space from a sports franchise or event, there’s a reasonable expectation that the company will then go on to design an advertisement with at least some bearing on the event, sport or franchise they are advertising with. A vaping company, for example, can’t simply use their ad time or space to urge sports fans to sign up on their website for a chance to win a raffle-style vape mod giveaway in a completely arbitrary, unrelated advertisement.
• Encouragement or Elicitation of Gambling Elicitation is when a company attempts to increase advertising revenue via commissions through partnerships with sportsbook entities like BetDSI or UniBet. So while it’s perfectly fine for a rum or cigarette company to highlight their own products, they are not allowed to do so in a way that sponsors, condones or directs fans to the act of betting or gambling — either with a promotion of their own or a partnership program.

 

Is It Different for Cannabis? Sports Marketing & Emerging Industries

For emerging players such as the cannabis industry, the rules and regulations remain largely the same, except for the added consideration of cannabis’ legal status by state. It’s worth noting that advertisements for say cannabis food products or edibles would have an added layer of complexity for this reason.

While the number of states where recreational cannabis is legal continues to grow, additional coordination between cannabis companies and state programming directors would be needed to abide the laws in states where it’s not yet legal (or legal only for medical use in adults). It’s due to these extra layers of red tape that emerging industries such as cannabis — despite already boasting a multi-billion-dollar market — stay shy of advertising around sports events and franchises.