Soon to host the Rugby World Cup (2011) and to co-host soonish the Cricket World Cup (2015), New Zealand is introducing a “Major Events Management Act” to “provide a clear, predictable and fair regime for dealing with ambush marketing issues.” Tim Coles kicks for goal.
Topic: Ambush Marketing
Who: New Zealand Parliament
Where: Wellington, New Zealand
When: 12 December 2006
The Major Events Management Bill, introduced to Parliament on 12 December 2006, implements the New Zealand government’s decision to enact protections against ambush marketing. The Bill comes ahead of the staging of a series of major international sporting competitions by New Zealand, including the Rowing World Championships in 2010 and Rugby World Cup in 2011.
The Bill received its first reading on 20 February 2007 and was subsequently referred to the Commerce Committee who called for public submissions on the Bill, for which the closing date was 5 April 2007.
The Bill addresses the two main types of ambush marketing, namely, ambush marketing by association and by intrusion. Although New Zealand’s existing laws are capable of addressing some ambush marketing activities, the Bill is recognition of the fact that significant developments have recently occurred in sponsorship expectations and marketing practises and that these developments have highlighted and exposed gaps in the law.
Major Events Management Bill
A sponsor or organiser of an event will only be able to benefit from the protections offered by the Bill if the event is designated a ‘Major Event’, i.e. one of international significance, that is not a regular event or one that New Zealand hosts as of right. In order for an event to be so designated the event organiser is required to make an application, whereupon the Governor-General may, on the recommendation of the Economic Development Minister declare the event to be a Major Event. Prior to making any such recommendation, the Economic Development Minister is required to consult with the Sports and Commerce Ministers and must take into account a range of factors including whether the event will; attract a large number of international and New Zealand participants/spectators, raise New Zealand’s profile, attract significant sponsorship and media coverage and offer substantial sporting, cultural, social, economic, or other benefits for New Zealand or New Zealanders.
The Governor-General will also, on the recommendation of the Economic Development Minister, declare the words and/or emblems that could denote a connection with the event and that will therefore be protected. However, the Minister is required to consider whether such a declaration is necessary to obtain maximum benefit for New Zealanders and to prevent unauthorised commercial exploitation of the event. The Minister must also consult with parties who are substantially affected.
Ambush marketing by association
The Bill prohibits any person from making any representation in a way that is likely to suggest to a reasonable person that there is an association between the Major Event and any goods, services or brands.
Where any protected words or emblems are used, a presumption arises that an association exists. It is particularly noteworthy that the prohibition will apply even if the representation is qualified by words such as ‘unauthorised’ or ‘unofficial’, or ‘other words that are intended to defeat the purpose [of the prohibition]’.
Ambush marketing by intrusion
The Economic Development Minister is empowered by the Bill to declare ‘clean zones’ consisting of a Major Event venue and areas directly proximate to it. All unauthorised advertising and street trading is prohibited in these clean zones.
Furthermore, there is a prohibition on any unauthorised advertising that is ‘clearly visible’ from a clean zone. However, advertising that could be seen from a clean zone, but where the message or purpose of the advertising is deemed sufficiently unclear, for example because is too small or is obscured, would fall outside the prohibition.
The Minister is also empowered to declare various transport routes, including motorways and railway lines within 5 km of a clean zone to be ‘clean transport routes’, in relation to which the prohibitions will apply.
Controls on sale and promotional use of Major Event tickets & scalping
The Bill prohibits the offering, giving away or selling of a ticket to a Major Event in connection with the promotion of goods or services and the scalping of tickets i.e. the sale-on of a ticket at a price in excess of its face-value.
The Bill provides for three categories of remedies; civil, criminal and administrative. The civil remedies include requiring an account of profits from the ambush marketer, damages and corrective advertising. For the criminal sanctions to take affect any breach of the Bill must have been intentional or knowing, whilst the administrative remedies empower enforcement officers to carry out specified administrative functions, including the issue of warnings to ambush marketers and the seizure and covering of unauthorised advertising.
Why this matters:
In seeking to implement a Bill of this nature, New Zealand is following an international trend begun in South Africa in 2002. The proposed Bill is however more far reaching than other countries’ legislation and borders on the extreme. It appears that a balance is no longer being struck between the interests of official sponsors/organisers and advertisers/media/athletes. Rather, it is the interests of official sponsors and event organisers that are the prime consideration.
As reported in previous articles on marketinglaw.co.uk, the increasing international trend for apparently draconian and disproportionate anti-ambush marketing legislation can have widely ranging negative consequences. For example, advertising and athletes’ endorsement revenues can be adversely affected, not to mention the threat to commercial free speech. Ironically, the strict enforcement of anti-ambush provisions also often results in bad PR for sport and organisers and official sponsors alike – it is hard to forget the sight of hundreds of Dutch football fans watching one of their team’s World Cup games in their underwear following the confiscation of their Bavaria branded lederhosen!
Impact in the UK
Historically a degree of ambush marketing has been allowed in the UK. The introduction of the London Olympic Games and Paralympic Games Bill however marked a watershed as the government bowed to pressure from event organisers to introduce specific anti-ambush laws that went beyond the traditional protections.
The danger now facing marketers in the UK is that should New Zealand up the ante by passing the proposed Bill in its current form, the UK will be forced to follow suit or risk being put at a significant competitive disadvantage when bidding for international events.
It looks like time is running out for ambush marketers.