This is an excerpt from Sport Marketing-4th Edition by Bernard J. Mullin,Stephen HardyW & illiam A. Sutton.
In this section, we consider several emerging issues at the intersection of the law and sport marketing.
Athletes’ Use of Social Media
In 2012 Nike became the first company in the United Kingdom to have a Twitter campaign banned after the UK’s Advertising Standards Authority (ASA) decided that its use of the personal accounts of soccer star Wayne Rooney violated rules for clearly communicating to the public that his tweets were advertisements.140 Nike, who had an endorsement deal with Rooney, ran the Twitter campaign as part of its wider Make It Count advertising campaign. Rooney’s tweet, which went out to his 4.37 million followers, said: "My resolution - to start the year as a champion, and finish it as a champion . . . #makeitcount gonike.me/make it count." As stated by the ASA, "We considered that the Nike reference was not prominent and could be missed. We considered there was nothing obvious in the tweets to indicate they were Nike marketing communications."141
For sport marketers, ranging from sport organizations to athlete representation firms to sponsors, the regulations that govern the commercial use of social media are an area of growing concern. The Rooney example illustrates the effect of the UK’s ASA. The corresponding authority in the United States is the Federal Trade Commission (FTC), and it too has focused increasing attention on the issue of athletes’ use of social media when used to promote endorsement deals.
In 2010 the FTC published new guidelines for companies and athletes seeking to leverage social media to promote products and services with the enactment of its Guides Concerning the Use of Endorsements and Testimonials in Advertising.142 The new Guides clarify that celebrities, including athletes, have a duty to disclose their relationships with companies when making endorsements outside the context of traditional advertising in which the audience would not otherwise reasonably expect that a financial connection exists between the athlete and the advertiser. As examples, the Guides include (illustrated here in the context of athletes) whether the athlete is compensated, whether the company provided the product or service to the athlete for free, the length of the relationship between the company and the athlete, the extent of the athlete’s previous receipt of products or services from the company or the likelihood of future receipt of such products or services, and the value of the items or services received by the athlete.
The new Guides also offer additional guidance by listing nine hypothetical examples. The third hypothetical presented in the Guides is relevant to sport figures, because it discusses an appearance by a well-known professional tennis player on a television talk show. In the hypothetical example, the show host compliments the player on her recent solid play. The player responds by crediting her improved play to her improved vision, the result of laser vision correction surgery done at a clinic that she identifies by name. The player raves about the ease of the procedure, the kindness of the eye doctor, and other benefits, such as the ease of driving at night. The player does not reveal that she has a contractual relationship with the eye doctor to speak positively about the eye company in public settings, but she does not appear in any broadcast commercials for the company. This hypothetical states that the weight and credibility of the player’s endorsement is adversely affected because consumers are unaware of the contractual relationship that the player has with the eye doctor. The Guides thus direct that an athlete in this situation must disclose the relationship.
The hypothetical continues but alters the facts to analyze the player’s discussion of the eye doctor on a social media site. Assume that instead of speaking about the clinic in a television interview, the tennis player touts the results of her surgery, mentioning the clinic by name, on a social networking site that allows her fans to read in real time what is happening in her life. Given the nature of the medium in which her endorsement is disseminated, consumers might not realize that she is a paid endorser. Because that information might affect the weight that consumers give to her endorsement, her relationship with the clinic should be disclosed.143
Companies using athletes as an endorsement vehicle need to remember the underlying rationale of the Guides - that consumers have a right to know when they are being subjected to a sales pitch. Although the Guides do not address every potential scenario involving companies’ use of athletes, endorsements, and social media, they provide a framework for recommendations that these companies, as well as sport organizations, athletes, and their agents, should be aware of before engaging in marketing campaigns using social media.
Among other measures, companies should provide training and guidance to their athlete endorsers about how to use social media in a manner that adheres to the Guides. Such measures will best address the joint liability to both parties that may arise under the act. For instance, with respect to Twitter, it is recommended that endorsers end their tweets with, depending on the situation, #ad, #spon (short for "sponsored by"), or #samp (short for "free samples provided") so as to inform consumers truthfully.144
Athletes Trademarking Names and Slogans
A growing trend among professional and high-profile amateur (Olympic) athletes is seeking trademark protection of their names, slogans, or catch phrases associated with them.145 Players use the benefits of trademark law not only to assert ownership and control over their trademarked names and slogans but also to generate ancillary revenues by licensing the use of these marks on all types of commercial products and services. Noted examples include the NBA’s Jeremy Lin’s trademarking of the word "Linsanity"; Terrell Owens’ trademarking of the phrase "Getcha popcorn ready," a phrase that he coined when he was acquired by the Dallas Cowboys in 2006; American Olympic swimmer Ryan Lochte’s trademarking of his odd catchphrase "Jeah," which he explained as having been ripped from rapper Young Jeezy’s often-used expression "Chea!"; and Tim Tebow’s trademark registration for the image of "Tebowing," whereby he kneels with his fist to his forehead as though in prayer.146
Lawyers who handle intellectual property matters for athletes say that the practice of trademarking names and phrases has accelerated recently as athletes seek to extend their brands into the entertainment world.147 Furthermore, with the explosive growth of social media, trademarking an athlete’s name gives the athlete and his or her legal team greater ability to control how the trademark is used and on what products or services, as well as monitor for unauthorized uses, ultimately enhancing the overall value of the athlete’s brand.
Use of Current and Former Student-Athletes Likenesses in Video Games
One of the most hotly contested legal issues facing marketers of college sports, the NCAA, and the manufacturers of sport video games has been the use of likenesses of current and former student-athletes, notably in EA Sports video games, which the athletes have alleged is a violation of their right of publicity. In 2009 Sam Keller, a former student-athlete and quarterback for Arizona State University and the University of Nebraska, filed a class-action lawsuit against Electronic Arts, the NCAA, and the Collegiate Licensing Company (CLC) in the United States District Court Northern District of California. He sued EA for using his likeness without his consent and the NCAA and CLC for facilitating that use.148 Keller also claimed that the use of his likeness and the likenesses of other student-athletes violated NCAA bylaw 12.5, which prohibits the commercial licensing of the "name, picture or likeness" of athletes at NCAA-member institutions.149 Keller’s proposed class consisted of all student-athletes whose likenesses had been used without their consent in the NCAA Football and NCAA Basketball video games. The complaint alleged that EA’s unauthorized use of his likeness deprived the college football athletes of their statutory and common law right of publicity.150 In December 2010 the Keller class action was consolidated with another class action brought against EA and the NCAA by former UCLA student-athlete and basketball player Ed O’Bannon.151 The O’Bannon complaint, asserting the legal rights of former collegiate players, included antitrust claims against the NCAA that were dismissed, but Keller’s right of publicity claims against EA survived. EA has argued that it does not use student-athlete likeness or, alternatively, that any use of athlete likenesses are protected expression under the First Amendment. In September 2013, EA Sports agreed to pay a reported $40 million to settle the O’Bannon/Keller right of publicity lawsuit.152 The settlement was undoubtedly spurred by an earlier 3rd Circuit Court of Appeals decision in the Hart vs. Electronic Arts Sports case discussed below. The O’Bannon/Keller right of publicity lawsuit against the NCAA is still pending.
The use of collegiate player names and stats has also now expanded to include fantasy sports. In 2008 CBSSports.com announced plans to host a fantasy college football game using the names and statistics of current student-athletes.153 Although the move raised eyebrows in the college sports community because it was the first fantasy game to use actual player names, the NCAA decided not to intervene to stop the game "because of the added exposure fantasy sports can bring the student-athlete," and, according to the NCAA president at the time, Myles Brand, because "the right of publicity is held by the student-athletes, not the NCAA."154 The NCAA’s decision not to seek to protect the intellectual property rights of current student-athletes raised concerns about the marketing and legal implications resulting from the rapid evolution of licensing the images of amateur athletes for use in commercial purposes. In 2009 the NCAA Task Force on Commercial Activities responded to the growing problem and recommended that member institutions address commercial activity on a campus-by-campus basis. The case also raised the lingering issue of whether the names of amateur athletes and their statistics are already in the public domain and therefore do not need a license to be used in fantasy sports.
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