Academic journal article International Journal of Sports Marketing & Sponsorship

When Do Ex-Sponsors Become Ambush Marketers?

Academic journal article International Journal of Sports Marketing & Sponsorship

When Do Ex-Sponsors Become Ambush Marketers?

Article excerpt

Executive Summary

Sponsorship's growth has paralleled the increasingly-commercial focus major sporting organisations now have. Event owners now offer several different sponsorship options, but work to avoid conflicts of interest that would occur if competitors secured rights within the same sponsorship category. This practice enables sponsors to obtain exclusivity, thereby increasing the value of the sponsorship and the revenue obtained by event owners. Many companies now find they have too few financial resources to support involvement in major events while others, even if they have the resources, find their bids are unsuccessful.

This situation has generated feelings of disgruntlement among some unsuccessful bidders or other competitors, some of whom have engaged in behaviour that detracts from the sponsorship or that attempts to imply some official association with the event. This behaviour may confuse consumers about the actual sponsor of the event, and dilute the benefits the official sponsor expects to obtain. Conduct where competitors detract from a rival's sponsorship in this way has become known as "ambush marketing" and many researchers have criticised this behaviour as unethical and even immoral.

Despite the criticisms levelled at alleged ambushers, in many cases their behaviour is not illegal as they do not breach copyright or mis-appropriate registered marks. Indeed, the structure of some sponsorship contracts tacitly allows ambushing activities, thereby protecting the sponsor's revenue stream. The fact that some "ambushing" may be legal highlights the importance of registering all marks associated with a team or event. Furthermore, contracts between event or team owners and sponsors should also clearly specify any residual rights available to the sponsor at the conclusion of the contract.

Although these moves may help protect future sponsorships, event and team owners have paid little attention to how they manage the shared history that develops during the course of a sponsorship contract. This latter question arose recently when Canterbury International Limited (CIL), supplier of team apparel to the New Zealand All Blacks from 1918 to 1999, launched a range of jerseys that celebrated their involvement with a legendary All Black team, the "Invincibles". The New Zealand Rugby Football Union (NZRFU) claimed Canterbury had infringed their trademarks and that their behaviour constituted an attempt to pass themselves off as sponsors of the All Blacks. However, the NZRFU had not registered the specific mark used by Canterbury and the Court refused to grant an interim injunction requiring Canterbury to cease producing and marketing their garments. The judge also found that claims that consumers would be led to believe Canterbury still sponsored the All Blacks or had a contractual association with the NZRFU were insufficiently well-documented to support the granting of an injunction.

Although this case is based on a supply contract, its implications go beyond this specific form of sponsorship. In particular, the case suggests that event owners need to register all marks associated with their event or team. Where they have enjoyed the long-term support of a sponsor, they may also need to recognise that the sponsor has an entitlement to aspects of the history that developed over the sponsorship period. All sponsorship contracts will need to address this factor in future, and event and team owners may also need to weigh the attractiveness of potential sponsorship investments against the cost of sharing images of the team or event with former sponsors.

Introduction

Since the overt commercialisation of the 1984 Los Angeles Olympic Games, several researchers have discussed the problem of ambush marketing, a practice alleged to occur when a sponsor's competitors pass themselves off as somehow associated with the event in question. Most reported instances of ambush marketing have occurred around major events, such as the Olympic Games or the Soccer or Rugby World Cups, where the sponsorship and media rights are very expensive and large corporations vie to secure these. …

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