27 May 2020 - Article
Ahead of the Tokyo 2020 Olympics, the International Olympic Committee (IOC) session held on 26 June 2019 introduced a sweeping relaxation to (the much debated) By-Law 3 of Rule 40 of the Olympic Charter.
Thanks to this amendment, the sponsors of athletes and other participants to the Olympic Games will have the possibility to use the image rights of their testimonials ‘for advertising purposes during the Olympic Games in accordance with the principles determined by the IOC Executive Board’.
‘Elementary my dear Watson’, you may think. To date, this right could not be taken for granted, though. Actually, a very wide-ranging ban was in force, whereby participants’ sponsors were prevented from any commercial use of their testimonials’ image rights during the so-called ‘blackout period’ (which normally runs from 9 days before the opening ceremony of the Games until 3 days after the closing ceremony).
This meant that, during such period, all companies that were not official Olympic sponsors could not carry out any marketing campaign or initiative featuring the participating athletes, including any social media post aimed at merely encouraging or congratulating an athlete, even where no Olympic symbols were used. Needless to say, the sponsor’s prohibition to use the testimonial’s name and image resulted in a lack of income for the testimonial.
An exception to Rule 40.3 was introduced in 2015, when the IOC allowed marketing campaigns during the blackout period, provided ‘only’ that approval be granted by the IOC or the relevant National Olympic Committee no less than about six months prior to the start of the Games.
In the face of numerous critics (especially by athletes and their sponsors) against the rule, the IOC contended that its goal was to ‘protect the rights of the entities that provide funding’ to the Games, i.e. the Olympic sponsors.
Controversy continued to spark among athletes but it did not lead to any improvements, except in Germany. Upon a claim brought by an independent body comprised of German top-level athletes, in February 2019 the Federal Cartel Office (FCO) affirmed that Rule 40.3 is ‘far too reaching’ and ‘abusive conduct’. As a result of the FCO decision, the IOC agreed that some of the restrictions imposed by the Olympic Rule be lifted with respect to German participants (e.g. the approval of non-Olympic sponsors’ promotional campaigns is considerably mitigated). Reportedly, this partial exemption from Rule 40.3 will last until the end of the Olympic Winter Games 2026.
Following the FCO decision, the IOC clarified that the foregoing concession would only apply to German athletes and that the rule would not per se be amended. However, the German case fuelled various calls on the IOC to provide for increased independent representation in sport and for competitors to be given a larger slice of Olympic revenues.
With the liberalization of Rule 40.3, the IOC seems, at last, to have softened the rigid stand taken thus far.
Although the extent of the flexibility of the ‘IOC principles’ referred to in the revised Rule 40.3 remains to be seen, the new wording of the regulation represents a significant move of the IOC towards the enhancement of Olympic athletes’ rights to maximise their sponsorship income during such a matchless career opportunity, whilst at the same time continuing to ensure the financial stability of the Olympic Movement.