The 2010 Fifa World Cup brings with it huge potential in the form of advertising opportunities and sponsorship opportunities. However, as big as this pie may be, only a limited number of advertisers and sponsors will get a taste. The reason for the necessitated restriction is to protect those sponsors who have (or will be paying) substantial amounts to Fifa for the honour of being an official sponsor of the Fifa Soccer World Cup.
In terms of Fifa’s contracts with its various partners and other sponsors, Fifa is duty bound to protect the rights of such partners and sponsors from any forms of ambush marketing. In return for the large sponsorship amounts, Fifa is under the obligation to ensure that these sponsors receive the publicity that they paid for and to ensure that those who have not paid for any such publicity rights do not receive any such publicity.
For Fifa it means that their contracts with the official broadcasters will have to protect the official sponsors by placing certain restrictions on the broadcaster as to whom it may license broadcasting rights and to whom any such broadcaster may sell any advertising time or space.
Fifa’s contracts with its various partners and sponsors distinguishes between its international partners (to whom the most rights and publicity will be granted and include Adidas and Coca-Cola followed by the international sponsors and finally the national sponsors.
Even in local terms the issue of broadcasting rights has become far more valuable and sophisticated. In the past, the owners of broadcasting rights (such as the cricket, soccer or rugby unions) would simply dispose of these rights as a “package deal” and with it many other commercial rights, including the right to content. However, sports bodies have now begun to realise the value associated with these rights and will often now either split these rights up and sell them to various parties or sell limited rights and retain others for itself. Also, with the radical advancement of technology and the various ways of broadcasting as well as the number of new broadcasters entering into the playing field, the sale of broadcasting rights becomes far more complicated and generally lengthier to deal with.
To complicate matters further, the Independent Communications Authority of South Africa (Icasa) would also have a say in which broadcasters broadcast which events. In terms of the Icasa Sports Broadcasting Rights Regulations of 2003, sporting events which are classified as “national sporting events”, for example soccer matches played by Bafana Bafana in the Fifa World Cup and all cricket matches involving the Proteas in the ICC Cricket World Cup, must be broadcast live, delayed live, or delayed on free-to-air channels – therefore allowing as much of the general public as possible to view such event. To maximise revenue, another broadcaster would purchase the broadcast rights for the event and license this to the free-to-air channel or grant the free-to-air channel the rights to broadcast a delayed broadcast of the event.
One must also take into account competition law aspects which may come into play in selling broadcast rights. Such issues could include price fixing and engaging in monopolistic conduct which would be open to challenge by competitors.
There is no question that broadcasts rights are the most valuable (and profitable) rights which an event organiser or sports body has. Accordingly, the disposal thereof needs to be dealt with more carefully than in the past.
Elliott Wood is the head of Sports Law at Werksmans Inc.