London 2012: image rights
UK Sport and the British Olympic Association (BOA) are to meet with top Olympic athletes in an attempt to secure their participation in a collective sponsorship scheme.
The scheme requires athletes to promote the interests of certain commercial partners in order to qualify for UK lottery funding. It has been reported that a number of the 1400 publicly-funded athletes have questioned the terms of the scheme. Athletes who already receive lottery funding are required to commit to around 3 days of promotional activities and the new scheme is likely to require some additional time commitment.
High profile athletes are concerned, however, at the impact the scheme may have on the commercial value of their individual image rights if their own private sponsors feel that their sponsorship message is being diluted.
Ofcom consultation into Sky pay TV dominance
Ofcom has published proposals in relation to enforcing fixed wholesale costs to make Sky's premium channels more widely available.
As part of its investigation into the British pay TV market, Ofcom has stated its view that Sky has gained a position of market power in relation to the wholesale markets for premium sports and movies channels which they said harbour content of importance to consumers, are not replicable and leave no adequate substitutes.
Ofcom notes that Sky has not concluded any wholesale agreements for premium channels with non-cable retailers (at the moment they are available only to Sky Satellite subscribers or on cable). As a result, Ofcom feels the situation is not consistent with fair and effective competition in the market.
The essential element of the proposal involves a "wholesale must-offer system" that would require Sky to offer its premium channels (Sky Sports 1 & 2 and Sky Movies) on a wholesale basis to retailers – in other words Ofcom would enforce a cap on the cost charged by Sky for the channels, and ensure that they are made available to other platforms for example BT Vision, Top-Up TV and on other broadband services.
Under Ofcom's proposals, Sky could be forced to cut the wholesale rates it charges for the channels by up to 30%. Sky's profit margin on the channels could be severely cut, although Ofcom actually indicated that they believe the move could make Sky greater wholesale revenues as a result. Sky, has rejected this stance and is concerned at what it sees as "an unprecedented level of interference in commercial markets."
Additionally, Ofcom intends to consult with the FA Premier League in relation to the way in which Sky buys its rights to screen their football matches. These are next up for auction in 2012 and the regulator has stated that it wishes to ensure this auction complies with competition law. Ofcom refer to the possibility of seeking new commitments from the Premier League in relation to the sale of the rights, on top of those given to the European Commission recently (which ultimately opened the door to competition from Setanta). The Premier League however has indicated its reluctance to take steps that could result in media organisations being put off from bidding for rights at the appropriate market value.
Ofcom is to consult further before setting out its final verdict.
Ambush Marketing at SW19
The rise in ambush marketing activities continues and has resurfaced at this year's Wimbledon Championships.
Amid the clamour for a first home champion in the men's event since 1936, some advertising observers have noted Andy Murray's preference for drinking Highland Spring branded water rather than that of Evian, one of 14 official sponsors.
Ambushing is the term given to the attempts by rivals of official sponsors or event partners to pass themselves off as official event sponsors or reduce the attention given to the official sponsors.
The Organising Committee of the 2012 Olympic Games in London is committed to taking a zero tolerance approach to ambushing and already has considerable powers in place under the Olympic and Paralympic Games Act. The Beijing Organising Committee for the 2008 Games even went to the lengths of taking control of all prominent advertising sites in the Chinese capital for 3 months and reserving these sites for official sponsors.
Although difficult to prevent entirely, it is very common now for event organisers to take steps to prevent spectators entering events with drinks, food or even clothes from unofficial sponsors and such products being confiscated at the gates and returned at the end of the day. Broadcasters are also obliged in many cases to avoid showing close ups of fans with unofficial products as official sponsors seek to protect their advertising investments and maximise their exposure.