Spotlight: organisation and commercialisation of sports events in Australia

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Commercialisation of sports events

i Types of and ownership in rights

Broadcasting rights are arguably the most valuable and lucrative rights available to sporting organisations to generate revenue from a sporting league. For example, in December 2021, the ARLC signed a five-year broadcast rights agreement (commencing in 2023) with Channel 9 (another commercial free-to-air station), Foxtel and Sky NZ (a New Zealand subscription television station), which is worth approximately A$2 billion.³⁶

Additionally, Australia has enacted 'anti-siphoning' laws, which provide a list of events that must be made available free to the general public.³⁷ This means that, in practice, subscription television providers, such as Foxtel, are prohibited from acquiring the rights to these events unless a free-to-air television channel also has the right to broadcast them. Any rights not acquired by free-to-air channels can then be acquired by subscription television providers. Currently, the list of anti-siphoning events that 'should be available to the general public' includes the following:³⁸

1. each event in the Olympic Games and Commonwealth Games;
2. each running of the Melbourne Cup;
3. each match in the Australian Open tennis tournament;
4. each match of the AFL and NRL;
5. each international rugby union test match and cricket match involving the Australian team; and
6. each match of the FIFA World Cup, each match of the FIFA qualification tournament involving the Australian team and the English Football Association Cup final.

Recent issues between Cricket Australia and Channel 7 in relation to broadcasting include proceedings in the Federal Court of Australia alleging breaches arising from the quality of the men's Big Bash League (BBL). In the claim, Channel 7 argues its media rights agreement with Cricket Australia meant the BBL should have been equal to the Indian Premier League in quality and standard but was far from it in a number of key areas, including:

1. scheduling;
2. the quality of players;
3. the amount of the salary cap; and
4. the failure to have auctions for each franchise.

Channel 7 states that Cricket Australia should not have scheduled BBL matches in competition with men's internationals and it is seeking compensation for an amount yet to be determined and the termination of the final two years of its television rights agreement. This matter is ongoing.³⁹

Image rights, sponsorship and merchandising are also valuable rights available to be exploited. However, the relatively small size of the Australian market, and the fact that many of Australia's major sports are primarily, if not solely, domestic (for example, the AFL and NRL) or played at an international level but among a relatively small number of nations (for example, cricket and rugby union), mean that their value is often limited compared with larger markets in other jurisdictions such as Europe or the United States.

ii Rights protection

Broadcasting, image rights, sponsorship and merchandising are primarily protected by the contractual provisions in place between the owners and licensees of these rights, but also by the statutory intellectual property rights. Primarily, this consists of ownership in:

1. trademarks under the Trade Marks Act 1995 (Cth), in property such as club names, logos and mascots; and
2. copyright under the Copyright Act 1968 (Cth), in property such as rule books, recorded images and footage of events, and photographs.

Additionally, rights owners are able to take action to protect the goodwill of their brand from misrepresentation through unauthorised use, which falls under the common law tort of passing off. In this context, passing off occurs when one person misrepresents that their goods (for example, merchandise) are the official, sanctioned goods of the rights owner (usually the sporting organisation or sporting club), or that he or she is affiliated with the rights owner. Similarly, action can be taken against persons who engage in misleading or deceptive conduct or make false or misleading representations via the ACL. Furthermore, the ACL can apply to cases of ambush marketing.

Australia also has several other legislative protections, in addition to laws protecting intellectual property rights that can be used to prevent ambush marketing at sporting events. Legislation was enacted to regulate the commercial use of images associated with the 2015 Asian Cup, the 2015 Cricket World Cup and the 2018 Commonwealth Games to restrict the ability of entities that are not official sponsors to use event images, or represent that they are associated with the event.⁴⁰ Similar legislation prohibits the unauthorised use of images and phrases associated with the Olympics.⁴¹

In 2016, the Australian Olympic Committee (AOC) brought proceedings against Telstra in relation to alleged ambush marketing. Telstra had entered into an agreement with Channel 7 under which Telstra would sponsor Channel 7's broadcast of the Olympics and create a mobile app called 'Olympics on 7'. Telstra's advertising campaign then promoted watching the Olympics on the Olympics on 7 app, despite the fact that it did not have any direct association with the Olympics. The AOC alleged that Telstra engaged in misleading and deceptive conduct and made false or misleading misrepresentations in representing that they were associated with the Olympics, in breach of the ACL, and engaged in an unlawful use of protected Olympic expressions for commercial purposes in breach of the Olympic Insignia Protection Act 1987 (Cth).⁴² However, the Federal Court of Australia ruled against the AOC and held that Telstra's advertisements did not suggest to the reasonable person that Telstra was a sponsor of an Olympic body. The Court held that the legislation was not breached if the advertisements simply created uncertainty as to the nature of Telstra's association with the Olympics.⁴³ The AOC appealed the decision, but, in October 2017, the Full Court of the Federal Court of Australia upheld the first instance decision and agreed that the advertisements did not suggest to a reasonable person that Telstra was a sponsor of bodies and teams associated with the Rio Olympic Games.⁴⁴