Chapter 23

Sports Content: The Olympic Law of the Rings and Other Games

The quadrennial quest for the gold has turned into alternating hot and cold biannual events. With the split of the Olympics into winter and summer games that are now held 2 years apart, viewers are surfeited with information and advertising associated with the golden rings. Among the trademarks in the United States, the Olympic symbols have a rarefied status—they are the subject of their own special trademark statute.

The Amateur Sports Act and the Olympic Symbols

Passed in 1978, the Amateur Sports Act is a special warning to the world that the Olympic symbols are trademarks not to be falsely used. The statute protects the words Olympic, Olympiad, Citius Altius Fortius, and the five interlocutory rings, and it prohibits any mark that falsely represents a connection to the U.S. Olympic Committee or the International Olympic Committee. Any unauthorized use of the marks in trade or advertising or that promotes programming or athletic events can be challenged by the U.S. Olympic Committee. The statute is so broad as to grant an absolute property right to the words. The U.S. Supreme Court held that the U.S. Olympic Committee's control over Olympic is unlimited, even by the Lanham Act defenses to a claim of trademark infringement. The rule does not infringe the First Amendment.

While phrases like Atlanta ′96 or Lillehammer Games test the limits of the statute but do not violate it, it has been held that the “Gay Olympic Games” is a violation. For the Winter Games at Salt Lake City, Utah, in 2002, a host of new trademarks were registered well in advance of the start of the Olympics. The phrases, like Salt Lake 2002 and SLC 2002, are not covered by the Amateur Sports Act but are fully protected by the trademark laws of the United States and other nations.

The elements of the statute are as follows:

• Protected trademarks. Olympic, Olympiad, Citius Altius Fortius, and the five interlocutory rings.
• Prohibition. Any unauthorized use of the marks for purposes of trade, inducing the sale of goods or services or promoting any theatrical exhibition, athletic performance, or competition.
• Penalties. The statute authorizes as much as $250,000 for penalties, injunctive relief, and destruction of offending material.
• Protected parties. The International Olympic Committee and the U.S. Olympic Committee and their licensees have standing to bring an action.

For the media, the test of the statute comes in two key ways. First, advertising that contains Olympic symbols must be screened and aired only with confidence that the users of the Olympic trademarks hold rights. Contracts with advertisers should contain guarantees that the use is authorized.

Second, programming must be monitored. There is no prohibition on news reporting of events or scores relating to the Olympics. It is touchier when stations not affiliated with the network licensed to broadcast the Olympic games try counterprogramming to attract an audience interested in the Olympics. The programming is protected by the First Amendment or may be copyright fair use; however, the use must be truthful and the promos for the programming must not suggest a false association with the games and a station or sponsor.

Olympic Controversies

During the 1996 Summer Games, there was much grousing by non-NBC affiliates as to how the network, which had paid billions to televise the Summer Games for many years, controlled access to events. While it is common for sports telecasts to be blacked out on nonaffiliated stations, in 1996 NBC took this practice one step further by restricting access to press briefings of Olympic news-related stories. Tightly controlling media access to news developments within the Olympic Village, NBC was able to prevent the other networks from televising news stories within the confines of the Olympics.

This control sparked controversy among the networks and brought charges of news management. While, under copyright law and the contracts that enforce the acquisition of those rights, NBC had the legal ability to control media access to the venue and the content that emanated from it, whether it be sports or news reporting, the degree to which it limited access to public statements by Olympic officials was unprecedented. NBC learned its lesson and did not repeat this news management practice when a judging scandal became hot news at the Salt Lake City 2002 Games. Other news media had full access to the news conferences and athletes.

Although doctoring photographs or staging events to re-create actual events are unacceptable media practices that have overt copyright implications, the 1996 isolation of news media from ongoing events raises novel concerns that may be more ethical than legal. Except for the DMCA's provisions regarding technological protection measures, copyright law facilitates control of content use rather than regulation of access to content. The degree to which other media should be restricted from unfolding events of public importance poses an important content dilemma. Does the policy supporting copyright law, which permits exclusivity in ownership of works tempered by fair use, need further recalibration? Will the legal tools at the command of the media now work against society's interests in a vigorous and competitive press? These issues will undoubtedly test the resolve of policy makers.

Copyright and access to content were not the only issues highlighted at the Olympics. Trademark questions also abound. The Atlanta Games were, by all accounts, the most commercialized Olympics ever, but the Salt Lake City Winter Games of 2002 gave their summer brethren a run for the money. Licensing rights to Olympic symbols are carried to an art form by the U.S. Olympic Committee. Dozens of product categories have been carved out, and many companies pay handsomely for the privilege of calling themselves an “Official Sponsor of the Olympic Games.”

However, that did not stop some creative professionals from pushing the Amateur Sports Act to its limit. For example, during the Atlanta Games, Nike—not an “official” sponsor—took over a warehouse just outside the Olympic Village and emblazoned it with the Nike “swoosh.” Visitors and passing camera crews would have been surprised to learn that Nike was not an authorized sponsor.

Counterfeit merchandise also generates much attention, because unofficially logoed merchandise can sell for a fraction of the cost of the real thing. Before official Olympic merchandise appeared in Salt Lake, 75% of all hats, T-shirts, and knickknacks were bootleg copies. Trademark police cleaned out the “bad stuff” to help ensure that tens of millions of local sales went to providers of the “right stuff.” This experience was consistent with every other recent Olympics. Private and public police now scrutinize the local venue outlets very carefully, and thanks to international treaties and federal legislation that specifically targets counterfeit goods designed to deliberately mislead consumers and misrepresent the source of branded goods, domestic and international purveyors of unauthorized Olympic and trademark goods can anticipate huge fines, damages, and even jail time, if caught.

Then, too, NBC's advertising practices played a role. While Olympic sponsors had first crack at network commercial availabilities, if any category for commercials did not sell out, they were offered to others. When product categories failed to sell out to official sponsors, spots were made available to competitors, who gleefully rushed in. As a result, in 1996, MCI spots aired in time slots that the official sponsor, AT&T, vacated. To the national audience, the placement of MCI spots within Olympic telecasts provided the same effect as if the upstart carrier paid for the privilege of being an Olympic sponsor.

The moral of the Olympic story is pay heed to intellectual property. The “road to the gold” is paved with copyrights and trademarks.

Digital technology has made major inroads in Olympic events, coverage, and merchandise. For the 2002 coverage, NBC featured digitally imposed flags on ice lanes to identify the home nation of speed skaters. “Simulcom” technology, pioneered by a small European firm, enabled NBC to superimpose two downhill skiers on the same path to show differences in form and speed on the same course. The Today Show revealed that one of the most popular Olympic gifts was a face photo superimposed on pictures of Olympians in action. Youngsters dreaming of Olympic gold could see their faces on the bodies of Sarah Hughes and Michelle Kwan in mid-air. Alert to copyright implications, The Today Show host, Matt Lauer, checked with the company making the digital pictures about copyright permissions for photographs. Yes, they pay photographers for rights. But what about the athletes? Matt did not inquire, but the rights of publicity and privacy require their approval, too.

Major Sports Means Major Content Rights

From collegiate campuses to professional arenas, the merchandising of sports teams grows annually and dramatically. Many teams squeeze every dollar they can from the value of trademarks and copyrights. Leading the pack is the New York Yankees, which formed sports cable and satellite networks (YES, Yankee Entertainment and Sports Network), announcing it wants $2 per month per subscriber. This fee is more than fivefold what other entertainment channels ask. The team gets it, because the Yankee brand is synonymous with legendary sports accomplishments.

For many professional teams, building new stadiums is the necessary ingredient for profitability. The gigantic costs of building new exhibition fields is passed down by naming rights, licensing to the highest bidder the right to put one's name on a stadium. The practice, which can generate millions of dollars annually, has a potential dark side: the link between a successful sports franchise with an ignoble commercial enterprise.

Perhaps the signature example involved the Houston Astros, whose home park was called Enron Field until Enron's 2001 bankruptcy made its mark synonymous with nefarious business practices and disgrace. It cost the Astros over $2 million for the right to remove Enron's name from its field. A similar price was paid by 2000 Super Bowl champs, the Baltimore Ravens, to delete bankrupt PSINet from its stadium walls. The lesson for all clever sports franchises in an era of highflying business crazes is hold onto quality control and termination rights. Keeping an eye out for escape clauses can save a lot of embarrassment.