Sports Marketing Law
By Paul Horvath – Readers are directed to read this summary
together with the Collective Bargaining Agreement (CBA) to
ensure that all references to clauses in the CBA are current
Sportslawyer 5/221 Queens St, Melbourne, VIC 3000 | T: 03 9642 0435 | E: [email protected]
Collective Bargaining and The Australian Football
League: Has it taken away too many image rights
from the player?
promotional activities are
directed to the promotion of
Australian football, the AFL or
the player’s club, and may
include promotion of the game,
an AFL or AFL club protected
sponsor. Copyright or other
rights in relation to the
promotional activity is assigned
to the AFL.
In Australia, the television
rights for the Australian Football
League (“AFL”) football were
sold in 2006 for $A780 million
for 5 years. The National Football League (“NFL”) television
rights in America were sold for
$US17.6billion in 1998 under an
eight year contract. This equates
to $US2.2billion per year (almost $A4billion). On any view,
football is big business.
Given that a player in the AFL
will have a limited lifespan in the
sport, it is essential that he
maximise his income during that
time. Contracts are negotiated
between clubs and players
with the help of agents,
managers or parents.
The income under the contract
is but one aspect of the earnings
a player can reap from being a
football player. Other sponsorship and endorsements can be
a very lucrative area for the
player.
Upon signing the Standard
Playing Contract (“the contract”)
which is prepared in agreement
between the AFL and the Australian Football League Players
Association (“AFLPA”) all AFL
players are then bound by that
contract which adopts and incorporates all of the terms of the
Collective Bargaining Agreement
(CBA) which currently exists.
The CBA came into operation in
1992, the first for any sport in
Australia. The document provides a number of basic salary
conditions for all players, and
governs and regulates other
aspects of the player’s
engagement as a player in the
AFL.
A player can use his image for
promotional or marketing
purposes provided that this use
does not conflict with an AFL
protected sponsor or his AFL
club protected sponsors. AFL
property, such as uniform or
intellectual property may only be
used with the permission of the
AFL. The use of the image must
not be “prejudicial to Australian
Football”. Players are obliged to
make themselves available for
up to fifteen events per year
for their AFL club and up to six
events per year for the AFL.
An automatic license for the use
of the player’s image is given
to the AFL or the club for these
promotional purposes. These
The AFL may also use a player’s
image for AFL licensing activities
if it has first obtained the consent of the player. Once again,
copyright or other rights relating
to such licensing activities are
automatically assigned to the
AFL and the consent of the player “shall not be unreasonably
withheld”. A player can object to
being involved in an AFL licensing activity where it conflicts
with a personal sponsor of that
player, or if the “activity relates
to tobacco, drugs, alcohol, race
or religious purposes”. These are
deemed to be instances of
reasonable withholding of
consent.
What is reasonable and what
is unreasonable has been very
limited by the definition contained in the CBA. These clauses
are often contained in contracts
for sports and media personnel,
but the reasonable withholding
of consent has elsewhere been
more broadly defined.
For example, consent could be
reasonably withheld if the proposed use of the image would
seriously hurt the player’s
reputation.
Automatic consent is deemed to
be given to the AFL for the use
of the player’s image in relation to trading cards, stickers,
posters, greeting cards, badges,
mugs, videos and computer
games. Otherwise, the AFL re-
Sportslawyer 5/221 Queens St, Melbourne, VIC 3000 | T: 03 9642 0435 | E: [email protected]
quests consent of a player and
the consent is deemed as being
given to the AFL unless an
objection to the request is
received by the AFL within seven
days.
It appears that the CBA is
weighted in favour of the AFL’s
use of a player’s image given
that consent is automatic in
respect of some uses of the
player image, and is presumed
unless the player objects within
a given timeframe.
A particular problem area seems
to be in relation to the many
sponsors who a player must not
offend or compete against. This
may significantly limit the sponsors who a player may
promote on an individual basis
and therefore the marketing
ability they have for their image
outside what is required for the
AFL and the AFL club.
Players are permitted to use
their own image for personal
promotional activities so long as
there is no “conflict” with AFL
protected sponsors or AFL club
protected sponsors or certain
AFL licensees if AFL property is
being used.
AFL consent is not required for
personal promotional activities
where AFL property or AFL
intellectual property is not used.
Where a player does seek the
consent of the AFL to use either
AFL property or intellectual
property for personal promotional activities, a written request
must be forwarded to the AFL.
Fees are then negotiated
between the player and the AFL,
but most importantly the AFL
reserves the right to reject the
request and the right to reject
materials submitted. This
“
“
For example, consent could be reasonably withheld if
the proposed use of the image would seriously hurt the
player’s reputation.
provides the AFL with very broad
and unfettered power to refuse
consent to the player for the
use of AFL property or
intellectual property.
There is also a clause in the CBA
relating to player footwear.
Provided that a club does not
have an existing contract or
agreement for a player to wear
particular footwear, the player
may use the footwear of his
choice. Future contracts entered
in to by the AFL or the AFL club
cannot restrict the player’s ability to wear footwear of his own
choice. This change was implemented as a number of players were unable to wear
the boots that
emanated from
his club footwear sponsor.
Some players
needed customised boots
to suit their
feet. Others
had clashes
with personal
sponsorships.
Whilst a
number
of players
have sponsorships which
include clothing
and footwear, a
number of less
recognizable players still have to
pay for their own
boots.
It is promotional or marketing
activities that can enhance the
income that can be
generated by any AFL player, let
alone any sports person.
Endorsement revenue may
provide an athlete with income
greater than the income
received directly through a
sport.
Andre Agassi and Shane Warne
are reported to earn most of
their money in this way. Greg
Norman earned $A13.1 million
in 1992 and it could be safely
assumed that a great proportion
was not for his participation in
the game of golf.
Under Victorian and Australian
law, an AFL player does not own
any rights to his personality,
name, image or likeness. Those
things are usually protected
under the law of intellectual
property, rather than things that
can be protected by themselves.
AFL players and other athletes
can obtain legal protection under
the
Trade
Practices
Act. Players have
a right
to take
action
against
any
corporation
which
misleads
or deceives (or
engages
inconduct
which is
likely to
mislead
or deceive) the
public into believing that they have
an affiliation with,
or that their goods or services
are endorsed or approved by a
player when thisis in fact not the
case.
The tort of passing off can also
be used. To succeed in a passing
off action it must be shown that
the athlete or player was used
Sportslawyer 5/221 Queens St, Melbourne, VIC 3000 | T: 03 9642 0435 | E: [email protected]
without permission to promote a
product or service. However one
limitation to the use of this
action is that the athlete or
player must show that they
carry on a business and that
they therefore have a business
reputation.
This will limit the action to more
high profile players or athletes
as they can be shown to have
a sporting personality which
operates as a separate business
to their sporting prowess on
the field. Less well known players would have difficulty showing they are in the business of
marketing their personality. The
second difficulty is that there
must be a misrepresentation to
the public and the athlete would
need to show that they are “well
known and recognisable in the
broader community” rather than
simply being “well known within
their own sporting community”.
A player may also seek to
protect his personality via the
law of defamation. If a publication causes people to think less
of the player, and they are put in
a bad light, then an action may
lie for defamation.
Copyright law is available to a
player in relation to regulating
the reproductions of his name
and image and written works,
for example, articles, books,
drawings, photographs or
biographies.
The Trademarks Act can also
be used to protect aspects of a
player’s image and personality.
The difference between copyright and trademark laws is the
need for registration of a trademark. Copyright protection is
automatic and need not be reg-
istered. Trademark protection is
not contingent upon registration
but, once registered, a trademark becomes personal property
and is capable of being asigned,
for example, to a company to
exploit the marketing
opportunities relating to the
trademark.
In terms of a player’s common
law rights, a common law action
for breach of contract could
be commenced if the terms of
the contract (and by extension
the CBA) were breached.
If, for example, the AFL
breached any of the conditions
that relate to the player’s
intellectual property rights, an
action for a breach of contract
might be successful.
Restraint of Trade issues are
important. An example of a
restraint at common law could
be the prevention of a player
from maximizing his income by
preventing him from commenting on or criticizing a sporting
league or association to magazines or newspapers during their
membership or for a time after
ceasing membership.
Large transfer fees or the prevention of a player from playing for another club for a period
after leaving the first club could
also be a restraint of trade.
The test applied in the courts is
whether the restraint acts to the
benefit of the league or association without having too wide
an effect or disadvantaging too
many people. An example of
a reasonable restraint of trade
provision is banning a player for
using performance enhancing
drugs.
player image and marketing
rights need clarification. The
CBA for the AFL appears to be
weighted in favour of the AFL
and needs to be more balanced.
There are clearly competing
interests for the marketing and
image rights of players. The
AFL interest is in the preservation and promotion of the game,
whilst at the same time it is a
not for profit organisation. If
it achieves its objectives, ever
increasing revenues are
generated which are returned to
the clubs and to the players. The
players and the AFL Players Association seek to maximise the
financial returns for the player in
the limited lifespan he enjoys at
the elite level. In reality it is the
elite players whose sponsorship
opportunities are most curtailed
under the CBA.
We have recently seen a very
good illustration of sponsorship
impact in the AFL arena.
Royce Vardy drove his car with a
blood alcohol level of 0.14. The
Transport Accident Commission
paid an estimated $750,000 to
the Richmond Football Club per
year and were badly embarrassed by the incident. They
considered terminating the
sponsorship, but
ultimately settled for a
In conclusion, there are a
number of areas in which the
Sportslawyer 5/221 Queens St, Melbourne, VIC 3000 | T: 03 9642 0435 | E: [email protected]
$50,000.00 “fine” for Richmond.
The player came close to being
sacked, but instead was fined
$5,000.00 (the maximum), suspended from training with his
team, prohibited from taking
part in the pre-season competition, and placed on community
service for the season.
A clear contrast can be drawn
between the treatment of Vardy
and Ronnie Burns of Geelong
who was caught drink driving a
few weeks later. The latter was
not punished at all by
his club for a similar indiscretion
to Vardy. That is the nature of
sports sponsorship. When a
sponsor’s interests are at stake,
the sponsorship beneficiaries
– in this case the club – must
act to protect its revenue
source. If sponsorship interests
are too protected, we may see
players bringing actions based
on restraint of trade, as may be
argued in relation to AFL and
AFL club protected sponsors.
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Sportslawyer 5/221 Queens St, Melbourne, VIC 3000 | T: 03 9642 0435 | E: [email protected]