IOC’s Rule 40 further diluted by German Cartel Office ruling

The IOC has reached an agreement with the German Cartel Office to further dilute the scope of its controversial Rule 40, which places marketing restrictions on athletes while Olympic Games are ongoing.

The German Cartel Office said on Wednesday that the IOC and German Olympic Sports Confederation (DOSB) were subject to competition laws in the country and needed to grant more promotional rights to athletes ahead of and during the event. It also described Rule 40 as: “too far reaching” and “abusive conduct”.

Rule 40 is the clause written into the Olympic Charter to protect the exclusivity of the IOC’s TOP partner programme. It states that: “except as permitted by the IOC Executive Board, no competitor, coach, trainer or official who participates in the Olympic Games may allow his person, name, picture or sports performances to be used for advertising purposes during the Olympic Games.”

The IOC has had particular problems enforcing Rule 40 since the dawn of social media, and athletes have become increasingly vocal about having to break ties with their sponsors during the Games.

At the Rio Olympics, the IOC lifted the advertising blackout on non-Olympic partners meaning athletes could appear in campaigns for long-term partners during the Games. This was subject to special dispensation from their National Olympic Committees and a series of convoluted restrictions that prohibited those sponsors from using Olympic-related words like ‘Rio’, ‘Gold’, ‘Olympian’ and ‘Medal’.

Ahead of the Pyeongchang Olympics, the IOC and DOSB negotiated a further loosening of restrictions that applied to German athletes.

Under the latest German Cartel Office ruling, German athlete advertising activities during the Games will no longer have to be cleared by the DOSB while terms such as ‘medal’, ‘gold’, ‘silver’, ‘bronze’, ‘Summer Games’ and ‘Winter Games’ are allowed to be used.

Athletes will also be allowed to use social media more freely and post pictures of themselves competing at the Olympics, provided no Olympic symbols are visible.

Andreas Mundt, president of the German Cartel Office, said: “We ensure that the advertising opportunities of German athletes and their sponsors during the Olympic Games, which the DOSB and IOC significantly restricted in the past, are extended.

“While athletes are the key figures of Olympic Games, they cannot benefit directly from the IOC’s high advertising revenue generated with official Olympic sponsors. However, as the Games mark the height of their sporting careers, self-marketing during the Games plays a very important role.

“Our decision grants German athletes more leeway when it comes to marketing themselves during the Olympic Games, for example as far as the use of certain ‘Olympic’ terms or their pictures taken in sports events, or social media activities are concerned.”

The ruling could lead other cartel offices across Europe to take similar action. In an interview with SportBusiness ahead of the Pyeongchang Olympics, Patrick Nally, the man who advised the IOC to centralise its sponsorship rights and who was instrumental in the creation of the TOP sponsorship programme at the start of the 1980’s, said any dilution of Rule 40 would damage the IOC’s TOP Partner Programme.

“You can’t expect companies to continue to feed substantial sums of money to support the Olympics,” he said, “if the competitors can be very clever and sign up 20 to 30 well-selected athletes who would give a good level of exposure. Giving rights back to athletes, getting other sponsors that are competing with official sponsors, really is going to send it backwards again and rather than creating more revenue it will create less revenue.”

An IOC spokesperson told SportBusiness the organisation welcomed the fact the revised Rule 40 and social media guidelines had been agreed until the end of the 2026 Winter Olympics. They also emphasised the fact that athletes benefit indirectly from the TOP Programme through redistribution of revenues.

“The IOC redistributes 90 per cent of its income to the wider sporting movement, which means that every day the equivalent of $3.4m goes to help athletes, Organising Committees of the Olympic Games and sports organisations at all levels around the world.

“In addition, Rule 40 helps ensure the stability of the financing of the Olympic Movement, in particular the Olympic Games and Olympic teams around the world. The Rule helps protect the rights of the entities that provide funding: primarily the IOC’s Worldwide Olympic Partners, the NOCs’ sponsors, and the sponsors of the Organising Committees of the respective Olympic Games. The Games take place in a largely non-commercialised field-of-play environment. As a result, the Rule helps by limiting advertising measures undertaken by non-Olympic sponsors with participants in the Olympic Games, which create an unauthorised association with the Olympic Games without the sponsors in question having made a financial contribution to the organisation of the Games.”

The spokesperson also emphasised that the German Cartel Office continued to recognise Rule 40.

“With its decision, the FCO recognised that there are legitimate reasons for restricting individual athletes’ advertising opportunities in order to ensure the ongoing organisation of the Olympic Games. At the same time, any implementation of Rule 40 at the national level necessarily has to take all applicable laws and regulations as well as pertinent case law into account, in this instance, particular German case law.

“Rule 40 is the fundamental basis for the solidarity model of the Olympic Games. This model is in the interest of athletes from all around the world and the Olympic Movement. It ensures that the whole world can come together at the Games. It helps to offer athletes from all 206 NOCs an equal opportunity to train and qualify for the Olympic Games. Through this model, the Olympic Games can also continue to be a platform for a wide range of sports.”

Read this: Rule yourself | IOC marketing restrictions risk death by a thousand cuts

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