IOC marketing rule faces German legal challenge

Germany's Federal Cartel Office said Wednesday it is taking legal action against the German Olympic Sports Federation (DOSB), and indirectly the International Olympic Committee (IOC), over athletes' marketing rights during the Games.

A high-profile case threatens to go to court which would challenge the money-making machine behind the Olympics and the exclusiveness of the IOC, which rakes in billions from advertising and sponsorship.

The issue is over Rule 40.3 of the IOC charter which states "no competitor who participates in the Olympic Games may allow his person, name, picture or sports performances to be used for advertising purposes during the games" apart from by official IOC sponsors.

In effect, the IOC monopolises athletes' marketing rights during an Olympics and the DOSB is being taken to task over the treatment of German athletes.

The IOC could potentially be hit with a domino effect if the DOSB loses its case and other core European markets follow suit.

"If these guidelines are too restrictive in their detail, the athletes and their potential sponsors could be abused and the marketing of the individual restricted," said the statement from Germany's national competition regulator.

So far, the IOC has just said it will "co-operate in co-ordination with the DOSB".

Billions (Shenzhen: 002601.SZ - news) of euros are potentially at stake.

In the last Olympic cycle from 2013 to 2016, a total of 5.5 billion euros ($6.5 million) was made from sponsorship by the IOC.

Of the 30.5 million euros in total revenue made by the DSOB in 2015, six million came from marketing, of which the IOC will claim a fifth.

If the DOSB loses the case in Germany, the IOC could find itself facing similar court battles around the world.

Under the current rules, athletes are not allowed to mention their sponsors during an Olympic Games.

A wrong hashtag or careless retweet on social media mentioning an athlete's sponsor could be disastrous, with disqualification amongst the punishments for rule breakers.

In order to compete at either a Winter or Summer Olympics, participants must recognise the IOC charter as a binding rule, which means they cannot cash in on any success.

Source: AFP