You gotta fight, for your right... to sell stuff?
Rule 40, logo restrictions, and who owns the space on an athlete's body
It’s that magical time again. That moment once every four (or five) years when the summer sport athletes gather from all over the world for one shared and special purpose: complaining about Rule 40.
If you are not extremely plugged into the world of online track commentary, you may be unfamiliar with this infamous restriction. Like “Catch-22” or “Order 66” it is a maddening injustice with a number in its name and it governs how Olympic athletes can interact with their sponsors (and vice a versa) during the Olympics. Rule 40 is a cause célèbre for athletes and their advocates, but while it may be uniquely restrictive, it is not unique in its general form. Indeed, it exposes a general axis of conflict between athletes and event organizers over a subtle, but extremely important question: who gets to sell advertising space and where? It’s a battle over who is allowed to extract the economic benefits from a competition’s “brand value” and it is a battle that track and field athletes have traditionally lost. But hope may be on the horizon!
Rule 40: A quick primer
Chris Chavez wrote a great article explaining Rule 40 in 2016 for SI and this article from Jia Jung in Swimming World Magazine explains some of the updates for the 2021 Games. You can check those out if you want a little more detailed history. The quick version is that Rule 40 was instituted in 1991 and decreed that non-official sponsors (that is, companies that didn’t pay the IOC money) could not run ads featuring Olympic symbols OR Olympic athletes during the Olympic blackout period. Athletes could also not mention personal sponsors publicly during the blackout.
Social media eroded this power, because 1) it became extremely conspicuous/ridiculous that athletes could not mention their sponsors in a venue where they were in the habit of constantly mentioning their sponsors and 2) it gave everyone a venue to gather ‘round and get very upset together. The incident mentioned in Chavez’ piece where Oiselle was made to take down a post congratulating Kate Grace with the caption “She’s going to RIO!” was not possible in the world before social media and social media gives us all a place to talk about how insane of a ruling that is.
The result of all this is that the rules have been somewhat relaxed so that now athletes can appear in generic commercials and can make reference to their sponsors on social media with certain restrictions. Again, our guy Chris has the info:
So, score one for Twitter! Never let anyone tell you being mad online can’t change the world.
I still think that people find restrictions on what athletes can say on their own social media pages per se ridiculous and I expect that the pressure for change will not stop here.
Why tho?
In the above articles you will find the IOC/USOC giving two reasons for why Rule 40 is necessary. The first, is “to preserve the unique nature of the Olympic games by preventing over-commercialization” which is the kind of transparently BS answer you give when you run an organization that is ostensibly not-for-profit and yet swims in oceans of cash1. The second is “to preserve sources of funding.” If I may quote one of the most entertainingly perverse movie villains to ever grace the screen: that’s a bingo!
The idea here is fairly simple and has applications far beyond Rule 40. Begin with the thought that an event has a certain amount of “brand value” that can be conferred to sponsors. The sponsors either use the iconography of the event in their ads or directly buy space on the broadcasts or within the event locations themselves. I assume everyone is familiar with the concept. Now some of this “brand value” is inherent to the event itself and some it is created by the athletes who participate in the event and bring their own fans in. You could spend a lot of time arguing for each sport and event the exact mix of how much value is generated by the event and conferred to the participating athletes and how much is generated by the athletes and conferred to the event. It’d be a fun debate for a particularly quarrelsome and pedantic group of people because there’s really no way to prove anything one way or the other. It’d probably generate 300 texts in my group chat in a few hours2.
But who actually creates the brand is less real and less important than the question of who gets to sell the rights to it. The IOC’s idea is that if you want in on the Olympic brand and the exposure it generates, you have to pay them. It’s worth more to be an exclusive Olympics sponsor than to have to contend for attention with all the athletes’ individual sponsors, so the IOC bans the participation of those other sponsors and collects more money for itself. The party that is obviously harmed is the athletes.
It’s happening all around us
The IOC is not the first organization to realize that it can make more sponsorship money by clearing the decks of competitors and offering exclusive rights. The NFL is also a fairly aggressive actor in this space. That’s why you’ll hear lots of commercials prompting you to buy a new TV for “The Big Game” come January and February: the NFL will sue you if you say “Super Bowl” without paying for the privilege. There was also a controversy a while back about players no longer being able to wear Beats headphones during post-game press conferences because the NFL had signed a deal with Bose. The NFL was making a claim that they, not the athletes, own that space and only they have the property rights to sell it to a third party. At press conferences in other sports you might notice cups branded with certain sports drink logos. I imagine athletes would get in trouble if they brought their own sponsors’ drink bottle into that space.
Now maybe you think that the IOC and the NFL are so egregious in their strong arm tactics because they are run by worse and more selfish people than other sports organizations. Maybe so, but I would attribute it more to the power dynamic between the organization and the athletes. The Olympics are extremely well known, most Olympians are not. The NFL is the most popular league in the US, has only one international competitor, and while it generates some massive stars, most of the players are fairly anonymous. The NBA, on the other hand, can’t be quite as aggressive in its tactics because while it is less popular than the NFL, its stars are more famous and powerful than NFL stars. When organizations can get one over on their athletes, they generally do. This is why fan reaction to the Olympics’ restrictions really is powerful. If the IOC is perceived as being too cutthroat in asserting control over athletes’ economic opportunities, there might be a public backlash that filters back on their official sponsors. You can’t sell the warm feelings your brand generates if everyone hates you!
Whether sports are governed by principles or opportunity, athletes are constantly in a tussle with event organizers for the rights to sell off the value created by sporting events. Often they are fighting for the right to sell space on their own bodies.
Uniform Rules and Logo Restrictions
I had a whole section about how World Athletics’ uniform restrictions were another sub-category of this battle which mostly just repeated the arguments from above, but they say a picture is worth a thousand words and this is a pretty illustrative picture:
Athlete sponsor logos are currently restricted to 40cm2 in size, whereas there is apparently no legal limit to how big they can make those bibs3! Of course the key difference is that the athlete (or in the case of the team kit, the federation) gets to sell the uniform space while the meet gets to sell the bib space. This is how you end up with a situation in which the bibs are bigger than many of the women’s tops and the meet sponsor logo gets more space on an athlete’s body than the athlete’s sponsor. I never thought about the importance of the bib space to meets until I turned pro and every big, sponsored meet made a big deal about not folding, cutting, or crumbling the bib in any way. It seemed odd to me given that had never been a problem at, say, the NCAA Championships. Then I realized the meets only cared when they had ads to protect.
(A random aside here: World Athletics has a lot of rules but relies on the meets themselves to enforce them. The meets, in turn, tend to rely on volunteers. Thus you end up with some inconsistent and overly-strict applications of the rules. The race, after all, only cares that it doesn’t get in trouble with World Athletics. If anything, an athlete’s sponsor is a competitor! At one major road race I ran, there was a pretty extensive uniform check the night before where they had volunteers measuring logo sizes. This is a bit redundant imo since every major company makes their professional kits to comply with the logo restrictions. But nevertheless, they soldiered on with their rulers and their calculators. The only issue was they were not particularly good at geometry and could only seem to fathom calculating the area of rectangles. The Adidas logo was in the shape of a triangle. The area of a rectangle is height x width whereas the area of a triangle is ½ x height x width. You see where this is going. Every Adidas athlete had their shorts taped over for supposedly falling afoul of uniform violations. Track, it’s great fun!)
Things are getting better!
Now when I set out to write the previous section, I was going to include the long held complaint that athlete’s can only have one sponsor on their kits. Turns out that when I went to check the rules (I am very diligent, you see) that is no longer true. Who knew! From the World Athletics regulations on marketing and advertisement:
Sure enough, here’s a picture of Karsten Warholm rocking THREE sponsors on his kit:
Not even Super Agent Dan Lilot could explain to me why or when this rule was changed, so I am assume that - like the identity and motives of the builders of Stonehenge - the information is lost forever in the sands of time. Surely the tweets had something to do with it!
One other thing to note about these logo restrictions is that the IOC rules are more restrictive than the World Athletics rules, and the US Olympic Trials are governed by the IOC rules. So the IOC limits athletes to the manufacturer’s logo and limits that logo to 30cm2. Curious, I busted out the ol’ ruler on my BTC kit and, sure enough, the swoosh dimensions fit in the IOC’s smaller size limit. If the manufacturers aren’t willing to make multiple versions of a kit to give their own brand a little extra promotion, changes to World Athletics’ rules might not have a huge effect unless matched by a change in IOC rules.
I hope you will also note that this fact pattern fits the power differential idea from above. The IOC has greater status than World Athletics and thus imposes stricter limitations.
My usual pessimism and some cautious optimism
Much has been made over the years about the potential for athletes to have multiple sponsors on their uniforms and how that will boost their incomes and even the profile of the sport. I’ll say more on the broader effects below. As to boosting athletes’ incomes, I am not super hopeful that this is going to have a big impact. The primary sponsors of athletes are the brands that make the uniform. They do not want to share space on that uniform with another brand and will likely either prohibit that outright if they can, or allow it in exchange for a lower salary. Very, very few athletes have real bargaining power with the shoe companies and they have even less if they want to go to a company sponsored coach, as is increasingly the model in the US. It tends to be very much a “take it or leave it” situation and I don’t imagine a second sponsor slot will soon be a part of standard deal on offer.
Those athletes that can get a second (or third) sponsor negotiated will tend to be athletes with the highest profile, the most bargaining power, and the highest present salaries. That’s great for them, but when people talk about athletes struggling to stay in the sport, it is not those people that they are talking about. Since almost all track contracts are, in essence, marketing contracts, salaries are highly stratified. The most famous athletes make very healthy sums of money while many athletes racing the Olympic Trials make virtually nothing. High inequality in marketing income is not unique to track. Lebron James’ Nike deal is rumored at $1 billion over his lifetime, while many NBA players have no sponsorship money to speak of. The salaries from the teams are more equal, but that is because maximum and minimum salaries are negotiated as a part of the collective bargaining agreement. Plus, a player can contribute to winning without being high profile enough to sell shoes. In track and field, all the value is marketing.
One possible avenue to more widely shared spoils is the club/training group system. I don’t know how all the professional groups are set up, but I know that at least some of them are not directly owned by the shoe companies that sponsor them. While any individual athlete might not have the bargaining power to get other sponsors cleared for their uniform, the top training groups probably do. The best coaches provide a lot of value to their sponsor companies, not just by shepherding their talent, but by attracting athletes to their group. Some athletes will accept a lower salary to go with the coach they want and then if they have massive success, the company will likely be able to underpay them relative to market value on the second contract because just after a major accomplishment is pretty much the last time people want to switch coaches. A top coach is thus worth a lot and could use that leverage to get more uniform sponsors for their club. If that money supplemented athletes’ salaries they could attract even more talent and force other companies to follow suit in order to stay competitive.
NN Running Team proves that it is possible for a group with enough clout to negotiate this sort of deal and I would like to see a US team take a crack at it. While I think there are good economic reasons why it will be tough for athletes to negotiate the right to have more sponsors on their uniforms, there are probably also more prosaic reasons like, “this is just not done”. If a few top athletes and top teams can change that perception and establish a new paradigm, the floodgates might open.
Jos Hermans’ NN Running Team shows it’s possible for strong groups to negotiate special carve-outs from shoe companies
Will this affect The Sport?
Now in the great Coasean Bargain of life, I will always be on the side of the athletes. The greater percentage of advertising revenue captured by the athletes, the happier (and, ideally, wealthier) I will be. I am very much in favor of athlete’s having more sponsorship opportunities and streams of revenue. In advocating for athletes’ interests, however, I think some people fall into a kind of wish-casting, wherein opening up more of the kit for athlete sponsors will make the sport more popular. Nick Symmonds’ “I'm Tired of USATF and IAAF Crippling Our Sport” is the pinnacle of the form, although I have seen the argument made elsewhere. The logic basically goes that if sponsors can get their logo on athlete’s uniforms they will be more willing to sponsor them and thus become a stakeholder in the sport. They will then promote the athlete by including them in advertisements which will raise the profile of the sport and make it more popular. I hesitate to argue against this because it is good politics to argue that something that is good for you personally is actually good for a broader cause (see the IOC’s “over-commercialization” argument from above). “Save The Sport” is a better rallying cry than, “Give Me More Money!”
Unfortunately, I don’t think this argument is true and I don’t think it’s true in a specific way that ties into the themes I’ve talked about since my first post. For one, it’s not like sponsors are cut out of the sport. As we discussed above, the goal of these restrictions isn’t to drive sponsors away, it’s to make the sponsors pay the events and umbrella organizations instead of the athletes. If sponsors think track and field is a good investment, they can pay for title or event sponsorship at any number of meets. Many do. What they don’t do is run ads that highlight those meets. They run ads that highlight themselves! The meet is the ad. Toyota, for instance, is a USATF sponsor and presumably they would get more value from that USATF sponsorship if track got really popular. Yet I don’t think I’ve ever seen a Toyota ad mention track and field. And why would it! Toyota pays USATF to sell Toyotas to track fans, not to sell track to Toyota fans. Every ad is competing in a fierce battle for your attention and a spokesperson is supposed to help them win that battle. That logic works in reverse if you have to use some of your ad time explaining who this person is and why you should care. Many athletes are presently sponsored by brands that they can’t wear on their kit. How many times have you seen them in a commercial for the brand? How many of those commercials have been outside of track broadcasts?
I say this ties into the themes of my first couple posts because one basic point I’ve hinted at, but didn’t state so explicitly, is that when analyzing “what’s wrong with The Sport” many people get causation reversed. Sponsorship dollars, TV viewers, gambling interest, etc don’t create a healthy sport, they are symptoms of one! Sponsorships don’t create fame, they follow it. I would love for there to be One Easy Trick we could employ to make track more popular. I would love it even more if that trick were for companies to pay me more money. Ultimately, however, the only way to bring more fans into the sport is to create compelling competitions. That is the wellspring from which all other good things flow.
See also: The NCAA
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World Athletics has a stake in this since they sell the bib space at their meets.