Olympic sponsorship model sometimes hurts athletes

The Olympic sponsorship status quo is being challenged in the U.S. and the Canadian marketplace might want to take notice.

Nick Symmonds, an American 800-metre runner, made headlines last summer when he was left off the U.S. track and field (USATF) team for the Beijing worlds for refusing to sign a "Statement of Conditions" document. The contract required athletes on Team USA to wear Nike gear since that is the official sponsor of the track team. Symmonds, who is sponsored by Brooks, disagreed with those conditions.

Now, Symmonds is involved in a lawsuit through his company Run Gum, taking on USATF and the U.S. Olympic Committee (USOC). The case exposes the constant tension between sponsorship rights of sport governing bodies and those of individual athletes. Once the dust settles, this competition law complaint may even effect sponsorship in Canada.

The next step in Symmonds' track career is to qualify for Rio, through the U.S. Olympic Trials. That meet is an event run by the USATF under the umbrella of the USOC. It's branded as an Olympic event with U.S. Olympic sponsors. 

Similar to the Olympic Games, during races at the Trials, individual athletes have restrictions on what sponsors they can wear and display. 

The restrictions are the source of the contention.  When a track athlete competes in other USATF events, they are allowed to freely display sponsors outside of the apparel and equipment categories. 

Symmonds, through his company Run Gum, claims the restrictions implemented by USATF, as part of an agreement with the USOC to run the Olympic Trials, runs counter to the Sherman Antitrust Act (the U.S. equivalent of the Competition Act in Canada). He argues that it unfairly restricts potential sponsors from dealing with individual athletes. It alleges the restriction de-values the athlete's sponsorship deal because of the limited pool of sponsors.

Creating a restricted sponsorship zone is essential to Olympic business. If a brand pays the price to become associated with the Olympics, they demand exclusivity. But athletes need to be able to sell themselves effectively on a free market to maximize the value in their personal brand. Remember, gone are the days of Olympic athletes being amateurs and realistically, the spotlight on each athlete is time sensitive.

So why does this all matter?

The USOC has expanded its brand presence domestically by selling the Olympic Trials as an Olympic-type event. The Olympic Trials generate broadcast rights revenue for the USOC and the governing sport body and additionally, allow USOC sponsors additional opportunities with athletes outside the framework of the Olympic Games. 

The competitions, however, are a glorified national event that just happen to have Olympic berths on the line. Under any other circumstance the athlete wouldn't have to abide by the restrictive language contained in Rule 50 of the Olympic Charter. Effectively, the USOC is expanding its brand presence into domestic events to raise profile and greater sponsorship revenue, while at the same time, suppressing the athlete's individual commercial rights.

Here at home, the Canadian Olympic Committee (COC) is familiar with this model. With swimming on board, the COC has pushed hard for more sports to choose their Olympic team by hosting an "Olympic Trials". Similar to the USOC, the COC uses the event to showcase its sponsors alongside Swimming Canada's sponsors, branding the event under the Olympic umbrella. 

No doubt, it is more enticing for broadcasters and certainly easier for the average fan to understand in comparison to the current Olympic selection process in most of Canada's sports. 

If Run Gum is successful, the U.S. domestic value in the Olympic Trial brand will be jeopardized by sponsors looking to associate and activate with individuals. It essentially allows more brands to piggyback on the value associated with the Olympic brand.

It also matters because, if successful, the precedent may make its way to Canada. 

Canada currently differentiates itself from U.S. antitrust law by including an exemption for amateur sport within The Competition Act. This definition however, describes amateur sport as sport where the participants receive no remuneration for their services as participants. Clearly, with athletes generating income through multiple sources, Olympic sport would have a difficult time relying on this exemption going forward.