Sponsorship Issues: Are Recent Government Moves Protection Or Interference?

IEG – Sponsorship.com
Posted: 2/27/2012 10:43:59 AM 
by Jim Andrews

Two developments within the last month raise some fascinating questions over the involvement of government in the affairs of private rightsholders and their partnerships.

I have to thank Bill Cooper of Twentyten Group in Vancouver for alerting me and other members of IEG’s LinkedIn community to both of these news items. Bill will be leading a discussion on “Protecting Sponsors’ Rights: Managing Expectations and Fulfilling Obligations” at IEG’s annual conference in three weeks.

The first story involves the Sundance Film Festival. Officials in Park City and Summit County, Utah in late January approved the development of a movie studio in Park City, the mountain town that is home to the Sundance Institute and its world-renowned event. The city included in its agreement with Raleigh Studios that the owners and developers are prohibited from allowing their property to be used to promote any companies that are not official Sundance sponsors.

Government protection of a rightsholder and its partners from ambush can certainly be viewed as a victory for sponsorship. As Bill pointed out in a LinkedIn discussion: “This is a good reminder to invest in good stewardship of a property’s host community and government partners. If they are fully invested and authentic partners to the event, extraordinary benefits can result that in turn help a property to deliver on obligations to other partners.”

That is no doubt true, but I have mixed feelings regarding the city’s action here. On one hand, as an advocate for rightsholders, I’m heartened by Park City’s recognition of the importance of the festival. On the other hand, I take issue with government giving an advantage to one private group by restricting the otherwise legal activity of another. If I were the landowner investing a no doubt large sum to develop this property, I would fight this restriction. I’m not a big fan of ambush marketing, but I’m also not in favor of outlawing it.

Bill went on to add, “It is certainly interesting to see protection go this far and generally speaking I see a trend of going beyond the protection of exclusive rights to associate with a property and a move towards preventing adjacent business activity which I am not sure is all good. But in this case it seems like the protective measures are mapped out early and adjacent businesses are being given early advance notice of the parameters necessary for the festival to be successful. This scenario seems eminently better than those whereby businesses adjacent to major events are given little to no warning of by-law amendments that impact their normal course of business.”

The other news story comes from Canada, where the Canadian Radio-television and Telecommunications Commission ruled that Bell Canada parent BCE’s deals to provide NHL and NFL broadcasts exclusively to its own wireless subscribers give the company an unfair advantage. The CRTC ordered BCE to make the content available to rival Telus Corp. “at reasonable terms.”

Bill posted this response to the IEG community: ‘I feel the original CRTC ruling was too much meddling in an industry for which exclusivity of rights is a fairly critical ingredient to its financial health. In my mind the CRTC’s position on forced sharing of rights would be akin to forcing a newspaper to give its competitor its best columnist’s content to prevent any so-called unfair advantage created by having secured superior content. To continue down this path subverts competition on a content acquisition level while clumsily trying to protect competition at the consumer level.”

I wholeheartedly agree. What the CRTC seems to forget is that the true owners of the content are the leagues, not BCE or any other broadcaster/distributor. It would be very interesting to see what would happen if the NFL or NHL simply refused to offer its content for mobile distribution in Canada unless it could do so exclusively.