Another quarter has passed and also almost another year and we are proud to present and welcome readers to the December 2012 edition (citation: GSLTR2012/4) of our ground-breaking journal and on-line database (www.gsltr.com): Global Sports Law and Taxation Reports (GSLTR).
It has been well said that sponsorship is the bed rock of sports marketing and forms a significant part of the multi-billion dollar global industry of sponsorship in general, which is perceived, in many business quarters, as an attractive alternative to other forms of traditional advertising and promotion This is particularly so in terms of its cost-effectiveness, which is always high on the corporate financial agenda. In the field of sports sponsorship, there is an ever-increasing range of prestigious national and international sports events, sports teams and sports persons available for commercial exploitation. The take up by international companies for this kind of association does not seem to abate, despite the ongoing economic recession, which is still being experienced in many parts of the world.
Following the renewal on 28 September 2012 by Real Madrid FC of its kit sponsorship with Adidas, the German sportswear manufacturer, which is worth € 32 million per year to the football club and will continue to and include the 2019-2020 season, we include a topical feature by Prof. Ian Blackshaw on the subject of sports sponsorship, in which he highlights some of the key legal issues which arise and need to be taken into account when drafting the corresponding agreements.
Whilst on the subject of high profile sports sponsorships, since we last appeared in print, the Lance Armstrong doping affair has surfaced again and hit the sports and general news headlines around the world, focusing, once more, attention on the sport of cycling, which, over the years, has been plagued by doping scandals – some commentators would argue that there is a culture of doping embedded in cycling, although the UCI, the world governing body of cycling has been taking measures to stamp it out. Lance Armstrong has been formally accused in a detailed dossier issued by the United States Doping Agency (USADA) of being, what can only be described, as a serial doper, and has been stripped of his seven Tour de France titles. Needless to say, his major sponsors, including Nike, have cancelled their sponsorship agreements with him and are looking at the possibility of recouping lucrative sponsorship fees paid to him over the years.
Of course, the allegations made against Armstrong by USADA and supported by UCI have not – as yet – been tested in a judicial forum, either in the ordinary courts or the Court of Arbitration for Sport, and the allegations have been consistently denied by Armstrong.
Legally speaking, this is a strange – if not unique – situation. And, of course, Armstrong announced in August that he would no longer be fighting these allegations, but is that tantamount to an admission by him of guilty as charged? I think not and find that hard to accept, because there has been no forensic examination of the allegations and there has been no process of examination and cross examination of Armstrong, his accusers and the witnesses assembled by USADA claiming wrongdoing by him.
The Armstrong affair clearly shows the need to include so-called “morality clauses” in sports sponsorship agreements to deal with such cases if and when they arise! These clauses need to be carefully and objectively drafted and also deal with the financial and other commercial and practical consequences following the termination of these agreements for such causes.
Nike have replaced Armstrong with the world number 1 golfer, Rory Mcllroy, in a US$ 250 million ten-year sponsorship deal!
Another money spinner for sports bodies, sports teams and individuals is the commercialisation of sports TV rights. For example, the English FA Premier League, the most popular and lucrative one in the world, earlier this year sold its live broadcasting rights for the three seasons 2013-2016 for the record sum of £ 3.018 billion! We also include in this issue an article on this important subject with the intriguing title of Access to live sports coverage in the digital media landscape: has media law become redundant?’ by Dr. Katrien Lefever. Having reviewed the situation, she comes to the following conclusion that the jury is still out:
“One should realize that the debate about the selling and exploitation of sports broadcasting rights has not come to an end. In October 2011, the Court of Justice put a (little) bomb under the principle of territorial exclusivity. In June 2012, the Advocate General decided that the limitation of the compensation payable by a television channel for the use of short extracts of high-interest events to the public, such as football matches, is justified. It is now up to the Court of Justice to (not) follow this advice. As you can see: sport and television: “it’s a never ending story”.”
On the legal side, we also feature an article charting the financial and footballing fortunes of a famous Scottish Football Club: Glasgow Rangers, who, since 1872 has won 115 trophies making them the most successful football club in Europe. Between 2001 and 2010, the club won nine league titles in a row. But now, after what can only be described as an annus horribilis, Rangers are again top of their division – not the Scottish Premier League, but the Scottish Third Division. What a let-down and also a remarkable story of football financial mismanagement!
On the tax side, amongst others, we publish articles in our series of tax planning for incoming professional team sport players with contributions this time from Austria and Belgium. We also publish a case note by Dr. Rijkele Betten on an important European Court of Justice preliminary ruling on withholding tax in The Netherlands on the payment of fees to foreign football clubs.
So, consistent with our aims of maintaining the high standard and variety of the articles that we publish, there is much in the December issue of GSLTR to inform and interest sports legal and tax advisers alike and, of course, their clients! Please spread the word about GSLTR amongst your colleagues and contacts and help us to increase our global footprint and go from strength to strength in the New Year and beyond.
Finally, as always, we would welcome your comments and suggestions on our journal and its coverage, which will help us to realise our mission of producing and providing an invaluable and must-have resource for all those involved in the ever-evolving and often intertwined fields of sports law and taxation.
We would also welcome and value your contributions in the form of articles and topical case notes and commentaries, especially for posting on the GSLTR dedicated website at www.gsltr.com.
So, now read on and enjoy the December 2012 edition of GSLTR.
We also take this opportunity of wishing all our readers the compliments of the season and all the best in 2013!
Dr. Rijkele Betten (Managing Editor)
Prof. Ian S. Blackshaw (Consulting Editor)