The Value Of Simone Biles – An Update On Athlete Endorsements, The Olympics And Rule 40

With Simone Biles winning five more gold medals at the recent World Gymnastics Championships it appears that only injury can prevent her from being the star of Tokyo 2020.

However, her ability to benefit commercially from her talent and success may have been significantly enhanced by another development announced days earlier.

On 8 October 2019, the US Olympic and Paralympic Committee (USOPC) released updated guidance for its athletes regarding personal endorsements and marketing during the upcoming Tokyo 2020 games.

This follows wider changes to the rules surrounding athlete marketing and the Olympics. A summary of recent developments is set out below.

Background

Until June this year, the International Olympic Committee (IOC) had imposed strict rules on the ability of participants in the Olympics to exploit individual personal endorsements. Rule 40 and bye law 3 of the Olympic Charter (which entrants must adhere to as a condition of participation) provided that except as permitted by the IOC, an Olympic athlete may not 'allow his person, name, picture or sports performances to be used for advertising purposes during the Olympic Games'.

The purpose of Rule 40 is to uphold the 'solidarity model' of the Games, whereby official top-tier sponsors of the Games are protected and the revenue generated from such sponsors is reinvested by the IOC through national associations back into funding the sports, providing pathways and competitions for future generations of athletes and facilitating participation in the Games.

However, Rule 40 had long been controversial with athletes and was seen by many athlete organisations as unduly limiting the ability of athletes to personally capitalise on the exposure offered by the Games (with the rule applying for a four week period surrounding the Games). Further, contravention of Rule 40 could result in disqualification from the Olympics.

Challenge to Rule 40

Many legal commentators had queried whether Rule 40 would be susceptible to legal challenge, particularly from the perspective of EU competition law as an alleged abuse of dominance contrary to Article 102 of the Treaty on the Functioning of the European Union.

By way of comparison, a complete blackout of personal endorsements during the Olympics goes far beyond the protection afforded under English law for actions such as 'passing off', which may be applicable where a sponsor seeks to imply a false association with the event in question.

The IOC had...