IOC rule change lets athletes promote brands online

TOKYO • Olympians at the recently-concluded Tokyo Games took advantage of a sponsorship rule change that let them capitalise on their social media following to promote items such as sportswear and washing detergent, but agents say the complexity of the new guidelines and continued control by the International Olympic Committee's (IOC) still prevent athletes from fully realising their earning potential.

Athletes had until now been prohibited from engaging in personal sponsor promotion during the Olympics, but a change in 2019 by the IOC to a guideline known as Rule 40 has opened the doors for them to post sponsored content and generate another revenue stream.

That allowed athletes such as Portuguese triple jumper Patricia Mamona to tout cereal made by Nestle and Taiwanese weightlifter Kuo Hsing-chun to promote telco provider Taiwan Mobile on their Instagram accounts.

The rule change underscores the shift that is underway in the power dynamics between Olympic organisers and athletes, with many now developing into global brands with enough clout to challenge the dominance of the IOC - particularly in an age when social media is eclipsing television and other traditional media.

Agents have also long complained that old sponsorship rules concentrate power in the hands of the IOC and prevent revenue from trickling down to athletes, particularly those in sports such as weightlifting and badminton who typically make less money than star golfers and footballers.

The change is "a recognition of the fact that athletes are now a principle source of branding for the Olympics in themselves," said James Walton, head of Deloitte's sports business group in South-east Asia.

Rule 40 was set up initially to avoid ambush marketing - where businesses with no connection to the Games try to associate with the Olympics to gain exposure - and to protect the official sponsors of the Games, according to Bob Dorfman, a sports marketer and creative director at San Francisco-based Baker Street Advertising.

Now, lesser-known brands can take advantage of the Olympics moment to gain visibility. For example, Gap-owned sportswear brand Athleta, which sponsors Simone Biles, expressed support on social media for the United States gymnast after she announced her withdrawal from multiple events - a move that Dorfman and others in the sports industry said would not have been endorsed in previous Olympics.

But some agents believe Rule 40 is not going to be a gold rush for athletes because it is unevenly applied across countries by national Olympic committees, deterring potential sponsors who do not want to navigate the complexity.

"It's demotivated potential sponsors to start working with athletes, we have experienced this on several occasions," said Kim Vanderlinden, co-founder of sports management agency We Are Many in Belgium.

Tight controls still remain on what athletes can post during the Olympics. While they can thank personal sponsors on social media and sign new sponsorship deals during the Games, even in the most relaxed interpretations sponsors and athletes have to register and get permission from national Olympic bodies to post content. But they cannot mention the Olympics, national teams or feature the Olympic rings in their posts, unless the brand is an official sponsor of the Games or national teams.

The limitations of the rule change were particularly conspicuous at a time when athlete followings on social media skyrocketed during the spectator-less Olympics and amid falling TV viewership figures.

Up till last Wednesday, Olympic athletes added a combined 49 million followers on Instagram since the Games began, according to Facebook's CrowdTangle tool.

John Nubani, a sports agent who represents track and field athletes including the US shot put silver medallist Raven Saunders, pointed out the rules were not athlete-friendly. He said Saunders had signed a deal with Reston, Virginia-based government contractor Leidos Holdings, before the Olympics as it wanted to support her advocacy for mental health but "they were pulling their hair out" trying to figure out what kind of press activities they could or could not do during the Olympics.

IOC spokesman Mark Adams said Rule 40 was necessary because the body redistributes 90 per cent of its income to sports and athletes. It is likely there will be a review of the rule process after Tokyo 2020 to see how it has worked and if athletes are happy.

Still, those in the sports business are sceptical that Olympics organisers will ever give athletes the freedom they want to engage in sponsorship activities.

"The IOC will loosen things up a little more each Games but not that much. They're not going to lose the value of these million-dollar official sponsors," said Dorfman.

BLOOMBERG