Athletes‘ Rights: Indentured Servitude in Global Elite Sports – Rule 40 as a Textbook Example – Athletenrechte in 2018 (UPDATE)

Statement by the German Athletes‘ Commission regarding Rule 40

 

Info in English: An extensive article about rule 4O of the Olympic Charta and the decision of the German Cartel Office that changes need to be made to allow athletes to profit from the Games can be read below. The article is written in English and in parts written in note form. It was first published on http://www.derballluegtnicht.com on the 3rd of January 2018.

UPDATE – final decision by the Bundeskartellamt: „German athletes and their sponsors will have considerably enhanced advertising opportunities during the Olympic Games in future. The German Olympic Sports Confederation (Deutscher Olympischer Sportbund, DOSB) and the International Olympic Committee (IOC) committed to the Bundeskartellamt to ease the advertising restrictions pursuant to Rule 40 No. 3 of the Olympic Charta.“

Changes made are:

Press release Bundeskartellamt

Why rule 40 also has to change internationally – you can read in the following article.

Short info in German: Ein ausführlicher Artikel zur Regel 40 des IOC und der Auswirkungen auf die Athleten. Was bringt die Entscheidung des Bundeskartellamts für die Athleten und warum die Diskussion nicht abreißen wird. Der Artikel wird auf Englisch veröffentlicht, da das Interesse im Ausland ähnlich hoch ist und http://www.derballluegtnicht.com Anfragen zu diesem Thema aus dem Ausland erhalten hat.

Global elite sports is currently going through the worst crisis of its’ history. But the current situation can also be seen as a opportunity for organizations to reform themselves or to renew them from the outside. To restore trust in sports federations and associations, changes are necessary to prevent continued exploitation of athletes, doping, corruption, bribery, fraud, sexual harassment to finally make federations more transparent. How is change possible?

Federations like FIFA, IOC, IAAF, NCAA and other international and national sports players generate millions of dollars for their enterprises. Although there is a huge investment of capital into elite sports and a noticeable professionalization, many of the expected benefits like: wage increases, (health) insurances, unionization, workers’ protection and investments into education of athletes (dual careers) are still often missing. To some extend similar situations can be found in Olympic, Non-Olympic, Paralympic movements as well as in US-college sports (NCAA).
In all of these cases still the weakest component is the athlete – the source of each performance. Sports organizations/ federations are powerful entities and are often independent from national regulation and control.

In many cases the gap between the revenue generated by the federations and what athletes receive has only increased. Although elite sports has changed on many levels, the situation of the athletes in many sports federations is grotesquely similar to the days when most athletes started their sports careers. In fact, the biggest differences for athletes nowadays, are that they travel more often and further, participate in more sporting events or games, risk more injuries, and have less possibilities in terms of pursuing a vocational training/ education or dual career (Zirin, 2017). So athletes can be seen as indentured servants of these entities, who signed a contract with the IOC, NOC or the NCAA by which they agreed to work for a certain number of months or years in exchange for transportation to the venues, training facilities and dorms and, once they arrived, food, clothing (in case of the Olympics – the clothes of their NOC’s supplier; in case of the NCAA- clothes of the Athletic Department’s supplier), and shelter (Olympic village / dorms). Many associations and their officials seem to be profit-grabbing cartels that with the help of rules like IOC’s Rule 40 or the NCAA’s Restitution Rule keep the athletes in a position of indentured servitude. Athletes have to start to examine the organizational and business side of their respective sports – for example from the revenues they generate through merchandise, audience, social media and TV deals.

Federations like the NCAA or the IOC are the lone governing bodies: They write the rules, decide on the athletes’ fate, on their suspensions, financial support and on sponsorship deals. They have a clear monopoly, over the years they have built a monocracy. If we have a look at the money distribution of the IOC for example, it becomes obvious that especially federations and their officials profit.

Especially on a national level the cash flow is hard to track. 206 National Olympic Committees and 35 International Federation get about 520 Million dollars each.
USOC for example pays its CEO 1 million dollars, has 600 employees, with 14 other executives that make 200.000 $ or much each, 121 employees with 100.000 $ or more each (Hobson, 2017). In comparison to that the average track and field athlete in the US receives 17.000 $, in Germany it is even far less. It becomes obvious that the athletes are not at the forefront of the policies. The numbers in the NCAA are even worse. The structures in sports are not athlete centric. There is nothing inherently wrong with the IOC, NOCs or an international federation making a huge amount of money, but there is something troubling about a sport enterprise/ organization, where the athlete is not paid at all. At the bottom of “the Olympic Movement” or Intercollegiate Athletics are the hard working semi-professional athletes, who only receive the last crumbs of the pie.
An athlete has to choose either abiding by the rules of the NOCs, IOC or NCAA, or having their fundamental rights upheld, until today most elite athletes have chosen to except the rules of elite sports, although some of these rules clearly violate their human rights.

Rule 40
Rule 40 is one typical example. It is the most important tool to retain and control the revenue flow. Rule 40 is designed to protect the rights of Olympic exclusive sponsors by limiting what the athletes, and non-Olympic partners, can do and say.
The general principle of Rule 40 is to prevent the impression of a commercial connection between any Non-Olympic partner and the Olympic Enterprise.
Only official sponsors are allowed to use the official trademarks and trademarked Olympic terms, phrases, and images in their advertising. For smaller often regional or national companies that are not official Olympic partners, terms and phrases like „Tokyo 2020“, “Olympic Gold medalist,” “Tokyo,” “Gold,” or “Games,” will be banned. For the last Olympic Games in Rio more than 200 trademarks can be found on the US trademark Electronic Search (United Patent and Trademark Office, 2017).
If you have a look at the official document, the justification for Rule 40 by the IOC is at least I would call interesting.

pdf Rule_40-Rio_2016-QA_for_Athletes

It is suppose to prevent over-commercialism and wants the focus to remain on the athlete’s performance.

 

Black Out or Frozen Period

During the so-called blackout or frozen period of Rule40 nearly a month long ( starts 9 days before the Opening Ceremony), prohibits Non-Olympic sponsors, some of which support their athletes for years and also at the Games and are most of the times regional sponsors, to communicate with the athletes and wish them luck or congratulate them on social media. Also the athletes cannot thank their sponsors; this includes any kind of digital or print campaign (Bergensen, 2016).

Many German athletes were and are enraged that also the update of Rule 40 restricts business opportunities of athletes. The update “allows” non-Olympic sponsors to create ad campaigns (for review and approval by the IOC and NOC 6 months before the Games), but it also dictates even stricter limitations during the blackout period.

Radio Interview Sven Knipphals (in German, Deutschlandfunk, 2017)

What are the consequences for the athletes?

The rule is actually not a big deal for superstars like Michael Phelps or Steph Curry and their official sponsor Under Armour, because everybody knows what their commercials are about, even when the Olympics are not mentioned in any way.

But for athletes like Son Rui Yung, a marathon runner from Singapore, who is not in the public eye every day, the difference is huge, many spectators are not able to connect the dots in the same way. Mentioning the Olympics or other international events directly would give him more public exposure and equity.
Often local and private sponsors don’t see any kind of return for their sponsorships, it will be difficult for athletes to find sponsors. You can get the impression that Rule 40 is a insurmountable barrier that was erected by design to keep athletes indentured.

German Cartel Office decides in favor of German athletes

Germany’s national competition regulator (Bundeskartellamt/ German Federal Cartel Office) has conducted “antitrust proceedings” against the IOC, inducing changes over rule 40 of the Olympic Charter. At the end of 2017 the German Cartel Office decided that Rule 40 imposes illegal obligations on German athletes. Andreas Mundt, president of ther German Federal Cartel Office: “According to our assessment the rules of DOSB and IOC are too restrictive. The advertising restrictions on athletes and companies can constitute an abuse of the dominant position of DOSB and IOC. Account has to be taken of the fact that the athletes as the performers in the Olympic Games do not benefit directly from the very high advertising revenues generated by the official Olympic sponsors. In response to our concerns about competition DOSB and IOC have proposed amendments to their rules which offer more scope for action. We will now present these commitments to various companies, associations and also athletes for their comments. Nevertheless, the revised DOSB rules can be provisionally used in the run up to the coming Winter Games in Pyeongchang.“ (Bundeskartellamt, 2017).

The German Olympic Committee (DOSB) and the IOC are forced by the German Cartel Office to change Rule 40 in favor of the athletes, but only for German athletes („DOSB and IOC offered to loosen the previous restrictions on advertising activities exclusively targeted at Germany“ (Bundeskartellamt,2017)). The German NOC has promised to make these changes immediately. But how do these changes look like? How far do these changes go? Can they be an example for other NOCs as well? The fight in global elite sports is not over yet.

Changes in Germany will be:

• The standard for advertising measures will be the Olympiaschutzgesetz (Olympic Protection Act) and the case law of the German Federal Court of Justice. The IOC Guidelines on Rule 40 will be, insofar, limited in their application;
• the rules for the approval of applications will be amended. The deadline will be significantly reduced and will not constitute a cut-off period. Additionally, the rules foresee an assumption of approval;
• the notions of “Olympic” and other Olympic related terms will be defined conclusively and in a much narrower way;
• generic advertising, as well as greetings or congratulatory messages from the sponsors to athletes will be also permitted during the „frozen period“ under certain conditions;
• according to the proposed commitments, athletes will be able to share or retweet content from the IOC / OCOG / DOSB / Team Germany and also link it with greetings or acknowledgments to the sponsors“ (Bundeskartellamt, 2017).

„The Bundeskartellamt will carry out a market test on the proposed commitments by means of surveys addressed to associations, athletes and sponsors (especially the sporting goods industry). The changes in the new 2016 DOSB Guidelines are subject to the outcome of the market test and are, therefore, provisional. However, as the revised rules are advantageous and less restrictive for athletes and sponsors and the Winter Games in Pyeongchang in February 2018 are approaching, they shall be used instead of the previous ones “ (Bundeskartellamt, 2017). It will be interesting to see how these changes will be made in practice. German athletes should stay cautious regarding their individual business rights.

How can athletes rights be achieved?
1. Nearly all of the legal docs impose inconvenient obligations on athletes. None of these documents guarantee their fundamental human rights! The athletes are servants in an international monopoly of sports federations. So on the one hand a declaration of athletes rights would give international sports federations a clear image boost. On the other hand such a declaration would secure human rights standards, and where these are violated, athletes can access legal assistance (for a great infographic check Uni Global, 2017).

2. Athletes are involved at all levels of sports, worldwide. They know the system inside out. They have a large interest in good governance and dialogue. But the athletes‘ influence on strategic and sports specific decisions or reforms is often remote. In many federations and associations the athletes’ voice is non-existent.
Until today most committees and counsils or boards both nationally and internationally have a small number, sometimes only one single athlete (like in Germany), representing the athletes’ interests. Athletes struggle to organize themselves, to have their own voice. Additionally in many cases the athletes’ voice is not independent and very small. In many countries like Germany they don’t have a financially independent athletes’ commission. They depend on the financial support of their association – a conflict of interest. Therefore these athletes don’t have enough voting power to influence decisions. Silke Kassner described these problems at the Play the Game Conference 2017 in Eindhoven.

As long as national and especially international committee and federations can do what they want, nothing will change. Athletes should have the power to influence elections and removals of members of Committees and Councils.
Therefore only a fair balance between officials and athletes or athlete representatives can change these structures. Such a power rebalancing would restore the athletes’ responsibilities and and would make the federation’s decision also their own.

3. Federations like The IOC or NCAA shouldn’t be the exclusive holders of marketing rights. By allowing athletes to have local sponsors or personal sponsors on a national level, many athletes would be able to prepare for elite sports events professionally, get the much needed financial support as well as medical support and coverage. Thus the IOC and the Olympics wouldn’t lose their exclusiveness.

4. Many governing bodies are abusing their dominant position over the athletes by restricting the professional opportunities of athletes by using certain rules or bylaws. The European Commission has struck down the federations power to forbid athletes from taking part in private or commercial events (the ISU case – The EU ruled in favor of the athletes).

And the German Federal Cartel Office has brought changes to Rule 40 because it violates business opportunities of athletes.

5. The most powerful option for athletes is the establishment of unions.
Unions in each individual sports on a national level are not unrealistic anymore. On a national level employees are protected by labour law. They have the right to organize and collectively bargain. Sports organizations on the other hand are cartels or monopolies subject to competition and anti-trust laws, it might give the athletes the much needed power to put a lid on the officials power and control.
Germany’s athletes commission has launched a „Verein – Athleten Deutschland“ (club) to represent the interests of the German athletes – But most importantly it is hopefully established to take an objective, to have an own view. To this day the Charter of the Athletes’ Commission of the German Olympic Committee (DOSB), says that the commission’s role is to “advise” the executives of the DOSB.
The move was long overdue and a necessary step into the right direction. The new „Verein“ will support athletes reading legal matters, financial support, dual careers, conflicts with federations and much more. Hopefully this is just a start and one day different German sports union(s) will arise.
The antitrust probes in Brussels and Berlin ruled in favor of the athletes, so some change is going to come. Officials have to make concessions regarding the athletes’ influence; If they don’t, they may lose their unique position via court rulings.
To have a checks and balances, athletes should either get a fair share of the seats in all committees, boards or councils or should be able to name representatives/ spokespersons for these positions. A fixed quota (close to 50%) would revolutionize the system. Athletes would be able to monitor the action of their federations and would have to chance for debate, calling decisions also their own. The future of elite sports and its athletes, even a few years from now, is unclear; the struggle to establish independent athletes’ commissions and unions will be in the spotlight.

 

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