Sport sponsorship is a great platform for brands to get extensive brand exposure without paying for traditional ad space. Sponsorship provides 'free' exposure on TV, online, in written media, as well as the additional less tangible benefits of association with the sports property/person.
Of course sponsorship doesn't come cheap and sports rights holders can charge significant fees which reflect the value they provide - a big part of this being advertising/media value.
We are used to seeing rights holders use every bit of inventory they can to maximise revenues - whether it be a naming rights deal where the name of the sponsor on the stadium lights up the local community, or a formula one car which is plastered with logos. When it comes to broadcasting of sports content though, there is an extra layer of regulation which means a sport can't take advantage of every opportunity... as was illustrated by a decision of Ofcom, the UK's broadcast regulator, issued last month.
The Ofcom Code, which all linear (traditional) broadcasters must comply with, includes rules on commercial references in programmes. These rules are designed to ensure a broadcaster's editorial independence, ensure that it's always clear when something in a programme is paid for advertising content, and to protect the viewer from intrusive commercial references within a programme. It was in relation to the latter, and in particular the rule that commercial references must not be 'unduly prominent', that the broadcaster, HUM Masala, was found to be in breach of by airing live coverage of the Pakistani Super League.
Although HUM Masala wasn't the producer of the PSL coverage, and was airing it live, they were nevertheless found to be in breach as a result of brand logos shown on big TV screens in the studio behind the presenter.
The Ofcom decision explains that this brand exposure for the PSL sponsors must be treated differently to other brand exposure, such as on perimeter boards, team kit or within stadium/league/team names, which is generally allowed within broadcasts. Why? The key factors seem to be that the in-studio TV screens were placed solely for the TV audience, the branding had no editorial relevance or justification and, given the context, was not within the audiences normal expectations.
While apparently accepting that the branding on the studio screens was in breach of the undue prominence rules, HUM Masala argued that they should not be deemed to be in breach due to the live nature of the coverage and them not being the producer. This argument worked for Sky in the F1/Rolex case last year (see my blog on that here), but this time Ofcom said that these factors couldn't relieve the broadcaster of their compliance obligations. As such, this seems to be a move from Ofcom to place greater accountability on broadcasters and reiterates the need for producers to think carefully about commercial branding in sports coverage if the content is to be distributed to the UK.
"Ofcom recognises the challenges faced by broadcasters when transmitting a live third-party feed of a sports event. However, these challenges do not absolve an Ofcom licensee of its responsibilities to ensure that the content it transmits complies with the Code."