In May, Joy Tomkins knit a tiny white T-shirt and shorts for a doll she hoped might fetch a pound at a fundraiser in Downham Market, the town where she lives a couple hours’ drive north of London. “It looked very dour,” says the 81-year-old grandmother. So in honor of her country hosting this summer’s Olympic Games, Tomkins spruced up the outfit by embroidering it with “GB 2012” and the five rings. Then she heard on the radio that shopkeepers who put Olympic symbols in their windows were being asked to take them down. Tomkins called Trading Standards, the government agency that enforces commerce laws, and says she was warned that selling her smartly dressed doll for charity would be against the law. “The young man was fairly sad and sorry,” she remembers.
Photograph by Jon Stanley Austin for Bloomberg BusinessweekJoy Tomkins
With the London Games now six weeks away, Tomkins is one of many in the U.K. discovering how carefully the Olympics’ organizers guard their brand. There’s the florist in Stoke-on-Trent who told the Daily Mail she was asked to remove the tissue paper rings from her shop window along the torch route or risk legal action, and the coffee shop in East London that scrubbed the “O” from its sign to become Cafe Lympic after officials warned the owner he could be sued.
Then there’s Dennis Spurr, a butcher in Dorset, near where the sailing events will be held. Six years ago he put a sign outside his shop depicting the Olympic rings as sausage links. For 18 months, he says, nobody bothered him about it. “And then one day an official come along from the Olympics [and asked], ‘Have you had permission?’” Spurr replied he didn’t know he needed it. “Oh yeah,” he says the man told him. “You’ll get in a lot of trouble unless you take them down.”
Photograph by Jon Stanley Austin for Bloomberg BusinessweekSix years ago, Dennis Spurr put a sign outside his butcher shop in Dorset depicting the Olympic rings as sausage links.
British shop owners excited to show their Olympic spirit shouldn’t feel singled out. Back in 1994 the U.S. Olympic Committee demanded a name change at the 10-table Olympic Restaurant in New York. Restaurants and pizzerias from Sydney to Vancouver suffered the same treatment. The USOC even tried to keep the 149-year-old Olympian newspaper in Olympia, Wash., from trademarking its own name.
To understand why the Olympics goes after businesses so aggressively, you need to go back to the 1988 Games. Before then, hundreds of companies signed Olympic marketing deals in every country where they wanted to advertise. That branding muddle frustrated global companies such as Coca-Cola (KO). So the International Olympic Committee created a worldwide sponsorship program, a one-stop shop for rights to Olympic logos and symbols. (Eleven companies, including Coca-Cola, McDonald’s (MCD), and Visa (V), together shelled out a billion dollars to call themselves global sponsors at the 2010 Games in Vancouver, and in London.)
This exclusive club created a new problem: the unofficial sponsor. American Express (AXP) passed on a chance to become one of the first global sponsors, prompting the IOC to sign up Visa—whose tag line for Seoul and Calgary became “the Olympics don’t take American Express.” Visa’s rival responded by churning out ads that made oblique references to the Games. A campaign for Albertville 1992 encouraged cardholders to “visit the French Alps for all the winter fun and games.”
That tactic became a model for everyone from Schirf Brewing, which declared its brand “The Unofficial Beer, 2002 Winter Games” in Salt Lake City, to Subway, which aired ads with Michael Phelps swimming to “where the action is this winter” during the 2010 events in Vancouver.
To keep the money flowing in from official sponsorships—the IOC’s second-biggest source of revenue behind broadcasting rights —Olympic organizers have to promise to keep competitors from crashing the party. That means getting host countries to play bouncer. “When you bid to host an Olympic Games,” says Simon Chadwick, a professor of sports business at Coventry University in England, “you must, and that’s in capital letters underlined, guarantee to pass legislation outlawing ambush marketing and protecting against any trademark infringement.”
In 2006, the British Parliament passed the London Olympic Games and Paralympic Games Act. The law limits the commercial use of anything that’s “likely to suggest to the public” any official association with the Games. That means the five rings and the phrase “Olympic Games,” which the IOC has long protected. But also the pairing of words such as “medals” and “2012,” “games” and “twenty twelve,” or “bronze” and “Two Thousand and Twelve.” Scofflaws can be fined as much as ?20,000.
Photograph by Jon Stanley Austin for Bloomberg BusinessweekTrademark-infringing doll
Marina Palomba, an attorney for the McCann Worldgroup agency in London, spends a lot of time warning clients that their marketing plans will draw the ire of the Olympics’ lawyers. “It’s the most draconian law so far in advance of an Olympic Games ever,” says Palomba.
The London Organising Committee has also set up “brand exclusion zones” around Olympic sites where non-sponsors won’t be able to advertise or give away freebies, and it will deploy 100 trained “brand protection” volunteers to help the 20-person legal staff monitor the zones. Chadwick, who has catalogued more than 600 cases of ambush marketing during past sporting events, says London police asked to see his database so they’d know what to watch for. (He declined to share.) Palomba says news media who gain access to Olympic venues must agree to turn their cameras away from marketing stunts: “If someone tries to fly over the event in a hot air balloon, the media have been told not to cover it.”
The Committee says in a statement that it prefers “to educate rather than litigate,” but that it has to be vigilant: “In order to stage the Games we had to raise at least ?700 million [$1.1 billion] in sponsorship, and we cannot do that if we do not offer our partners protection.”
For Spurr and his compatriots, outfoxing the Games’ brand police has become something of its own Olympic event. In 2007, in front of BBC TV cameras, the butcher put up a new sausage sign, this time with squares instead of rings and “2013” in place of “2012”—only to hear from Olympic officials again. So he took that display down as well. Two weeks ago, after getting a letter warning him off more stunts, Spurr gave it one more shot. “We’ve got five frying pans up there with smiley faces.”
The bottom line: To mollify official sponsors who put up $1.1 billion, London organizers are coming down on small businesses that display the five rings.
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