Friday, 23 June 2017

Axiata Arena : new dawn in Stadium Naming Rights in Malaysia #SportsLaw

       



Alongside the growth of the sports industry in recent times, there has been a trend for corporations and individuals of means to invest in sport stadiums through naming rights, a form of collaboration between two parties resulting in a company name being synonymous with a sporting team for a set period of time in exchange for a financial payment.

England has the 02 Arena while Shanghai has the Mercedes Benz Arena. Now, Malaysia has its very own multi-sport stadium, the Axiata Arena. Axiata Group Berhad has secured the exclusive sponsorship to work jointly with the Malaysia Stadium Corporation (Perbadanan Stadium Malaysia) on the redevelopment, modernisation as well as the rebranding of the Putra Indoor Stadium to Axiata Arena, making a mark in history as Malaysia’s first corporate named stadium.


A 10-year agreement worth RM55 million between the Malaysia Stadium Corporation and Axiata Group Berhad has been reached. The Malaysia Stadium Corporation will continue to be responsible for the maintenance while other upgrades will be to the extent of which Axiata had agreed upon as per the terms and conditions of the agreement.


According to the Youth and Sports Minister Yang Berhormat Khairy Jamaluddin during the Media Launch of Axiata Arena on 16 January 2017, finer details of the agreement are being worked on and YB also hopes that the stadium will have an impact in promoting Kuala Lumpur as a sports hub in the region. He said, “fans can now fully focus on supporting their team and this new development will ensure the ultimate fan experience”.  YB Khairy further added that the Axiata Arena will be the crown-jewel for the redevelopment of Bukit Jalil Sports Complex which will be known as KL Sports City by July 2017. Sports like badminton can be observed in this arena as this venue will be used as the main stadium for various sporting events during the 29th SEA Games and 9th  ASEAN Para games this August. 

Besides adding a nice ring to the refurbished stadium (AA - ‘Axiata Arena’), Axiata Group Berhad is also one of the largest Asian telecommunication companies, operating in Malaysia under the brand name ‘Celcom’, which is no foreign name to Malaysians. As Tan Sri Jamaludin Ibrahim had stated in the recent Axiata Arena press conference, Axiata wishes to “step up further to the next level of branding (as well as) help the government in the area of sports and be a part of the process (to boost Axiata Arena to the international stage)”, on par with world renowned stadiums such as Alliance Stadium in Germany and Etihad Stadium in United Kingdom. Needless to say, brand awareness is particularly important in the competitive telecommunications industry. Axiata will be able to build upon their community image and establish greater local creditability and acceptance as a result of being a party to the first Naming Rights Agreement in Malaysia. This was in fact the main reason for Emirates Airlines’ decision to sponsor Arsenal FC’s stadium back in 2009. The agreement proved to be a good investment when Emirates’ sales sky-rocketed past expectations since the agreement came into effect. Axiata’s representatives also mentioned that the agreement would give them a better presence against their competitors. The Malaysia Stadium Corporation also notes that the Naming Rights Agreement will ensure a stable financial backing for the advancement of Axiata Arena’s facilities in preparation for the SEA Games in August this year.


As with any agreement or contract, the success of the partnership lies not only in headlines and exposure but more importantly, in the details which are considered when drafting the agreement itself. This is where lawyers go through lengthy discussions and negotiations until a final agreement with terms which are favourable to both parties is achieved.

Based on the images shared during the Media Launch of Axiata Arena, it looks like Axiata’s logo will be displayed on the outside of the stadium (as seen in the picture above), but Axiata will most likely also request for their logo to be displayed inside the stadium – on the perimeter boards, on the roof and all other prominent positions – and if so, should thereby include such right in the agreement. On the same note, Axiata may also obtain a licence for the relevant Intellectual Property rights in order to use the stadium/arena’s footage (still and moving) and players or crowds in the company’s own advertisements. Another important aspect of the agreement is the protection of the exclusive rights to use the brand and the avoidance of detraction of the brand. Elements such as colours used on logos/words when on ground or  on tickets is vital for maximum benefit and thereby may be included in a schedule as part of the agreement.


Deciding on an appropriate payment mechanism is another aspect within lawyers’ jurisdiction. Be it a lump sum payment upfront, lump sum payment with ongoing annual payments, yearly payments, yearly payments with a bonus for success, or payment with additional payment in kind; the payment structure for the agreed RM55 million is dependent upon the situation of Axiata Arena, such as whether or not a larger lump sum payment upfront would be necessary to aid in the upgrading work.

As a final consideration, both parties should include a specific termination right in the agreement as a precaution should the mutually beneficial circumstance change. The Malaysia Stadium Corporation will want to ensure that they can terminate the agreement if or when Axiata defaults on its payment, while Axiata may want to terminate the agreement in the event of Axiata Arena’s failure to achieve success. The Malaysia Stadium Corporation may also wish to include the right to terminate the agreement where there is a higher offer from an alternative sponsor. Although it is seemingly unfair to Axiata, such clause may be agreed upon  the sponsor being granted the right of first refusal or an assurance that the Malaysia Stadium Corporation’s right to terminate may only become effective within the last two years of the agreement.


While not being a favourite idea to all, the reality is an old and inadequate stadium may remain status quo without the influx of a sponsor’s money. As YB Khairy Jamaluddin noted in the recent Axiata Arena Media Launch, “the average Malaysian would term Bukit Jalil as the nation’s sporting stadium but it does not reflect that. (People) get out as soon as possible because there is nothing to do there”. Conversely, sponsors are always looking to maximise their brand awareness through high profile institutions. Hearing Axiata’s name repeatedly over the television, radio, internet and newspapers alongside the SEA Games and ASEAN Paralympic Games this year is definitely an attractive upside. 


Looks like it will turn out to be a win-win situation for both parties after all.




By: Richard Wee, Lesley Lim, Vincent Lim*


*We are proud to be associated with this transaction and hope this be the beginning of many other similar renaming exercise in future. 
                          


Tuesday, 4 October 2016

Sports Law Conference 2016, by SLAM


The Sports Law Conference, usually synonymous with RWY, will this year be organised by KLRCA & Sports Law Association of Malaysia (SLAM). Lesley Lim and I will continue to lead the Organising Committee for the 2016 edition of this annual Conference.  

#PlayByTheRules 









Monday, 3 October 2016

New Challenges, New Chapter.


Wish to share that I have joined Messrs MahWengKwai & Associate (MWKA) on 1st October 2016 as a Partner of the Dispute Resolution Practise Group & Head of the Sports Law Practise Group. 


Fellow team members from RWY, namely Senior Associates Sarah Kambali & Lesley Lim and Associate Marlysa Razak have also joined #MWKA

Thank you.

http://www.mahwengkwai.com

Saturday, 1 October 2016

#SportsLaw || Image Rights : Feeding the Hungry Sponsors

Link : https://www.linkedin.com/pulse/image-rights-feeding-hungry-sponsors-richard-wee?trk=pulse_spock-articles


         Sports has evolved from an extra co-curricular activity to a booming industry over the last 50 years. The sports industry generates large funding and financial turnovers which creates a financial market on its own. In the middle of this entire gigantic industry remains the soul of sports, which is the athlete. In competitive sports, every athlete carries the goodwill and brand of that sport. Speaking of brands, it is common to read about athletes creating and maintaining their image rights. This concept of image rights is very much part of that earlier-mentioned sports industry above. Some athletes gain much financial income from their respective image rights.
         On the other hand, an increasing number of corporate companies have come to realize the potential of being associated or connected to the sports industry. Major brands like Coca Cola, McDonald’s and Samsung have constantly invested in sports sponsorship to ensure that their brand is seen to be connected to sports brands. This hunger that corporations have to link up with sports has become a driving force for the creation of a win-win situation for both parties. In all of this, sports lawyers have a unique role in bridging the gap between these demanding corporations and their desired sports.
         In Malaysia, the concept of image rights and its use in the sports industry is a foreign topic, an income-inducing opportunity unseized by many local athletes. However, with the rampant growth of globalization, a failure to properly manage one’s image would significantly hamper the individual’s ability to take control of possible additional income. It is especially relevant to sports athletes who have been granted celebrity status which may be used as a gauge of the athlete’s worth in the market. An example would be Datuk Lee Chong Wei.[1] His income is based mainly on his competition winnings but he also earns lucrative income by controlling the use of his image in endorsement deals with the likes of ‘100 Plus’ and ‘Yonex’. 
         In order to get a clearer definition of image rights in the sports industry, a panoramic comparison of image rights in the United Kingdom (UK) and the United States (US) has to be made. In the UK, there is no specific statutory provision for a right to one’s image, nor has it been expressly adjudicated within common law.[2] However, image rights is interlinked with the law in regards to intellectual property rights that protects creations. There are two aspects to the protection of image rights, which are to protect a person's right to privacy and a person's ability to commercially promote oneself. [3]

         Prior to the US case of Haelan Laboratories, Inc. v. Topps Chewing Gum, Inc.2,[4] the right to privacy first protected individuals against the unauthorized use of their likeness for commercial purpose. It was developed in the Haelan[5] case where it formed the basis for the right of publicity.[6] This right provides that every individual has full control over the commercial use of their identity which includes their name, voice, signature and photograph. It aims to prevent unauthorized and uncompensated exploitation of an individual's image. Because of this, US is deemed to be the forerunning country for protecting an individual's image rights. However, the First Amendment to the US Constitution limits the right to publicity[7] in an attempt to form a balance between the aforementioned right and the right to freedom of expression. This is considered to be a necessary amendment to prevent infringing the freedom of press.

How are Image Rights Protected? 
As there is no specific law for image rights, intellectual property law aids in protecting an athlete's image rights through various means, for example: through the law related to trademarks and passing off.
Trademarks are recognizable insignias or words used to identify and differentiate a particular product from another, also indicating its source. Trademarks are registered to allow legal action to be taken if the trademarked brand is used without permission. In relation to image rights, athletes can register their name or their signature as trademarks. This however does not include their image. An example would be the world renown footballer, Paul 'Gazza' Gascoigne who trademarked his nickname 'Gazza', bringing about the Gazzamania fandom. These trademarks are protected under various trademark laws like the US Lanham Act and the UK Trade Marks Act 1994.
Another means of protection is through the law of passing off. Where trademarking is a precautionary measure, the law of passing off is a post-conflict step. As celebrities, it is common for an athlete’s image to be used in endorsement deals. An unauthorized use of the celebrity's image to endorse a product is considered passing off. It must be proven (1) that at that point in time, the individual had a significant amount of goodwill or reputation and (2) that a significant amount of the general population would mistake the false endorsement as a genuine endorsement by the celebrity. The athlete will then be entitled to compensation under the law of passing off.

The Role of Lawyers in Marketing Image Rights 
Malaysia applies similar law to that of UK whereby an athlete’s image rights are protected via trademarking their name. In addition to trademarks for individual athletes, sports teams like the JDT Football Team or the KLBC Badminton Team may take steps to register the team brand. This is where sports lawyers with intellectual property knowledge enter the picture.
Once the brand names are registered, it is encumbered upon relevant characters or teams to promote the brand commercially. Co-branding efforts or selling of the brand to corporate organizations are examples of commercializing an athlete’s image rights. Sports lawyers are involved in each stage of trademarking and marketing the said brand whereby they may also act as marketing advisors cum publicity agents.
Despite being a relatively uncommon field of practice in Malaysia, sports law is in great demand in Western countries. Sports lawyers draft and formalize commercial contracts between parties, ensuring the athlete is legally protected. In this modern age where having a significant presence on social media would greatly enhance the athlete’s brand, it is the sports lawyer’s duty to advise the athlete how to manage social media sites and the content that appears on their page. They filter the content to be posted on the site and advise the athlete on politically correct means of managing conflict. In terms of marketing efforts, a commercial post is planned and timed by the lawyer for maximum impact.
The commercial benefits of controlling one’s image is evident when analyzing football giants, Manchester United. Their nickname ‘The Red Devils’ has received much global recognition from corporations and fans alike. The strategic marketing of that name is a significant factor as to why they are ranked No. 1 on Forbes 2016 list of the World’s Most Valuable Sports Teams with a gross value of $1.86 billion.[8] The commercial team together with the sports lawyers of Manchester United have successfully developed their brand and image rights, forming beneficial commercial partnerships with a diverse group of elite brands (ie. Nike and Adidas). The ever-growing desire of certain corporate companies to be associated with successful sports clubs as mentioned earlier above, drives this economic pursuit for sponsorship through the image rights of the club, the team and/or the athlete.
In summary, the driving force behind a successful union between the corporate and sports sector is actually the demand potential sponsors generate by their need to be constantly fed. The relationship between the sectors has become so congruent that the absence of one would greatly impact the commercial wealth of the other. In order to satisfy this ever-growing hunger, image rights in the sports industry have to be properly created, registered and commercialized. Nonetheless, despite the hunger of sponsors, the many commercial opportunities they seek would be non-existent if it were not for the sport itself and the role the athlete plays. The centerpiece of the sports industry has always been and will always be the winning goal shot in by the athlete, the winning point scored at the final buzzer, fulfilling their principal intent of achieving victory. The spirit and soul of sports shall always remain paramount.
By Richard Wee & Samuella Kong 
=========================== 
[1] Jeffri Cheong, “Is your Image worth anything?” <http://www.skrine.com/is-your-image-worth-anything> accessed 7 July 2016
[2] InBrief.co.uk, “Is there a Right to Protect your image under UK Law” <http://www.inbrief.co.uk/human-rights/image-rights/> accessed 7 July 2016
[3] “Is there a Right to Protect your image under UK Law” by InBrief.co.uk <http://www.inbrief.co.uk/human-rights/image-rights/> accessed 7 July 2016
[4] 202 F.2d 866 (1953)
[5] 202 F.2d 866 (1953)
[6] Luca Ferrari and Stella Riberti, “Comparing How Image Rights Laws Apply to Sport in the US, UK and Europe” (British Association for Sport and Law, 22 December 2015) < http://www.lawinsport.com/articles/item/comparing-how-image-rights-laws-apply-to-sport-in-the-us-uk-and-europe> accessed 7 July 2016
[7] Luca Ferrari and Stella Riberti, “Comparing How Image Rights Laws Apply to Sport in the US, UK and Europe” (British Association for Sport and Law, 22 December 2015) <http://www.lawinsport.com/articles/item/comparing-how-image-rights-laws-apply-to-sport-in-the-us-uk-and-europe> accessed 7 July 2016
[8] Forbes, “The World’s Most Valuable Sports Teams” <http://www.forbes.com/pictures/mli45fdhk/no-1-manchester-united/#6e5d6c9e2270> accessed 7 July 2016