Wednesday, 20 June 2012

Commercial Speech in Sports Advertising

One of the most important revenue streams in the sports industry is from advertising. The concept is simple -- an advertisement is created and placed, generally in exchange for a fee. But commercial speech rules and restrictions can influence what goes into an advertisement, whether an advertisement can be placed at all, and what the potential liability is for the advertiser.

Two recent cases demonstrate the impact of commercial speech in sports.

The first involves Michael Jordan and the Jewel-Osco grocery store chain, which was asked to place an advertisement in a special issue of Sports Illustrated honoring Jordan. The ad contained a Jewel-Osco logo and congratulated Jordan from a "fellow Chicagoan." Jordan sued, claiming that the ad explored his name and likeness for commercial gain without his permission. The court, however, found that the ad was in fact not an ad because it did not promote Jewel products or services. The "ad" therefore was not commercial speech and thus entitled to the full protections of the First Amendment. Jewel was thus not liable to Jordan, but it took a litigation to confirm its rights.

The second case involves the Family Smoking Prevention and Tobacco Control Act, passed in 2009. The statute bars tobacco manufacturers from promoting their brands through sponsorship of athletic, social and cultural events in the brand name of a tobacco product. On March 2012, the Sixth Circuit Court of Appeals upheld the sports sponsorship ban, finding that the statute directly advanced the Government's interest in reducing tobacco use by youth.

Advertising is simple, but, as these cases demonstrate, advertisers need to consider the possible impact of commercial speech principles while planning some advertising campaigns.

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