Hollis Sponsorship Bulletin

Earlier this spring, Ofcom, the UK communications regulator, published a review of broadcast sponsorship having monitored over 60 broadcast sponsorship campaigns. Various television programmes, including Big Brother, The X Factor and The Alan Titchmarsh Show, were been found to have breached Ofcom’s sponsorship rules.

· What prompted the review?

An apparent increase in the amount of information about sponsors’ products/services included in some sponsorship credits. Most campaigns were found to be compliant, but a number of broadcasters of major programmes, with major sponsors, were considered to be in breach of Ofcom’s Broadcasting Code.

· So what does Ofcom’s Code say?

Rule 9.13 of the Code provides that:

“Sponsorship must be clearly separated from advertising. Sponsor credits must not contain advertising messages or calls to action. In particular, credits must not encourage the purchase or rental of the products or services of the sponsor or a third party.”

The reason for the prohibition is that the Television Without Frontiers Directive, from which the Code is derived, limits the amount of advertising a broadcaster can transmit and requires that advertising messages are kept separate from programmes.

· What is permitted?

References to the products and services of a sponsor in sponsor credits are permitted under the Code on the basis that they can help identify the sponsor or help create that link or association between the sponsor and the sponsored content.

Guidance issued by the European Commission on the interpretation of the Directive states that such references may only be made for the “sole purpose” of identifying the sponsor and making clear the link between the programme and the sponsor.

· Sponsorship credits or advertising – what’s the difference?

There is no clear dividing line between where sponsorship credits end, and advertising begins. Whether a sponsorship credit is actually advertising will depend on a number of factors. Ofcom will take into account factors such as:

- What is the primary focus of the credits – the sponsorship arrangement itself or the sponsor’s product or service?

- What information about the sponsor’s products/services is included in the credits? Does it go beyond simply helping to identify the sponsor?

- Is the viewer encouraged to contact the sponsor to make a purchase (as opposed to simply providing details of the sponsor’s website)?

· Where did the broadcasters go wrong?

From the responses given by broadcasters during Ofcom’s investigation, it seems that some broadcasters took the view that they had seen similar content being broadcast which had not resulted in regulatory intervention and had thus assumed that it was permitted. However, Ofcom has made clear that compliance decisions made by broadcasters should be based only on the Code, not on assumptions based on material previously broadcast.

· What did Ofcom consider unacceptable?

Some examples from the findings in the recent review will help in assessing whether current sponsorship credits are acceptable.

Virgin Media‘s sponsorship of Big Brother including the following voiceovers:

“Ellie and Ruth use their Virgin mobiles to get perks at V Festival without having to flash a roadie like usual”.

“Len’s fibre optic cable is just like his women, fast and easy”.

Reference to being able to get “perks at the V Festival” was considered to be a promotional reference to the benefits of being a Virgin Mobile customer and the use of promotional language (“fast and easy”) went beyond a brief description of Virgin’s business and amounted to advertising messages.

The credits for Carphone Warehouse‘s sponsorship of X Factor included the following messages:

“The new Nokia 5310 comes with music – exclusively on pay-as-you-go”

“We’ve got a broadband package to suit everyone”

Ofcom considered that these statements referred to positive attributes of Carphone Warehouse’s products, and as such went beyond simply helping to identify the sponsor, and were in fact advertising messages to promote particular products.

Benecol’s sponsorship credits of The Alan Titchmarsh Show included the following voiceover:

“some things you can’t control but at least you can control your cholesterol. Sponsored by Benecol”

and the caption

“at least you can control your cholesterol. Alan Titchmarsh show sponsored by Benecol”.

The credits also contained animated pack shots of the sponsor’s products, on which the printed claim “Proven to reduce cholesterol” was clearly visible. Ofcom’s view was that each of the claims that suggested the product was effective in lowering cholesterol, despite some being factual statements, in this context also amounted to advertising messages.

· What is the upshot of all this?

Although Ofcom has the power to impose significant fines on broadcasters, no fines have been imposed following the recent review. However, Ofcom intends to repeat its monitoring exercise of sponsorship campaigns this summer and has said that any credits found to be in breach of the Code may be considered for further regulatory action. As a result, sponsors and broadcasters may want to review current TV sponsorship credits to ensure that they do not contain advertising messages or references to products and services which go beyond what is permitted.

· Isn’t this the broadcasters’ problem?

While sponsors are not directly subject to the Code, the impact of the Ofcom review is clear: the content of many sponsorship credits will now have to change, something which both sponsors and broadcasters alike must address.

· What next?

Ofcom has said it intends to provide further guidance in due course on the interpretation of the rules on sponsorship, a move which will hopefully provide greater certainty on this issue. The Audiovisual Media Services Directive, set to be implemented by the end of 2009, will also be of interest to both broadcasters and sponsors. This is an issue worth keeping an eye out for over the coming months.

Stuart Grey and John Mayes are Associates in the Intellectual Property, Technology and Sports Group at the London office of international law firm K&L Gates LLP (www.klgates.com – +44 (0) 20 7648 9000).

This article is for information purposes only and does not contain or convey legal advice. The information in this article should not be used or relied upon with regard to any particular facts or circumstances without first consulting a lawyer.