February 22, 2012
FROM: DAVID GREIFINGER, ATHLETES’ ADVOCATE
RE: UPDATE ON USATF RESTRICTIONS ON COMPETITION UNIFORM LOGOS
To All Concerned:
I am updating the discussions regarding USATF’S logo restrictions that have taken place since the 2011 Annual Meeting in St. Louis. This memo has been drafted in collaboration with the Athlete’s Advisory Committee leadership.
USATF’S National Office, without a vote by the Membership or the Board, instituted a policy of enforcing IAAF advertising regulations restricting the size and number of commercial logos and the size of club logos on athletes’ uniforms at USATF national championships, club championships, “Golden Spike” track meets, and road race championships. The National Office instituted these guidelines, in whole or in large part due to the urging of Nike, the USATF National Team Uniform Sponsor.
The IAAF regulations limit the size of a manufacturer’s logo to 30 sq cm, and a sponsor’s logo to 40 sq cm. Athletes may wear one manufacturer’s logo and one sponsor’s logo. Club logos are limited to 40 sq cm, with the exception of non-commercial clubs that existed prior to 1980. Attire may not include both a non-manufacturer sponsor logo and a club logo.
IAAF regulations apply at certain international competitions governed by IAAF rules. These regulations do not apply to United States domestic meets. The USATF National Office’s decision to apply these rules domestically was made independently from the IAAF.
The Athletes Advisory Committee and the athletes it represents strenuously oppose these regulations. Athletes strongly voiced their opposition at the 2011 Annual Meeting, and unanimously endorsed a resolution revoking all restrictions imposed by USATF when not required by the IAAF or USOC. The resolution was set for a vote at the closing session of the Annual Meeting. Just prior to the session, the proponents of the resolution agreed to table the resolution with the understanding that any future restrictions imposed by USATF would be first vetted by the Athletes Advisory Committee, and then voted upon by the Board.
DISCUSSIONS SUBSEQUENT TO ANNUAL MEETING
Larry James, the Counsel to the Board, was charged with leading the discussions for USATF with the Athletes Advisory Committee. Jon Drummond, the AAC Chair; Dexter
McCloud, the AAC Secretary; and David Greifinger, the Athlete Advocate have represented AAC’S position. Mr. James has been most courteous during the process.
After various communications, Mr. James arranged a conference call of the interested parties in an attempt to find a resolution. AAC accepted Mr. James’ invitation to propose an alternate set of regulations. AAC, recognizing USATF’S interests in meet presentation, forwarded a detailed proposal. That proposal, attached as Exhibit “A,” would permit the logos of one manufacturer and up to two sponsors. Logos would be limited to 40 sq cm, or to lettering of no more than 4 cm high, with no limitation in width. Non-commercial club logos would not be limited in size, and could be worn along with sponsors’ logos. The regulations would apply the indoor and outdoor track and field championships and to the Visa Championship series track competitions.
USATF’S counteroffer, attached as Exhibit “B” (with USATF’S changes to AAC’S proposal tracked) would continue to apply IAAF regulations with two exceptions. First, a sponsor’s logo and a club logo could both appear on a uniform. Second, club logos could be larger than the size permitted by the IAAF, though the new limit is not specified. The restrictions would apply to all USATF-owned elite competitions in track and field, cross-country, and road racing.
AAC responded that USATF’S counteroffer was unacceptable. AAC does not accept the severe limitations on the number of sponsors and logo size for domestic meets that the IAAF imposes internationally.
USATF’S CURRENT POSITION AND JUSTIFICATION
USATF has consulted with Nike, and is holding firm in its position that the Board should adopt its counteroffer to AAC. Mr. James has written a memorandum explaining USATF’S position. (See Exhibit “C.”) Mr. James has also shared a June 17, 2009 e-mail from Doug Logan, the former CEO, to the Board; a Board resolution; and a USATF press release concerning the renewal of the USATF-Nike contract in 2009. (See Exhibit “D.”)
Mr. James highlights a part of the USATF press release:
“Nike will be a major sponsor of the USA vs. Jamaica Challenge meets in 2010 and will continue to sponsor USA Track & Field’s Indoor and Outdoor Track & Field Championships. Nike will outfit all USATF teams in international competitions, including the Olympic Games, World Championships, World Cup, Pan American Games and World Junior Championships, among other meets. The agreement also confirms Nike’s sponsorship of USA vs. The World, first held in 2000, and one of the key stops on the Visa Championship Series, USATF’S signature series of indoor and outdoor track and field meets.”
Mr. James states in his memo:
“We initially reviewed the Sponsorship Agreement with Nike…We asked what Nike’s expectations were regarding competitors’ logos and use in meets that USATF controls. We observed that Nike had the option of reducing revenue if they determine that the value of this contract has been reduced by anything that USATF does or does not do…
“We also advised David Greifinger that the Nike contract did not directly address the issue of his proposed resolution and the logo issue. However, we advised David that the contract is crystal clear that Nike has the right to make a determination as to whether any action by USATF reduced the value of this contract. If Nike made that determination, they had the right to reduce revenue.
“…Nike has stated its position and its position is that it prefers that IAAF rules control.
“Keep in mind that the Nike contract was negotiated by Doug Logan in 2009…If there was ever a dispute relative to the interpretation, he would be a key witness as to his intent with Nike regarding the logo issue. That is a place we do not want to be. Absent Nike’s willingness to concede the point, we are on dangerous ground for a number of reasons. Thus, it would be our recommendation and concurrence that the best we may be able to do is the Resolution offered by the National Office” (emphasis added.)
DOUG LOGAN CONSTRADICTS USATF’S ASSERTIONS ABOUT THE NIKE CONTRACT
After reading Mr. James’ memo, I contacted Doug Logan to confirm or deny USATF’S perceptions and concerns about the Nike contract. Mr. Logan responded with an e-mail, attached as Exhibit “E.” Mr. Logan states:
“…I made absolutely no oral promises nor did I represent that they [Nike] were entitled to any rights other than those expressed in the contract. I did assure them I would aggressively enforce the rights which they were acquiring. If asked to testify I would assert my belief that athlete uniforms in domestic competitions are outside the scope of rights acquired by Nike and not material…” (emphasis added.)
AAC’S POSITION AND RATIONALE
USATF’S proposal to impose IAAF regulations with the two suggested modifications is wholly unacceptable. USATF’S relationship with Nike does not mandate or justify imposing IAAF logo restrictions on athletes competing in domestic meets. Nike has no contractual right to demand that USATF these restrictions. Any restrictions mutually agreed upon should reflect best practices to benefit meet presentation, while protecting athletes’ economic opportunities, and not parrot overly restrictive IAAF rules.
Nike’s contract gives it exclusive rights to place its logo on National Team Uniforms, and gives it sponsorship rights to certain USATF-controlled competitions. As confirmed by Mr. Logan, the contract does not give Nike any rights over athletes’ uniforms in competitions where they are not wearing the national team uniform. The contract cannot (and could not) prevent athletes from wearing competitors’ logos on their uniforms when not representing national teams. Hence, various athletes wear the logos of Adidas, Reebok, and all the other manufacturers when competing at USATF meets. And, nothing in the Nike contract could conceivably limit the logos of sponsors whose products do not compete with Nike.
As Mr. James has confirmed, the Nike contract does not directly address the logo issue. Nike’s purported right to determine that USATF has either acted or failed to act in any manner that reduces the value of its contract, and then to reduce revenue is vague, nonsensical, and unenforceable. Taken to its logical extreme, Nike would have veto power over the composition of USATF’S Board and committees, USATF’S Bylaws, Regulations, and Competition Rules, and all matters pertaining to competitions and athletes’ rights.
Notably absent from Mr. James’ memo is any discussion about best practices for presenting the sport.
USATF has taken an approach that can be euphemistically described as cautious. USATF is wrong for several reasons.
First, USATF is compromising the good standing of the National Office and USATF’S volunteer leadership by imposing rules on its constituents that they do not want, and which harm their economic opportunities. USATF’S health as an organization depends on collaboration from top to bottom. Consent of the governed is essential.
Second, under the Sports Act, USATF must “demonstrate that it is autonomous in the governance of its sport in that it (A) independently decides and controls all matters central to governance; (B) does not delegate decision-making and control of matters central to governance; and (C) is free from outside restraint” (emphasis added.) USATF cannot delegate the drafting of its rules or decisions about athletes’ rights and economic opportunity to Nike or to any other sponsor. Doing so will jeopardize USATF’S standing as a National Governing Body and subject it to potential litigation.
Third, any combination by USATF and Nike (or any other sponsor) to limit athletes’ economic opportunities raises the specter of federal and state antitrust violations, unfair competition violations, and claims for interference with prospective economic advantage.
AAC’S REQUEST FOR BOARD ACTION
AAC urges the Board to reject the resolution embodied in USATF’S counteroffer, and to revoke these unilaterally posted regulations for this weekend’s Indoor Championships. The Board should study the matter further, and consider AAC’S proposal as a starting point for best practices for meet presentation that simultaneously preserve athletes’ economic opportunities. As stated in the AAC proposal, USATF should also use all reasonable means at its disposal to have the USOC adopt the AAC proposal as guidelines for Olympic Trials competition.
PROPOSED AMENDMENT TO RULES OF COMPETITION
The following proposal is being submitted for consideration at the 2012 Annual Meeting to amend USATF Competition Rule 143.1. AAC will ask the membership to adopt this amendment if this matter is not satisfactorily resolved.
AMEND Rule 143.1 to read as follows (new language underlined):
In all events competitors must wear clothing that is clean, designed, and worn so as not to be objectionable. The size or number of logos on athletes’ attire shall not be restricted when not required by the IAAF or USOC. The clothing must be made of a material that is not transparent even if wet. The competitors must not wear clothing that could impede the view of the judges. Athletes’ vests should have the same color on the front and back. This rule shall be enforced by the Clerk of the Course for track and road events and the Chief Judge of each field event.
LRC Note: Exhibits Referenced: Exhibit A: Athletes Proposal for Uniforms
*Exhibit B: USATF's Counteroffer
*Exhibit C: Mr James Memorandum Explaining USATFs Position
*Exhibit D: Doug Logan Email from 2009 to USATF Board Announcing Nike Agreement
*Exhibit E: Doug Logan Email Saying He Would Testify Uniform Restrictions Are Not Part of Current Contract