Rule 40: an Olympics Advertising Explainer

Little in this world is outside the influence of the almighty dollar. The Olympic Games, for all the International Olympic Committee’s high falutin’ rhetoric around the purity of sport, are no exception. In order to provide some clarity on how the image of the games can be used for profit, the IOC has attached a bylaw to Rule 40 of the Olympic Charter, which otherwise states that athletes must abide by the rules set by IOC and their individual country’s Olympic committee.

To participate in the Olympic Games, a competitor, team official or other team personnel must respect and comply with the Olympic Charter and World Anti-Doping Code, including the conditions of participation established by the IOC, as well as with the rules of the relevant IF as approved by the IOC, and the competitor, team official or other team personnel must be entered by his NOC.

Things get more complicated in the four bylaws of Rule 40. Bylaws one and two establish the roles of each sport’s international governing body in determining how athletes qualify for the games. Bylaw four makes it clear that athletes can enter the games for free and that the IOC will not pay an athlete to enter the games.

Bylaw three to Rule 40 is where the money comes in. It states:

Except as permitted by the IOC Executive Board, no competitor, team official or other team personnel who participates in the Olympic Games may allow his person, name, picture or sports performances to be used for advertising purposes during the Olympic Games.

This paragraph affects the financial livelihood of Olympic athletes more than any other rule in the Olympic Charter. The money earned by athletes from competition pales in comparison to the money they can earn through endorsement deals.

Companies who sponsor the games, such as Nike, Coca-Cola and Visa among others, are “Official Partners of the Olympic Games” and are exempted by the IOC Executive Board from this rule. But when it comes to endorsement deals, these companies tend to pull from only a small pool of extremely successful and popular athletes. That’s why TV commercials during the Olympic season are dominated by a rotating cast of Ashton Eaton, Michael Phelps, Usain Bolt and Gabby Douglas.

According to the IOC, the purpose of Rule 40 is “to preserve the unique nature of the Olympic games by preventing over-commercialisation.” The IOC wants to limit the number of companies that profit off of the Olympic Games, which is why Rule 40 serves to protect the few sponsors of the games.

The argument against Rule 40 is that if more companies were allowed to reference the Olympics in advertising, a larger amount of money would be available to be spread out to a greater number of athletes. Pushback against the rule—led by athletes themselves—has led to the IOC loosening regulations on non-sponsor companies. Advertising campaigns that begin before the games will be allowed to continue, but non-sponsor companies cannot in any way imply that they are connected to the Olympics.

The IOC rule only applies for less than a month, from July 27 to August 24, but that window covers the entirety of the games. Still, the effects of Rule 40 are not just felt well before the Olympics begin. The Olympic committees of individual nations are responsible for enforcing Rule 40, and many of these national committees supplement the rule with additional regulations. The United States Olympic Committee, for example, requires that advertising campaigns featuring potential American Olympic athletes be approved six months prior to the games.

Michael Sol Warren is a Boston-based freelance writer. Follow him on Twitter @MSolDub