The Australian Competition and Consumer Commission's recent decision to investigate a leading events promoter for marketing a sports event using imagery of high profile athletes who did not ultimately participate in the event is a first, and may affect the way in which promoters and other event organisers promote sports events in future.

TEG is a leading promoter of live music, sport and entertainment events in Australia.  Last year it promoted a series of basketball matches between the USA men’s national team and the Australian ‘Boomers’.  The images of a number of high-profile NBA players, including LeBron James, Kevin Durant, Paul George and James Harden were used to promote the matches, but some of these high-profile players did not end up playing.  In some of the promotional materials, TEG also included a mock-up of the stadium which featured a basketball court and tiered seating surrounding the court.  For the events themselves, the tiered seating was not implemented and the view from the seats surrounding the court was inferior as a result.

Some fans were disappointed and complained they had been misled.  The Australian Competition and Consumer Commission (ACCC) carried out an investigation into whether the representations made by TEG regarding players or tiered seating breached any provisions of the Australian Consumer Law (ACL), including section 18 of the ACL which prohibits engaging in conduct that is misleading or deceptive, or is likely to mislead or deceive.

TEG cooperated with the investigation and on 6 April 2020 the ACCC accepted a court-enforceable undertaking[1] from TEG in which it committed, amongst other things, to refund over A$5 million to about 5000 consumers who had bought tickets to the matches.  TEG also accepted a number of other compliance obligations in the undertaking, including the provision of certain disclaimers regarding player availability in its future marketing materials, updating its internal ACL compliance policy, conducting employee training on the ACL compliance policy and providing annual reports to the ACCC regarding the use of player imagery in marketing materials for sports events.

Whilst the representation made by TEG in relation to the tiered seating will be relevant to a relatively small number of events where stadium seating needs to be reconfigured, the outcome in relation to the player representations will be of particular interest to all owners and organisers of sports events in Australia for the following reasons:

• high-profile athletes are almost always used in the promotion of such events;
• it is not uncommon that these athletes are unable to participate in the event (for example, due to injury, suspension or non-selection);
• TEG argued that it acted reasonably in the circumstances by moving quickly to remove a player from promotional materials as soon as it was made aware that the player would not play, and by refunding some customers; and
• this is the first time the ACCC has intervened to consider whether this common practice constitutes misleading conduct under the ACL.

In this article we take a look at three aspects of the ACCC’s investigation which raise a number of questions for event organisers in connection with the use of athlete imagery to promote events.

No ‘reasonable grounds’ to make the representations

The ACCC alleged that TEG had ‘no reasonable grounds’ to represent that the NBA players included in its advertising materials would play, or would be available to play in the matches.  In response to this, TEG argued that it had been granted approval from USA Basketball (USAB) to use the names and images of these players in its marketing materials, and that it was reasonable to assume from this that those players would be available to play.  Whilst the ACCC did not accept this, there is no guidance for promoters and organisers of sports events as to what would constitute reasonable grounds in these (or similar) circumstances.

If TEG had enquired of USAB and discovered that there was a legally binding contractual commitment from the relevant players that they would participate in the events subject only to the usual caveats (e.g. non-selection, injury, suspension, compassionate grounds and so on), it seems to us that this should have satisfied the ‘reasonable grounds’ test.

However, it is unclear if anything less than a legally binding contractual commitment by the relevant players would have sufficed.  For example, if TEG had received an express written assurance from USAB that certain players would participate (but TEG was unaware of any legal basis for USAB providing this assurance), would this constitute reasonable grounds for TEG representing that those players would play?

Requirement to include prominent disclosure regarding player participation

In its undertaking, TEG agreed to include in any future marketing collateral relating to any overseas sports team’s tour of Australia a ‘prominent disclosure’ that the final team selection may be subject to change and that it cannot guarantee that the players selected for the tour will ultimately join the tour.  It remains to be seen how ‘prominent’ this disclosure will have to be, but it will be the first time a disclaimer of this nature has been included in these types of promotional materials, so we expect all organisers of sports events in Australia will be watching closely.

We note with interest that the undertaking requires the prominent disclosure to be included in promotional materials for tours by overseas sports teams only, and not for matches involving domestic teams.  This may be because the ACCC considers that the risk of high profile overseas players not touring is greater than the risk of locally-based players not turning out for domestic teams.  This has historically proven to be the case, mainly because tours to Australia are often outside of the overseas team’s regular season (when most players take leave) and almost always involve travelling a long way.

It seems unlikely that we will see disclosures about player participation in promotional materials relating to domestic sports matches, but it will be interesting to see whether event organisers promoting tours by overseas teams will (consistent with the TEG undertaking) include such disclosures as a precautionary measure.  It seems that to do so would place them in a stronger position in the event that there is a complaint to the ACCC and, given the high-profile nature and outcome of the investigation into the basketball matches promoted by TEG, complaints by consumers that they have been misled are much more likely.

Requirement to ‘correct’ advertising when players become unavailable

Finally, in addition to including disclosures in its advertising materials, TEG also agreed in its undertaking to ‘correct’ any advertising which uses imagery and names of international players who subsequently become unavailable.

As referred to above, TEG had moved quickly to update the relevant marketing materials as soon as it was informed by USAB that a player was no longer available.  Presumably this involved taking down (where possible) advertising which displayed the image of an unavailable player and replacing it with new advertising with images of available players only.

It is unclear whether the undertaking to ‘correct’ would require TEG to go any further than this.  For example, in addition to replacing the existing advertising, would TEG be required to notify customers who had purchased tickets or issue a public statement that a player is no longer be available and, if so, how broadly would that statement have to be disseminated?  Again, other event organisers will be watching this with interest.

[1] The ACCC has powers under section 87B of the Competition and Consumer Act 2010 (Cth) (CCA) to accept written undertakings in relation to a breach or an alleged breach of the CCA; this typically occurs where the party in question wishes to settle a dispute with the ACCC over an alleged breach of the CCA. Section 87B undertakings generally require the party giving the undertaking to admit the conduct in question and admit that it is or may be a breach of the CCA, and then undertake to do, or not do, certain things or engage in certain conduct.