The row that has erupted between Chinese basketball star, Yao Ming, and Coca-Cola over the use of his image for a promotion has raised some interesting questions about sports sponsorship. Ben Cooper takes a look at how Coca-Cola put one over on its arch-rival and the ensuing reactions.
To those who don’t follow North American or Chinese basketball, Yao Ming is not a household name. Or at least it wouldn’t have been until last week. Now, whether you follow basketball or not, the seven-foot-five-inch Houston Rockets centre will be familiar because of the row which has blown up between the player, PepsiCo and Coca-Cola over the use of his image for promotional purposes.
With the ink barely dry on a lucrative personal contract between Yao and Pepsi, Coca-Cola began distributing bottles bearing the star’s image, along with two other players from the Chinese national basketball team, in China. PepsiCo and the star himself were incandescent but Coca-Cola has a perfectly legal contract, agreed in June last year, with the state-owned company, China Sports Management Co. (CSMC), which is the commercial representative of the national men’s basketball team. This allows the company to use the images of players in the team.
“I demand that the company immediately withdraw those products and advertising material carrying my image, and reserve the right to take legal action,” Yao said on his website. “I have signed a contract with Pepsi-Cola, not Coca-Cola. I signed with Pepsi-Cola because I believe it to be an outstanding company that is worthy of respect. I never agreed to let Coca-Cola use my image in their commercial promotions.”
Yao gave Coca-Cola until 22 May to act on his request or legal action would be taken, under the 100th article of the US civil law, which states the image of an individual cannot be used for commercial purposes without their approval. Duly he has just filed a lawsuit against the US soft drinks giant.
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By GlobalDataFrom a legal perspective, there would appear to be a conflict between the two contracts. The situation is reminiscent of a similar furore over the use of David Beckham’s image by Coca-Cola during the 2002 World Cup. Like Yao, Beckham had a contract with PepsiCo, while Coca-Cola had a corporate contract.
However, there has been no suggestion so far that PepsiCo intends to sue its competitor over the row. PepsiCo spokesman, Charles Nicolas, said: “Once again, Coke’s on the sidelines, trying to sneak into our game. We’re confident Yao will stand tall against Coke,” which sounds remarkably like “Good luck, chum, but this is a legal minefield and we’re not going to get involved”.
The only action PepsiCo may be taking is to have strong words with their lawyers. The addition of a clause in the contract referring to this eventuality – which after all has happened before – might have put PepsiCo in a position where it could have some sort of legal redress.
It is now a question of legal debate whether Yao has a case against Coca-Cola or whether Coca-Cola’s deal with CSMC is completely watertight as Coke is maintaining. CSMC’s relationship with the star and its right to sign away his image rights may also eventually come under scrutiny. Nowadays, national sports federations are often in much weaker positions than the big name stars like the Beckhams, Ronaldos and Yao Ming’s of this world. If this furore leads to any changes it may be in the addition of certain caveats to corporate contracts regarding the use of high-profile players by certain sponsors. Though it should be said that Chinese federations’ grip on its stars remains tighter than most. All that will no doubt be for the lawyers to pore over in the future.
Coca-Cola’s action has been widely described as ambush marketing. While it may be true that Coca-Cola has been able to get one over on its main competitor, it can hardly be said that this has been done by stealth on the part of Coke. Coca-Cola’s deal with the team predates Yao’s deal with PepsiCo by about nine months.
It seems inconceivable that PepsiCo did not know about that deal and if it didn’t arguably it should have done. And equally, Yao’s advisors should have been well aware of the potential conflict. Did they imagine that looking at an excellent promotional opportunity and a chance to rain on its competitor’s parade, Coca-Cola, long engaged in the most cut-throat and fierce battle with a smaller but nonetheless very powerful adversary, would simply decide to be magnanimous and not take advantage? This situation would appear to owe more to the carelessness or naivete of one party rather than the guile or ruthlessness of the other.
This row also illustrates that the personal endorsement field – without doubt one of the fastest developing areas of brand media – has its pitfalls. Stars whose faces are in the papers and on the TV all the time are a marvellous halo for a brand but, as Catherine Zeta-Jones and Michael Douglas found out, images of globally famous personalities are not the easiest to control.
Equally, when a brand attaches itself so closely to one person, it runs the risk that any negative associations with that person will reflect back on the brand. That is not the case in this instance but it has already happened with a number of sponsorship deals with stars from the music industry, where brands have had to drop stars with unseemly haste.
For brands like Coca-Cola and PepsiCo, the truism that there is no such thing as bad publicity doesn’t always apply. Just ask them about their recent Himalayan advertising campaign. However, in this case it probably does.
Vehicles such as sports promotion are primarily aimed at boosting brand visibility. Pepsi may be smarting that Coca-Cola is benefiting from Yao’s image but that was a done deal months before it agreed its contract with the star. The ensuing row has at least guaranteed that its more significant sponsorship deal with someone who is rapidly becoming one of the big superstar names in world sport is constantly in the spotlight.
So maybe Pepsi ultimately won’t come out of this too badly. Only time will tell if Yao gains any legal satisfaction. While Coca-Cola spokeswoman, Brenda Lee, said the contract “granted the right to use the group image of the team players” and the company “did not see any reason to withdraw the product”, she later added that she hopes company officials could meet Yao’s representatives with a view to settling the dispute “in an amicable way”.
In the meantime, it would appear that the one inescapable truth, which arises from all disputes of this nature, once again applies. While it might be nice to dream of being an international sports star, if you want to rich and never out of work, be a lawyer.
