Countdown to the World Cup

Organisers rush to finish stadiums; lawyers wrestle ambush marketing and freebie tickets.

Brian Nicholson

In just a few months, Brazil will play host to hundreds of players, thousands of journalists and possibly half-a-million tourists for what is widely recognised as the planet’s greatest sporting competition, the FIFA World Cup.

A few will probably be mugged, others perhaps ripped off by cabbies or call-girls, but the vast majority will surely have a wonderful time perchance a little sunburned and hung-over, even if their team doesn’t make the final. And the world’s media, having devoted much ink – as it always does before the World Cup or Olympics – to warning of impending chaos, will smoothly switch gears to discover fabulous stadiums, friendly people and, predictably, the ‘party of a lifetime’.

Meanwhile, several local lawyers are limbering up for some pretty hard work, even before the 12  June kick-off.

With London bookmakers quoting local favourites Brazil, reigning champs Spain, perennial hopefuls England and outsiders USA at 3/1, 7/1, 33/1 and 150/1 respectively for the title among the 32 competing nations, it was probably easier to predict what will and won’t happen offthe field. By hook or by crook – a phrase that should not be taken too literally – all the stadiums will be finished, albeit a few still smelling of fresh paint. Some of the planned improvements to public transportation will be operating, others won’t, and airports may be a bit of a zoo despite many last-minute terminal extensions. But hey – paciência! Fans will end up getting around OK. Even Manaus in the Amazon rainforest can be visited without being swallowed whole by caimans, despite what the British tabloid press would have us believe.

Yes, a few local protesters will probably take to the streets. Brazil has lavished roughly US$3.5bn of public cash on 12 new or heavily refurbished stadiums, three times South Africa’s declared outlay for the 2010 competition, and some curmudgeons argue it would have been better spent on new schools and hospitals, built to the same glittering ‘FIFA standard’. But the steam appears to have gone out of last June’s huge demonstrations, and serious questioning will probably come only some years hence when several stadiums sit empty.

Ambush marketing in a smartphone jungle

‘Many lawyers have been busy with contracts for stadiums and other construction, and also tax matters, but the great volume of work now and going forward will be for lawyers with specialization in entertainment, sporting rights and intellectual property,’ said André Zonaro Giacchetta, responsible for intellectual  property at Pinheiro Neto, a 78-partner firm that is advising some official sponsors and several other companies about World Cup do’s and don’ts.

FIFA allows just 20 companies described as ‘Partners’, ‘World Cup Sponsors’ and ‘National Supporters’ to associate their brand with the event. But, observed Giacchetta, there are ‘hundreds or even thousands of companies that are subject to certain rules and conditions designed to guarantee FIFA’s exclusive rights,’ as expressed in Brazil’s Law 12.663 of June 2012. Dubbed the ‘World Cup General Law,’ this imposes restrictions through December 2014.

‘Obviously it’s necessary to protect the investments made by the official sponsors – the largest amount is around US$130m for a four-year deal including one World Cup – but there are also thousands of other companies that cannot have their right to compete excessively restricted,’ he said.

FIFA demands that non-sponsors shall not in any way link their name, brand or product with the Cup and always wants to interpret this restriction very widely, Giacchetta said, but this will be a particular problem in Brazil given the central role of football in the country’s culture, and by extension in advertising.

‘Obviously it’s necessary to protect the investments made by the official sponsors – the largest amount is around US$130m for a four-year deal including one World Cup’

André Zonaro Giacchetta
Intellectual property specialist,
Pinheiro Neto, São Paulo

The World Cup Law allows for as-yet-undefined ‘commercial restriction zones’ of up two kilometres around each stadium, training centre, media centre, parking area, fan leisure area and other ‘official sites’, within which accredited sponsors enjoy exclusive marketing rights. ‘Formally-established commerce’ may continue to operate, but traditional street vendors may face problems. ‘FIFA obviously tries to work with municipalities to define these restriction zones as widely as possible, to include as many competitors as possible,’ Giacchetta said.

Nevertheless, he predicted that the main problem in Brazil will be ambush marketing, defined as a crime in Law 12.663 and thus paving the way for police to seize products or promotional items, while giving FIFA the right to decide whether or not a case should be pursued. And he sees social media as the new emerging battleground. ‘Looking at the number of people with internet access, smartphones and tablets and comparing that with the expected TV audience, I expect on-line marketing to be immense in this World Cup; a qualitative difference from previous Cups. This will be the biggest challenge for FIFA and the official sponsors.’

Elsewhere in Latin America the World Cup has caused much excitement but no major spike in legal work. ‘Brazil is such a big country that [clients] can obtain what they need domestically,’ says Pablo Iacobelli, Co-Chair of the IBA’s Latin American Regional Forum and a partner in Carey, a Santiago, Chile-based firm. But, he says, ‘everybody is very excited because Chile qualified!’

Freebie tickets could be costly

One problem not expected at the event is match-fixing along the lines of scandals seen recently in Europe. The event is too high-profile; the global scrutiny too great. But some lawyers think new Brazilian anticorruption legislation that took effect January could hamper companies hoping to use World Cup hospitality to woo public officials.

‘Law 12.846 is important because it introduces the concept of strict liability in Brazil,’ explained lawyer Luiz Navarro, a senior counsel with Veirano Advogados, a 54-partner law firm. ‘Companies could now face fines of up to 20 per cent of gross turnover if one of their executives – even without their knowledge or authorization – is proven to have given an ‘undue advantage’ to a public official.’ Navarro was until recently Deputy Minister of State at the Office of the Comptroller General, where he coordinated Brazil’s participation in the OECD Working Group on Transnational Bribery and participated actively in drafting the new law.

‘Companies are asking us what they can and cannot do in terms of offering World Cup tickets to public officials, and inviting them into corporate boxes, and this has become much more problematic with the new law. Our basic advice is don’t do it, at least until the government issues regulatory guidelines, and if you must, then do it very openly and be modest, skip the champagne and limos,’ Navarro said. ‘World Cup tickets are very expensive and companies naturally tend to give them to people that they are interested in.’

Navarro said the new law could also impact the off-books donations that have traditionally been a major source of Brazilian political campaign financing. But the presidential election is not until October, and before that there’s a World Cup to win or lose. 

Brian Nicholson is a freelance journalist. He can be contacted