Advertising on children’s sportswear: the law on e-cigarettes, payday lending & fast food

In November 2014 Wonga, the payday lender and principal sponsor of Newcastle United, decided that the junior version of the team’s replica kits would no longer feature its branding.¹ Wonga’s chairman stated that the reason for doing this was an attempt to clean up Wonga’s image² following a damaging scandal that involved sending money demands to borrowers from fictitious law firms that resulted in a £2.6 million fine from the Financial Conduct Authority (“FCA”).³

Whilst local groups and MPs had put Wonga under pressure for years⁴ with regard to its business practices, there was no regulation or law that prevented it from branding junior kits. In fact, Wonga also sponsor Blackpool FC whose junior shirts still contain Wonga branding.

Pay-day lending is one of many contemporary brand categories that are regulated by government to help protect individuals and, in particular, children. This article will look why children should be protected from advertising from categories of sponsors such as e-cigarettes, fast-food and pay-day lenders, and how to deal with some of the issues that arise when negotiating a sponsorship contract featuring brands from these sectors.

English legislation and the differing definitions of “child”

Children are some of the most vulnerable members of society. There is a wide variety of legislation that seeks to protect younger members of society such as the Children Act 1989⁵ and 2004⁶ to the Children and Families Act 2014⁷ (“CFA”).

The variety of legislation and how it is applied means that there is no stand-alone definition of a ‘child’ or ‘children’ in English law and the NSPCC references eight separate legal definitions.⁸ The general position for many pieces of legislation is that anybody under 18 is considered a child. This is reflected with regard to alcohol, tobacco, betting and many financial services as people under this age are prohibited from using such products or services.

Some regulations such as the Committee of Advertising Practice (“CAP”) Code and Broadcasting Committee of Advertising Practice (“BCAP”) Code define children as being under the age of 16.⁹ There are also further examples of applying a range of age restrictions such as the British Board of Film Classification who have a well-known variety of classifications for those under the age of 18.¹⁰ Sports governing bodies often have rules with regard to advertising to children but these are outside of the scope of this article.

As a result of this range of interpretations it is important when drafting a clause stating that the sponsor cannot market or advertise to ‘children’ that this term is adequately defined. For example, if the sponsor is a beer brand the agreement should define a ‘child’ as a person under the age of 18 for obvious reasons. This leaves no room for ambiguity and places the rights holder in a position of strength if there is a breach.

E-cigarettes

Sports clubs in high profile leagues and competitions have the right to sell advertising space on their shirts albeit subject to a category of brands prohibited to advertise by both legislation and regulation from advertising in any form.

The ban on tobacco advertising in sport was codified in the Tobacco Advertising and Promotion Act 2002 (the “TAPA”).¹¹ Electronic cigarettes or “e-cigarettes” are electronic devices usually shaped like a conventional cigarette that simulates the experience of smoking by vaporising liquid nicotine rather than burning tobacco.¹² They have had the effect of complicating the general tobacco prohibition as they are not covered by the TAPA.

In 2014 the CAP provided guidance relating to how e-cigarettes could be advertised. Whilst there is no strict prohibition on advertising to children, rule 22.9 of the CAP Code states that “marketing communications must not be likely to appeal particularly to people under 18 [years old]¹³”.

If an e-cigarette logo appeared on a junior sport shirt, would this appeal to a child? The received wisdom says ‘yes’ as they would associate their team with the brand as has been shown with alcohol advertising.¹⁴ This was clearly the view of Birmingham City whose sponsor, Nicolites, agreed to donate the space on junior kits to a charity.¹⁵

The French are proposing a harder line when it comes to e-cigarettes. At the end of 2014, Marisol Touraine, France's Health Minister, set out a series of measures in an attempt to reduce the country’s intake of tobacco. As part of the proposals it is planned that e-cigarettes will be banned from cars with under twelve’s in them, at schools, in closed working environments and on public transport. In addition to this, advertising of e-cigarettes is to be severely restricted as soon as possible and then completely banned by 2016.¹⁶

Australia has been at the forefront of protective measures against tobacco and was the first country to introduce plain packaging for any tobacco product, which has reportedly led to a steep decline in the number of smokers.¹⁷ Australia’s federal system of governance means that there has been a piecemeal approach to regulating of e-cigarettes. In Western Australia they have been banned in their entirety, Queensland has only recently made it unlawful to sell them to children (as well as advertise) whilst the other states either have no regulation at all or regulate somewhere between these two examples.¹⁸

In the UK, Wales is set to become the first country to ban the use of e-cigarettes in enclosed spaces which will include restaurants, pubs and working environments. Though the law is not set to be in force until 2017, it has faced surprising opposition from ASH Wales (the anti-smoking charity) along with the British Heart Foundation, British Lung Foundation and the Royal College of Physicians who have all called for further evidence of the dangers of e-cigarettes.¹⁹

Practitioners need to be wary of changes to regulations, particularly in areas where there is a justified expectation that rules will be drafted or amended. It would never be practical to ask a client to delay a sponsorship opportunity to await clarification on the law as the premium nature of sports sponsorship means that the rights holder may easily find a replacement if the client stalls. It would be prudent, however, to account for any potential regulatory change. A termination provision that would allow the parties to end the agreement in certain situations is essential, such as if advertising of the product becomes illegal. The clause should ensure that it is specific to the nature of the sponsorship, for example, if the brand is the principal shirt sponsor and e-cigarette advertising on television becomes unlawful the agreement should account for this. However, if the sponsor’s logo was only visible within the sports ground itself and not in view of television cameras (such as on the concourse) the club should arguably not be able to terminate.

Another way to tackle this issue would be to have an agreed alternative branding for if regulation changes or the team plays in a jurisdiction that bans certain product branding. The ‘Loi Evin’ (alcohol policy) rules in France state that you cannot have any alcohol advertising to do with sport. This has caused a variety of issues for clubs who play in competitions in France such as during the 2005 Six Nations when the Welsh team’s sponsor logo ‘Brains beer’ was intentionally changed to ‘Brawn’ when the teams played each other. Whether the sponsorship agreement between the parties accounted for this is unclear but it is important that practitioners can plan in advance for such an issue.