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  • Writer's pictureDarryl Seibel

What Is Rule 40 and Why Should I Care?

When we founded Stadion Sports, we did so, in part, because the conversation taking place in intercollegiate athletics today sounds very familiar to that which took place in Olympic sport all the way back in the early 1990s (yes, some of us are old enough to have been around way back then).

The challenge for Olympic sport was essentially this:

How to preserve and balance a complex ecosystem of commercial rights (crossing multiple countries) that involved the International Olympic Committee, Olympic Games Organizing Committees, Olympic Broadcasters, National Olympic Committees, International Federations and National Governing Bodies – and at the same time, open a new pathway for athletes to begin benefiting from their own commercial value (read: Name, Image and Likeness).

Sound familiar?

In 1991, the IOC introduced to the Olympic Charter (which is essentially the Rules of the Road for Olympic Sport) something called Rule 40. Rule 40 was an innovative solution that protected the value of the investment required to become an Olympic Games sponsor; preserved the commercial marketplace for broadcast rightsholders; respected the commercial rights of NOCs, IFs and NGBs – AND, opened the door for athletes to begin benefiting directly from commercial opportunities.

It was Visionary Mathematics: 1+1+1+1 = A Much Happier, Vibrant And More Viable Olympic Family.

One of the key features of Rule 40 is this: the IOC establishes a “blackout period” – generally commencing a few weeks prior to the beginning of the Olympic Games and extending until a few days after conclusion of the Games – during which participants in the Olympic Games (read: Athletes) agree to not allow his/her person, name, picture or sports performance to be used for advertising purposes.

At the same time, there are important exceptions to Rule 40 – notably for Olympic Games Sponsors, Games Broadcasters and National Olympic Committee Sponsors, who are permitted to use Games and athlete imagery in commercial programs during the blackout period (subject to IOC rules).

What does this all mean:

For the 3 years and 10 months (or so) leading up to the Olympic Games, athletes are free to construct their own endorsement deals and other NIL opportunities – working, of course, within the rights parameters of their National Governing Body (including National Team agreements), National Olympic Committee and, in some cases, their International Federation. Of course, use of the word “Olympic” and related marks and terminology is, understandably, strictly protected by the IOC and National Olympic Committees such as the United States Olympic and Paralympic Committee.

Then, during a specific period of time, the ability to leverage an official Olympic association, Olympic imagery, etc. is assigned exclusively to Olympic Sponsors, Broadcasters and National Olympic Committees (there are a few exceptions granted here, but you get the idea).

First implemented some 30 years ago, this was an innovative solution introduced by the IOC designed to create a larger pie for everyone.

As with everything in sport, Rule 40 is evolving, and the IOC and National Olympic Committees have made some significant -- and progressive -- changes that will be seen as quickly as the upcoming Tokyo Games; changes that will further benefit athletes and their personal sponsors. More on that in a future post.

For now, could this framework apply to intercollegiate athletics? We certainly think so. We think the lessons learned from international sport absolutely apply to the rapidly-changing landscape of intercollegiate athletics.

Whatever solution ultimately emerges regarding the introduction of NIL for intercollegiate athletics, the challenge is this: how best to prepare your student-athletes, athletic department and commercial partners to succeed in a world that is changing very rapidly.

Exciting times (that feel familiar).

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