Legal battles for sponsorship exclusivity: The cases of the World Cup and NASCAR

Abstract

Theorists have emphasized brand differentiation in achieving a competitive advantage through sponsorship, and managers of sports sponsorships have recognized product category exclusivity as among the most valued rights afforded sponsoring firms. Yet the proliferation of sponsorships in the sports marketplace poses a challenge to sponsors attempting to establish a unique brand position apart from the clutter. The competition between corporate rivals for sponsorship exclusivity in the world's highest profile sporting arenas has begun to spill into the courtroom. The purpose of this paper is to review the cases of MasterCard versus FIFA, and AT&T versus NASCAR, and discuss the relevance of these contract disputes to sponsorship scholars and practitioners. Specifically, the courts’ finding of irreparable harm faced by the excluded sponsor offers an intriguing legal recognition of the theorized goodwill and inimitability of corporate affiliation with a specific sponsored enterprise. The cases also contribute an opposing view of best practices, where legal ramifications arise from treating sponsorship as a property-based resource and neglecting the relational dimensions of collaborative communication, trust, and commitment emphasized by contemporary sponsorship theory.

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