Why non-Nike sportswear companies can't even Tweet the word 'Olympics'

Kate Grace peered up into the crowd. As she waltzed around the track at Hayward Field in Eugene, Ore., she scanned the over 20,000 fans in attendance for her friends and family. When she found them, a tear trickled down her face.

This was Grace’s victory lap. She had just qualified for the 2016 Olympics by winning the women’s 800-meter final at the U.S. Track & Field Trials. The 27-year-old held a water bottle and an American flag in her left hand, and a stuffed animal in her right. Sun flooded down on her. Cameras snapped.

Naturally, many of the photos they snapped ended up on social media and online. They popped up on Grace’s Instagram page, and all over Facebook.

And, crucially, they were unleashed on the various accounts and website of Oiselle, the women’s running apparel company that has sponsored Grace and her Olympic bid since 2012.

That was Monday.

On Tuesday, an email appeared in Oiselle CEO Sally Bergesen’s inbox. It was from a U.S. Olympic Committee representative. “Please act expeditiously to remove all Olympic themed information from all Oiselle promotional materials, which includes but is not limited to social media, web site, catalog and printed materials, press releases and congratulatory advertisements,” it read.

Oiselle, in its extensive coverage of the Trials, had violated the USOC’s brand usage guidelines, which prohibit companies that aren’t official USOC partners from using any Team USA or Olympic-related logos, and a long list of trademarked phrases. That list includes “Olympic,” “Olympian” and “Team USA,” but also includes “Road to Rio,” “Go for the Gold,” “Let the games begin,” and many more.

These slogans and logos were plastered all over Hayward Field, and on the bib that all athletes must wear during competition, making permissible photo usage all but impossible. That frustrated Bergesen.

“[Olympic qualification is] really the moment that the athlete and the athlete’s sponsor have been investing in for four years,” Bergesen told Yahoo Sports. “And then it’s at this point that we’re told that we can no longer acknowledge the athletes’ accomplishments.”

This all might sound ridiculous — or “overly strict,” as Bergesen puts it. It certainly frustrated Grace’s boyfriend, Patrick O’Neil, who, in a five-paragraph Facebook post, implored readers to “SHARE this post to make people aware of the behind the scenes bullying that Team USA does to the athletes chasing their dreams and the people and companies that are there for them during the years of training when no one else is.”

Bergesen and others claim that the USOC is “overreaching.” Bergesen consulted with lawyers on Wednesday to consider the prospect of challenging the USOC’s restrictions, though she admits that doing so would be “signing up for years and years and years of litigation.”

In a statement to Yahoo Sports, USOC spokesman Patrick Sandusky said: “This is standard marks protection and made in effort to preserve the value of the Olympic brand for official partners. The marks and terminology associated with the Rio Games and the U.S. Olympic Team Trials are reserved for official Team USA partners, whose generous support funds the U.S. Olympic and Paralympic teams.”

Some of the images in Oiselle’s social media posts hadn’t been taken down by Friday morning. The company has started to comply with the USOC’s request in more recent posts, though, altering photos to remove Olympic logos, and referring to the Olympics as “the Big Event in the Southern Hemisphere.” The company has also directed followers to the accounts of employees and athletes, who are permitted to post without restriction.

Other companies, meanwhile, accept the restrictions, and find creative ways to circumnavigate them. Under Armour, which sponsors Michael Phelps and isn’t the official USOC partner (Nike is), sent out this tweet after Phelps’ final race at the U.S. Olympic Swimming Trials:

Other large brands like Adidas and New Balance, create similar, necessarily ambiguous marketing campaigns that, when timed right, promote their athletes and their accomplishments without explicitly referencing the Olympics.

That’s because the federal act on which the USOC’s restrictions stand — the very act that Oiselle would be challenging — has consistently held up in U.S. courts. It most recently held up when Run Gum, a company owned by Olympian Nick Symmonds, brought an antitrust lawsuit against USA Track & Field (USATF) and the USOC. It alleged that the branding restrictions violated federal antitrust law. The suit was dismissed by a district court judge.

The act in question is the Amateur Sports Act of 1978. It was revised in 1998, and is commonly known as the Ted Stevens Act. It grants the USOC the right to file civil action against any non-partner that “uses for the purpose of trade, to induce the sale of any goods or services, or to promote any theatrical exhibition, athletic performance, or competition… any trademark, trade name, sign, symbol, or insignia falsely representing association with, or authorization by, [the committee].”

Essentially, it prohibits exactly what Oiselle did on Monday.

And there’s a reason it does. It protects the exclusivity of the USOC’s sponsorship deals, making partnerships far more valuable to bidding companies. It’s why Nike’s unprecedented 23-year contract with USATF is reportedly worth between $450 million and $500 million in cash and goods. It’s why the company’s USOC deal through 2020 has an estimated $12 million-$15 million worth, and why the USOC brought in $95 million from “marks rights income” (sponsorship deals) in 2014.

The Ted Stevens Act is unique. That’s because the United States’ Olympic committee funding system is unique. Nearly all Olympic committees worldwide are government subsidized. The USOC, however, receives no government funding. Instead, the government passed the Ted Stevens Act to allow the USOC to negotiate exclusive sponsorship deals and essentially to increase the USOC’s ability to fund itself.

So instead of putting taxpayer dollars towards facilities, travel, athlete stipends and the like, the USOC is using Nike’s money — and Coca Cola’s money, and Visa’s money, and Samsung’s money, and McDonald’s’ money. And, of course, the money of NBC, the broadcast rights holder.

In 2014, the USOC brought in $111.2 million from “broadcast rights and related interest income,” the aforementioned $95 million from sponsorships, and $8.9 million from “licensing-royalty income” (merchandise deals). Its total 2014 revenue of $278.7 million will likely be dwarfed by 2016’s number.

The issue is that even those hundreds of millions of dollars are insufficient to fund the thousands of American athletes who train and compete for the Olympics. The vast majority of athletes that will travel to Rio — not to mention those who don’t qualify — don’t make a living in their sport, and the stipends from the USOC are relatively meager.

Over the last Olympic cycle, from 2009-2012, only 10.3 percent of the USOC’s expenses went directly to athletes. That doesn’t include the tens of millions that go indirectly to athletes through health insurance, equipment, travel expenses and much more. The USOC’s 2014 financial statement lists $52.9 million in grants to the national individual sport governing bodies, which trickle down to the athletes. But it lists just $15.9 million in athlete grants.

In turn, hundreds of Team USA members turn to outside sponsorships from non-USOC partners, and to crowdfunding sites like GoFundMe and RallyMe to raise hundreds of thousands of dollars.

It’s not as if this personal fundraising wouldn’t be necessary in the absence of the Ted Stevens Act and the USOC’s regulations. But what they do is diminish sponsorship income from smaller companies who might be interested in supporting lower-profile athletes.

These restrictions don’t affect the top athletes; Nike will still offer lucrative contracts to high-profile Olympians in glamorous sports, and will promote their Olympic exploits. Other major brands like Adidas and Under Armour will have to outbid the official USOC partner for the marketable stars.

But up-and-coming athletes, and those in less popular sports, must look to smaller brands. Grace, for example, who had struggled with injuries and never won a national race, latched on with Oiselle. The value of these deals is depressed by the USOC’s stringent restrictions, because the companies can’t explicitly market their athletes’ involvement in the Olympics.

“Not only is it robbing us of that moment,” Bergesen said, “but it’s robbing that athlete of the ability to put value on that moment, and increase their earning potential.”

It’s not just these “brand guidelines” either. The infamous “Rule 40” imposes a sort of Olympic sponsorship blackout. Throughout the month surrounding the games — July 27-Aug. 24 for Rio — athletes and their non-Nike partner brands are forbidden from even acknowledging each other.

Bergesen claims that the rules discourage companies similar to hers from striking deals with athletes and supporting them financially, because they know they can’t profit off the exposure the Olympics, and that moment in the proverbial sun, offer.

“There’s a really poor return on investment in putting so much time and money and effort into building up the stories of these athletes,” Bergesen said. “It doesn’t really make sense when you pencil it out.

“We want track-and-field athletes to be able to make a living. There’s a reason, we feel, why the average income of track-and-field runners is so low, and it’s because of this system that really discourages small businesses from being involved.”

Unfortunately for Bergesen and Oiselle, there’s not much they can do. A lawsuit would likely lack legal standing, and there’s a reason the law is written the way it is.

But that won’t stop them from clamoring for changes to a system they feel is unjust — unjust to companies like Oiselle, and unjust to runners like Grace who need additional funding to pursue their Olympic dreams.