A sporting challenge

By Sachin Kerur, Pinsent Masons
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Major sports event are a boon for infrastructure, but as Sachin Kerur of Pinsent Masons explains, they also present unique difficulties

With the Delhi Commonwealth Games behind us, the eyes of the sporting world are once again on the subcontinent during the ICC Cricket World Cup.

Whatever the final verdict on the Commonwealth Games, it is clear that the significance of major sporting events is increasing and more cities and countries want to get involved. These events can promote tourism, provide a sports and business legacy and underpin a city’s rebranding exercise. India will no doubt host an international sporting event again, and if lessons can be learned from the Commonwealth Games with regards to the commercial and legal issues needed to ensure successful delivery, then that will be an achievement.

Sachin-Kerur-Pinsent-Masons
Sachin Kerur

Laws and regulations

While there is a need to comply with the laws and regulations of the host country, there may also be a need for the host to introduce enabling legislation. For example, the London Olympic Games and Paralympic Games Act, 2006, was introduced for the 2012 Olympics. This act set up the Olympic Delivery Authority, which will deliver the new venues and infrastructure for the games, granted the mayor of London specific powers and also dealt with advertising and marketing issues.

In addition, the host and its legislative framework must accommodate and follow the extensive international laws and regulations relating to the particular event. For example, both the International Olympic Committee and Commonwealth Games Federation have their own charters and conditions to regulate games.

At a very early stage, the sports organizers need to work out whether a committee or some form of corporation will deliver the event and what its legal status will be for entering into contracts. The experience of Delhi shows that whatever entity is chosen, it needs to be able to make rapid decisions and have proper authority over the delivery of the sporting event.

Realistic timescales

Organizers of major sporting events should be realistic about the work involved and the time it will take. It is important that the legal procedures are put in place as soon as a bid has been successful. In order to realize this, the first six months following the successful bid should be devoted to drafting robust policies and procedures. This will ensure that all parties involved are appropriately contractually regulated, properly costed and compliant with all of the organizational and legal requirements.

Commercial rights

A substantial part of the costs of a sporting event are met through the sale of media and sponsorship rights. This is a highly specialized area that involves dividing the rights into separately saleable packages. Specialist advice on the increasingly complex definitions of these packages is vital so there is no risk of unintended overlap. It is crucial that the event sponsors receive maximum returns.

Trademarks and domain names need to be registered in relevant territories very early on, and lawyers appointed, so that cease and desist letters can be issued swiftly when required. Sponsors will also expect to be protected from “ambush marketing” whereby non-sponsors create an impression that their brand is linked to the event.

Transport

Ensuring that the transport infrastructure is in place is imperative. It is often one of the biggest investments, but one which should leave a lasting legacy. The 2010 FIFA World Cup in South Africa resulted in the Gautrain Rapid Rail Link a project Pinsent Masons advised on which created numerous jobs and provided a transport infrastructure which is already benefiting the local region and country. Likewise, Delhi is clearly benefiting from the fabulous facilities at the new international airport development.

If improvements to airports, rail and road infrastructure are needed, an appropriate procurement strategy needs to be put into place to ensure that the work is completed on budget and on time.

Construction of venues

These days host countries do not want to build venues and then simply leave them as white elephants. Decisions will need to be made as to whether existing venues can be adapted, whether new venues should be permanent or temporary and how the facilities can be used once the event is over. The usual construction issues will arise, but as facilities for any major sporting event cannot be completed late and additional funding is likely to be limited, all parties should avoid any contract variations post-contract stage.

Sustainable development

The legacy of an event is now almost as important as the event itself. Therefore, effective long-term planning for the use of the facilities is critical. Environmental concerns are also important. The demolition and re-construction of Eden Park in New Zealand, location of the 2011 Rugby World Cup and the 2015 Cricket World Cup, where 90% of the wood, steel and concrete will either be reused or recycled is typical of this focus on sustainable development.

Health and safety

Health and safety issues are also crucial. Failings in the design, construction and maintenance of a sports facility, or the operation of the event, crowd management or fire escape and control measures could all lead to multiple fatalities. The result could be fines or even imprisonment, as well as adverse publicity. Event organizers therefore need to seek specialist advice and plan their systems and procedures so as to reduce the chances of facing these liabilities.

Sachin Kerur is a partner and head of the Dubai office of Pinsent Masons. He has over 16 years’ experience in advising governments and the private sector on the procurement of large-scale and complex infrastructure. He can be contacted at [email protected]