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Spotlight: organization and marketing of sporting events in Hungary

By September 8, 2022September 11th, 2022Sports events

All the questions

Marketing of sports events

i Types of rights and ownership of rights

The Sports Act expressly sets out the sports-related rights that can be exploited and defines who owns them. Rights can be divided into three main categories, as shown in the following table.

Sports law Right holder
Event right (i.e. the announcement, organization and conduct of sporting events (championships)), including the licensing of online betting rights, as well as related rights at national team competitions (matches) Sports federation (and clubs in special cases regarding the licensing of online betting rights)
Monetary rights related to the athlete’s sporting activity (such as the athletes’ likeness, name, logo, goodwill and other intangible assets) Athlete or, in the case of a membership or contract with a club, the club where the pecuniary rights of the athlete are automatically transferred to the club
Commercial licensing, transmission, broadcasting and recording of sports activities and sports competitions via television, radio and other electronic means (e.g. Internet) Athlete or, in the case of a membership or contract with a club, the club where the pecuniary rights of the athlete are automatically transferred to the club

No transfer of ownership of the aforementioned rights is possible. Therefore, licensing is the common way to conclude various agreements on the use of sports rights.

ii Protection of rights

Rights holders can, in practice, rely on the following different forms of legal protection.

Media rights

In terms of broadcasting, recording and transmission of sporting events, rights holders can rely on copyright protection. The sports performance itself is not copyrighted, but parts of its broadcast are, as is the broadcast signal. Remedies based on ownership or exclusive use of the site in combination with the terms and conditions when purchasing tickets could physically prevent violators from accessing the sports site. The eventual right is a unique property right and enforceable against any infringer. The significance of broadcast rights infringement has not been significant in practice so far, as the most popular Hungarian sports can be watched on free-to-air TV channels or are freely available

Personal rights

Athletes, clubs and federations can count on the protection of trademarks, copyright, deception and personal rights if their images, logos or other pecuniary or personal rights are violated.

Online betting rights

The licensing of online betting rights is part of event law, and federations and clubs are likely to invoke and enforce this law against online betting service providers if they offer online betting on matches of federations and clubs without their consent.8

The Sports Act and other laws do not provide specific sports-related enforcement procedures for violations. Therefore, stakeholders must assert their rights before a court or an arbitral tribunal. If the relevant rights holder claims damages in tort, they must prove that:

  1. he has suffered damage as a result of the activity of the counterfeiter;
  2. the infringer acted in bad faith; and
  3. there is a causal relationship.

iii Contractual provisions for the exploitation of rights

The Sports Act gives an express definition of sponsorship and merchandising agreements. The use of the athlete’s name or likeness by any sports organization is subject to the prior written consent of the athlete. In practice, sponsorship and merchandising agreements address the scope of image transfer or logos to be licensed, meet and greets, and other public conduct obligations in addition to the usual exclusivity provisions.

The Sports Act expressly regulates the joint sale of media rights. Sports federations, on behalf of clubs and athletes, are authorized to commercially exploit the media rights of the competitions they organize for a specified period and to enter into an agreement or agreements on their exploitation. In return for allowing sports federations to retain the right to exploit media rights, the Sports Act obliges sports federations to pay athletes and clubs an appropriate consideration. The amount of this consideration must be determined in advance and equal to the market value of the broadcasting rights. The further distribution of the money generated by the joint exploitation of media rights must be based on criteria defined in the Sports Act. In practice, most relevant contractual provisions of media rights agreements grant the following:

  1. exclusivity to the licensee (rights, duration, platform and territory);
  2. access to the place;
  3. the quality, supply, distribution and ownership of the signal, content and associated copyrights;
  4. dissemination and sub-licensing of created content;
  5. marketing of sports sites;
  6. the methods of selection of matches by the broadcaster; and
  7. payment or compensation mechanisms for the granting of rights.

In practice, it is important that all rights exploitation agreements take into account the internal relations of sports actors at all levels of the sports pyramid model in order to avoid any conflict between the different licensing agreements.