In light of recent highly publicized cases of Foreign Corrupt Practices Act (FCPA) violations by U.S. companies, prominent global law firm Foley & Lardner LLP, and SpotlightTMS (www.spotlighttms.com), the leader in sports and entertainment ticket management, have released a white paper entitled, “Avoiding Legal Pitfalls in Sports and Entertainment Marketing.”
The paper, available for downloading here at no charge, addresses best practices for complying with FCPA, Securities & Exchange Commission, Internal Revenue Service and Sarbanes-Oxley regulations governing the use of sports and entertainment assets.
It is estimated that U.S. companies spend approximately $16 billion a year on sports and entertainment tickets, suites and sponsorships. Without a centralized, transparent tracking system, organizations risk steep fines, tarnished reputations, stock losses and even criminal prosecution if these assets are used improperly.
The white paper, written by David W. Simon, partner, and John Wynn, associate, both of Foley & Lardner LLP, illuminates the fine line between legitimate corporate entertaining -– a practice used by the vast majority of Fortune 1000 companies to generate sales and retain customers – and those activities that can create a significant compliance liability.
While topically focused on the FCPA, the paper’s suggested best practices are applicable to both domestic and international regulations governing the use of sports and entertainment assets, and other gifts of monetary value. The paper notes that payments or “anything of value” defined by the FCPA can include the payment of travel expenses or other entertainment not customary to a business transaction. This can include event tickets, golf outings and sports-related corporate booster activities.
“Violations of the FCPA can not only lead to fines and penalties in the millions, they can also result in criminal prosecution,” Simon said. “To avoid such consequences, corporations are wise to develop internal compliance programs to detect and prevent any improper payments by their employees and agents. Companies needn’t stop hosting business clients and associates at sporting events, but they need to take affirmative steps to ensure that meals, corporate travel, entertainment, gifts and other business entertainment activities are conducted in accordance with the requirements of U.S. and global anti-corruption laws.”
“Savvy companies use sports and entertainment events as an integral tool in their marketing mix to build relationships and generate sales,” said Tony Knopp, CEO and co-founder of SpotlightTMS. “But in the absence of a centralized system to manage and track the use of these assets that goes beyond simple expense account reporting, it’s far too easy to run afoul of compliance regulations, even inadvertently. We partnered with Foley & Lardner on this white paper to help companies understand the importance of implementing management and compliance programs to avoid hefty penalties and possible criminal prosecution, while enabling them to continue using tickets, luxury suites and other business entertainment to drive revenue.”
Although it does not provide legal advice, the paper includes ten protocols companies should consider in travel and expense management when providing gifts (including tickets and luxury suites), meals, entertainment, and travel when entertaining clients at sports and entertainment events.
About Foley & Lardner LLP
With approximately 900 attorneys in 21 offices, Foley & Lardner LLP provides award-winning business and legal insight to clients across the country and around the world. Our team-based approach, innovative technology, and focus on value and client service are continually recognized by our clients and the legal industry. In a recent survey* of Fortune 1000 corporate counsel, Foley received a top five ranking out of more than 300 firms for delivering exceptional client service. In addition, Foley received 19 national first-tier rankings on the 2011 – 2012 U.S. News – Best Lawyers® "Best Law Firms" list, and CIO magazine recognized Foley for technological innovation that enhances business value by naming the firm to its prestigious CIO-100 list in 2011. Learn more at Foley.com.
Foley’s FCPA Practice is among the oldest and most experienced in the field. Featuring former federal prosecutors, regulatory enforcement staff, and international trade specialists, Foley’s FCPA Practice provides a complete range of services, including FCPA counseling, compliance programs and training, due diligence reviews for international joint ventures and acquisitions, internal investigations, and representation before regulatory law enforcement agencies. Additional information is available at http://www.foley.com/fcpa-anticorruption/.
SpotlightTMS (www.spotlighttms.com) is an enterprise SaaS provider that enables companies to maximize the business impact of sports and entertainment ticket investments while maintaining compliance standards. Its SpotlightTMS™ application is currently in use managing millions of dollars in entertainment investments by companies that want to manage their entertainment asset investments in a simple, transparent way. SpotlightTMS includes a business impact engine that allows companies to drive and measure direct business outcome, such as ensuring utilization, assessing sponsorship effectiveness and measuring ticket use as a driver of revenue. The company is based in Calabasas, Calif.