Rights grab or not?

[amin]

I was recently approached by a company that offered to sponsor a photo contest on my site with some nice prizes but stated that as part of the contest, they would retain the non-exclusive rights to use the winning image (but not other entries) in an advertisement for their own product if they choose.  It will not be distributed to others, or employed for any other use.

If I were to go ahead and have the contest, making the above conditions very clear and prominent, would this constitute a "rights grab"?  Would it be unethical and/or controversial?

[wolfnowl]

Well, it's a lot more liberal than some contests that, provided you pay them to enter, retain the right to use your work forever in whatever way they want.  As long as you plainly state the 'rules' people are welcome to submit entries or not.

Mike.

[PeterAit]

I don't think so. As long as the rights situation is explained clearly and not in 2 point font, people can enter or not as they choose.

[Les Sparks]

Sounds like a reasonable requirement for the winning photo.   Of course how reasonable the requirement is depends a lot on the prize. If you'd be willing to enter a contest with a similar requirement and prize,  then it should be OK.
As others have said, just make sure that the requirement is up front and not in mice type.
Les

[amin]

Thanks all.  Very helpful!