Image rights are an increasingly important topic in the football business. The total value of image rights in football is continuously increasing. Brands and sponsors are paying big sums to exploit the image rights of players. In transfer discussions between players and clubs, image rights and their exploitation have become one of the more complex and delicate negotiation points. Clubs and players are trying to have as much control as possible over the image rights of the players.
This article provides a brief background on what image rights are and what you as a football player should take into account when dealing with image rights.
What are image rights?
From a legal point of view, image rights mean the right to use someone’s name, reputation, performances, promotional services or image (or any right or quasi-right associated therewith) for any commercial purpose.
Who owns the image rights?
Image rights belong to the football player and cannot be exploited or transferred without their prior consent.
Why are the image rights so important?
Football players are becoming more and more popular on a global scale. Fans want to be associated with the players’ success and image. Footballers’ faces or images sell products (shirts, pictures, …) across the world and make huge amounts of money for their club and their brand sponsors.
Real Madrid estimated that David Beckham’s total contract value was recouped in the first six months of his stay in Madrid. And this on his shirt sales alone. During his contract in Madrid, merchandising profits increased by a staggering 137%.
Clubs are therefore not only interested in registering the player so that he can play for their club but also in the exploitation of the player’s image. The party controlling or owning the image rights gets paid for this exploitation.
Therefore it has become crucial for a top player to have control over his own image rights. By doing so, you will be guaranteed that, on top of your income as a player, you will also generate a substantial commercial income.
This battle between clubs and players over the player’s image rights is not to be underestimated and has become big business. Especially in the UK, the image rights can be very valuable.
Why should I care about image rights in transfer negotiations?
One actor involved in the football business explained it as follows: “The FA player’s contract, if signed without modification, means you are signing away most of your rights to income outside of football, which can be substantial”.
As a football player, a club will pay you a fixed wage, some bonuses and some other advantages in kind (apartment, car,…). This will be agreed in the labour contract. Nowadays labour contracts also deal with image rights. Sometimes it will be just one paragraph, but in the UK the standard contract goes slightly more into detail on image rights. When the image rights have a substantial value, the club and the player enter into a separate image rights agreement. This agreement deals with the rights and the obligations of the club as far as the use of the player’s image rights is concerned.
In general a distinction should be made between three categories of image rights:
• The image rights linked to the football player in his capacity as a private person;
• The image rights linked to the football player in his capacity as a national team player;
• The image rights linked to the football player in his capacity as a club player.
If you do not pay sufficient attention to the provisions in the labour contract and the image rights contract, you may transfer all the abovementioned rights to the club. Ideally, however, you only transfer (part of) the image rights in respect of your capacity as a club player within your club. The other rights should be controlled by you and you alone.
Obviously the club will include in the image rights agreement that the player cannot use the image rights linked to his personal capacity in a way that it damages the rights of the club. By way of example, you cannot expect a club to accept that your personal brand sponsor is Coca Cola while your personal sponsor is Pepsi (although it happens).
It is therefore essential that you have these clauses fine-tuned by a specialist as all your other existing agreements related to image rights (such as private sponsorship agreements, agreements of the national team,…) should be taken into account when negotiating an image rights deal with a club. It is important that these agreements are perfectly aligned.
Image rights companies?
A lot of players make use of so-called image rights companies. These structures are in general companies to which the image rights have been transferred. These companies take care of the exploitation of the image rights.
The main reason why this is being done is because of the fact that the tax rate to which companies are subject is lower than the tax rate for individuals (hence you pay less taxes on the income of your image rights in a company).
It should be noted that these image rights structures are being attacked and looked into by tax authorities in several countries. Especially in the UK and Spain the use of these image rights structures have been under fire and the use of image rights structures has certain limits.
Do not enter into an image rights structure without independent advice. A lot of accountants and lawyers push these structures but it is not always useful (and in some cases it is even burdensome).
Conclusion
In certain European countries the image rights represent a substantial commercial value for the players. It is therefore important to keep maximum control over these rights. Whenever you are being asked to sign a contract, which is related to your image rights, you should definitely have it checked by a specialist. If not, you risk losing control over a possibly substantial source of income.
