Footballer Image Rights: How Do They Work?
You’ve probably heard the term “image rights” in recent years. This concept has caused complicated disagreements between clubs and players, including scandals and advertising disagreements. Footballer image rights may appear to be a novel concept. However, they became popular in the Premier League in the 1990s as a result of the influx of top foreign players joining league clubs.
Many of these players previously played for their clubs, and agents who recognized the value of this structure began to advocate for it for all of their clients. Dennis Bergkamp, Patrick Viera, and David Platt were the first players in England to strike such deals.
What are Footballer Image Rights?
First, we’ll define what the term “image” means. This is more than just the player’s physical appearance., but also his name, nickname, voice, signature, squad number, or brand. For example, ‘CR7,’ as well as all other player-specific characteristics. When a club has superstar players who are well-known around the world, these players can be used to promote their new kit and merchandise. Also included are products from the club’s sponsors. When you think about it, football clubs benefit greatly from using their players in advertisements, which increases their revenue and brand exponentially. It’s understandable that the players want a piece of the action, particularly when their own image, personality, and brand are being used.
As a result, footballer image rights are now a big deal. Football has evolved into a global product, and elite players now have celebrity status more than ever. Cristiano Ronaldo, for example, is the most followed Instagram user in the world, with 241 million followers. The 2018 FIFA World Cup was watched by more than half of the world’s population. PSG also made around €1 million by selling Neymar jerseys on the day the player was introduced to the club. He’d never even played for the French club. In fact, the top footballers will make more money from commercial streams than they will from their clubs. Given that they can earn anywhere between $250,000 and $900,000 per week is astounding but not surprising given their global influence.
Football clubs that want to use their players’ images for commercial gain must now agree on and sign image rights agreements.
How Footballer Image Rights Deals Work
Deals for footballer image rights are not included in a player’s salary agreement or contract. However, they are entirely distinct. To avoid disagreements, the contracts must be very specific about which aspects of the player’s image the club can and cannot use. It is almost never an agreement between the club and the player. Rather, it is a contract between the club and a third-party company set up by the player or their representatives. If the image of the player has independent commercial value, the player will then frequently seek to establish an image rights company (IRC) and assign their rights to the IRC.
The IRC then exploits the player’s image rights and negotiates the best deal for the player with the club. Image rights contracts are entered into by their IRCs and clubs or sponsors and will frequently include not only a licence of a player’s intellectual property rights but also the agreement of a player to endorse or use a sponsor’s product and to make personal appearances, such as in sponsor advertising.
Why is a Separate Company used for Footballer Image Rights Deals?
It not only simplifies things to keep image rights out of the main playing contract, but it also provides financial benefits to the player. The IRC’s income is taxed like any other income but at the corporation tax rate of 19%. If a player pays a 45% tax on their personal income, would they end up paying a lot more tax on those earnings if image rights were paid directly to the player? It is debatable whether this is acceptable.
HMRC has investigated image rights agreements reached between players’ IRCs and clubs, particularly with overseas structures, claiming that they are merely ‘disguised remuneration’ subject to PAYE and National Insurance Contributions. The use of offshore registered IRCs where corporation tax is even lower is being questioned around the world. Lionel Messi was sentenced to 21 years in prison on a suspended basis for tax evasion related to image rights payments.
Other Issues with Footballer Image Rights Deals
Aside from the tax implications, footballers’ image rights deals can become complicated when there are conflicts of interest between their own sponsorships and the sponsorships of their clubs. Most Premier League clubs have more than 60 commercial partners, all of whom want to use images of famous players in their advertising. Players are also sponsored by boot companies, clothing companies, perfume companies, and even food/drink companies and banks. The players will almost certainly have ties to direct competitors of the club’s sponsors.
Mourinho, Cars & Watches
This also occurs with managers, such as when Jose Mourinho joined Manchester United. Mourinho is sponsored by the car manufacturer Jaguar and the watchmaker Hublot. Man United was sponsored by Chevrolet and Bulova at the time, so this was a problem for the club. Mourinho’s personal sponsors forbade him from wearing a Bulova watch or promoting Chevrolet. Man United, on the other hand, would lose revenue if their big-name manager couldn’t work with their sponsors. These types of conflicts necessitate lengthy and drawn-out negotiations between the two conflicting parties in order to reach a fair agreement.
Paulo Dybala’s ‘Star Image’ Conundrum
These difficult and complicated negotiations can exacerbate existing issues. You may recall that it appeared recently that Tottenham Hotspur would sign Paulo Dybala. The deal appeared to be genuine, having been agreed just before the transfer deadline, but it ultimately fell through. According to reports, the image rights agreements were part of the negotiations that led to the deal’s demise. A company called ‘Star Image’ owns Dybala’s image rights. The company was not formed solely to own Dybala’s image rights, implying that Dybala and his team of representatives did not have complete control over the company.
As a result, Star Image would handle all of Dybala’s personal sponsorships, which would entail him earning money for the company by appearing in advertisements and other promotional activities with his sponsors, Adidas and Gatorade, among others. Spurs, who are sponsored by AIA and Audi, may have ensured that their players cannot endorse another insurance company or car manufacturer, even in a personal capacity.
Dybala’s image rights company was probably looking for compensation for lost commercial opportunities, whether it was lost future partnerships or having to cancel pre-existing image deals.
To use such rights, the club would have needed to reach a commercial agreement with the marketing company. It’s possible that the marketing company placed a much higher value on those rights than the club, requiring more compensation than Spurs thought was fair. Image rights agreements don’t help, and they add to the list of negotiations that must be considered. In most cases, the player establishes and owns the image rights company, giving them complete control. However, in the unusual case of Dybala, he did not control the company.
Overall, footballer image rights are a complicated aspect of elite player contracts and club agreements. It is debatable whether this is a good thing. Footballers are now celebrities who can generate substantial revenue for a club.
Some people would certainly believe that a club signed a specific player simply to increase their revenue globally or even in a specific country. Image rights licenses demonstrate not only that football clubs are run like businesses but that players, or at least their agents, are maximizing their value, building their own brand, and interested in money-making opportunities outside of simply playing the game.
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