Image rights is probably a phrase you have heard in recent years. Causing complicated disagreements between clubs and players, including scandals and disagreements in advertising. Footballer image rights may seem like a new thing. But they became popular in the Premier League in the 1990’s due to the influx of top foreign players joining clubs in the league.
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Many of these players had them at their previous clubs. And agents who were aware of the value of this structure began to push for them for all of their clients. The first group of players to negotiate these types of deals in England were Dennis Bergkamp, Patrick Viera and David Platt.
What are Footballer Image Rights?
Firstly, we’ll define what is meant by the ‘image’. This is not just the physical appearance of the player. But his name, his nickname, his voice, his signature, even his squad number and brand. For example, ‘CR7’, and all other characteristics unique to the player. When a club has superstar players known across the globe. They can use these players to promote their new kit, merchandise. And even the products from the sponsors that are associated with the club. If you think about it, football clubs benefit from using their players in advertisements, boosting their income and brand exponentially. It’s fair that the players want to get a piece of the pie. Especially when it is their own image, personality and brand being used.
So, for this reason, footballer image rights are now a big deal. Football has grown into a global product and more than ever, elite players have celebrity status. For example, it is a footballer who is the most followed Instagram user in the world; Cristiano Ronaldo with 241 million followers. Over half of the world population watched the last FIFA World Cup in 2018. And PSG earned approximately €1 million by selling Neymar’s jerseys on the day the player was presented at the club. Before he had even played a game for the French club. In fact, the footballers at the top of the game will make more money from commercial streams than the wage from their clubs. Considering they can earn anything from $250,000 – $900,000 per week. That is pretty astonishing, but considering their global influence, not surprising.
Football clubs who want to use their player’s image and exploit it for commercial gain. They now need to agree and sign image rights deals.
How Footballer Image Rights Deals Work
Footballer image rights deals are not included as part of a player’s salary agreement and contract. But are in fact completely separate. The deals need to be very detailed in exactly what part of the player’s image the club can and can’t use to avoid disagreements. It is usually not an agreement between the club and the player at all. Rather between the club and a 3rd party company, set up by the player or their representatives. If the player’s image has independent commercial value.Then the player will often seek to create an image rights company (IRC) and assign their rights to the IRC.
The IRC then exploits the player’s image rights and negotiates with the club to create the best deal for the player. The image rights contracts are entered into by their IRC’s and clubs or sponsors, and will often not just be a licence of player intellectual property rights, but also includes the agreement of a player to endorse or use a sponsor’s product and to make personal appearances, for example, in sponsor advertising.
Why is a Separate Company used for Footballer Image Rights Deals?
Not only does it make things a lot simpler to keep image rights out of the main playing contract, it also provides financial benefits for the player. The income made by the IRC is taxed, just like any income, but at the rate of corporation tax which is 19%. A player plays 45% tax on their personal income, so if image rights were paid directly to the player, they would end up paying a lot more tax on those earnings? Whether this is acceptable is debated.
HMRC has scrutinised the image rights deals reached between players’ IRCs and clubs, especially with overseas structures, claiming that these are simply ‘disguised remuneration’, which should be subject to PAYE and National Insurance Contributions. The use of offshore registered IRC’s where corporation tax is even lower is something that is questioned worldwide. Lionel Messi was handed a suspended 21-year prison sentence for his evasion of tax related to payments received from image rights.
Other Issues with Footballer Image Rights Deals
Besides the tax implications, where footballer’s image rights deals can become troublesome is when there are conflicts of interests with their own sponsorships, and their clubs’ sponsorships. Most Premier League clubs have in excess of 60 commercial partners, all seeking the right to use images of high-profile players in their advertising. Players also have their own personal sponsorships, from boot deals, clothing, perfumes, and even food/drink companies and banks. The chances are that the players will have ties to direct competitors to those of the club’s sponsors.
Mourinho, Cars & Watches
This also happens to managers, for example, when Jose Mourinho joined Manchester United. Mourinho is sponsored by car manufacturer Jaguar, and watch company Hublot. At the time, Man Utd were sponsored by Chevrolet and Bulova, so this was an issue for the club. Mourinho’s personal sponsors would not allow him to wear a Bulova watch or promote Chevrolet. On the other hand Man Utd would miss out on revenue if their big-name manager couldn’t work with their sponsors. These types of conflicts require sometimes long and drawn out negotiations to come to a fair agreement between the two conflicted sides.
Paulo Dybala’s ‘Star Image’ Conundrum
These difficult and complicated negotiations can cause even more problems. You may remember recently when it looked as if Tottenham Hotspur would sign Paulo Dybala. The deal looked genuine and agreed just before the transfer deadline, but ultimately fell through. It was reported that part of the negotiations that caused the breakdown of the deal were the image rights agreements. Dybala’s image rights belong to a company called ‘Star Image’. The company wasn’t exclusively set up for the purpose of owning Dybala’s image rights, meaning there wasn’t total control over the company for Dybala and his team of representatives.
Star Image would therefore arrange all of Dybala’s personal sponsorships, meaning he would be required to make money for the company by appearing in advertisements, and other promotional activities with his sponsors, Adidas, Gatorade among others. Spurs may have ensured that their players cannot endorse another insurance company or car manufacturer, even in a personal capacity, as Spurs are sponsored by AIA and Audi.
It is likely that Dybala’s image rights company wanted compensation for the lost commercial opportunities, either lost future partnerships or the fact that they’d have to cancel pre-existing image deals.
The club would have needed to come to a commercial agreement with the marketing company to use such rights. It may have been that the marketing company valued those rights much higher than the club, in other words, wanted a higher amount of compensation than Spurs thought was fair. Image rights deals certainly don’t help this and they add to the list of negotiations that have to be considered. In most cases, the player themselves set up and own the image rights company, so they have complete control. However in the rare case of Dybala, he did not have the control of the company.
Overall, footballer image rights are a complex aspect of elite player contracts and agreements with clubs. Whether this is a good thing can be debated. Footballers are now celebrities and can create serious revenue for a club.
Whether a club has signed a particular player simply to boost their revenue worldwide, or even perhaps in a particular country, is something that some people would certainly believe. Image rights licences highlight not only that football clubs are run like a business, but that the players in the game, or at least their agents, are maximising their value, building their own brand, and interested in the money-making opportunities away from simply playing the game.
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