Footballers, Brands and the Battle for Image Rights: Lessons from the UK

Football’s global reach has made its players brands in their own right, and their names, likenesses and signature styles carry real commercial value. In this 2013 paper, Aahna Mehrotra, founder of AM Sports Law & Management Co., examines how image rights developed in the United Kingdom, how clubs and players exploited them, and the regulatory and tax questions that followed.

Protecting image without an image right

Image rights are an individual’s right to control the commercial use of their name, image, likeness or style. The United States protects them through state right-of-publicity laws, and France and Germany through their civil codes. The UK, like Australia, has no specific right, and protection has developed through other routes: breach of confidence and privacy under Articles 8 and 10 of the European Convention on Human Rights (Douglas v. Hello!, and Campbell v. MGN in 2004), the Data Protection Act 1998, advertising codes, trade marks (Tiger Woods registered his name for golf goods) and passing off. In Irvine v. Talksport (2002), Formula One driver Eddie Irvine succeeded in a false endorsement claim over a doctored photograph, with damages raised to £25,000 on appeal, and the case gave sports stars a recognised commercial interest in their image.

Clubs, players and commercial value

Real Madrid brought image rights into football in 2000 when it signed Luis Figo together with his image rights, and followed with Zidane, Ronaldo and Beckham. Beckham’s Real Madrid contract reportedly gave the club half of his new endorsement income, Adidas created a dedicated Beckham logo, and sales of personalised Beckham shirts rose sharply. By 2006 he was earning far more from endorsements than from playing. In 2003 the standard Premier League contract was amended to address image rights, with obligations on players to take part in club promotions and a provision giving effect to separate image rights contracts.

The gap in Financial Fair Play

UEFA introduced Financial Fair Play after clubs ran up large losses; a Deloitte study reported in 2009 that Premier League clubs owed £3.1 billion between them. The rules restrain spending and so, indirectly, salaries, but they did not say whether payments for image rights count, which allows players to be paid substantial sums outside any cap. Differences in tax rates across Europe add a further complication to transfers.

Image rights and tax

Players commonly assigned their image rights to companies they owned, often offshore, and clubs paid those companies a licence fee alongside the player’s salary. The structure took the image payment outside income tax at rates of up to 50% and outside National Insurance, with corporation tax of 28% applying instead. In Sports Club, Evelyn and Jocelyn v. HM Inspector of Taxes (2000), concerning Dennis Bergkamp and David Platt at Arsenal, the Special Commissioner held the arrangements to be genuine commercial agreements for players of international standing whose image the club intended to exploit, and in doing so treated image rights as capital assets. HMRC’s focus since has been on proportionality, meaning whether the sum paid reflects the real value of the player’s image. It has extended its scrutiny to cricket and rugby, and reached a 15% compromise cap on image payments with rugby union.

What the paper recommended

The paper argued that the UK should legislate to recognise image rights, as Guernsey was preparing to do, and noted Luxembourg’s favourable regime for income from intellectual property. It suggested that UEFA bring image rights payments within Financial Fair Play, as rugby league’s salary cap regulations do; that HMRC and the Premier League agree a middle path rather than a crackdown that pushes players towards other structures; that the UK consider the position taken by the Delhi High Court in ICC Development (International) Ltd. v. Ever Green Service Station (2003), that a company cannot own the image rights of an individual; and that Europe move towards a multilateral tax regime for international athletes.

Relevance for India

India, too, has no codified image rights law. As Indian athletes become brands in their own right, the questions this paper raised about ownership, valuation and tax will matter here as well.