Image Rights - big business in sport

8 August 2013

Image Rights can be lucrative, and for some sports personalities and clubs, the most valuable source of revenue. However, unlike in some countries, the UK has no recognised or defined legal right in law for a person to protect their image. As a result, sportsmen and their clubs frequently seek to use other legal tools to exploit Image Rights.

Image Rights Agreements

It is now commonplace that parties will enter into Image Rights agreements, especially in the most commercially lucrative sporting sectors, like football. Below, I have outlined three issues to look out for in relation to Image Rights agreements:

(1) Overlapping Agreements
Sports personalities may have more than one Image Rights agreement in play at once and it is therefore important to ensure that there is no overlap between them. By way of example, it is not unusual for a premiership footballer to have different Image Rights agreements between (a) the footballer and third parties exclusively for his benefit, such as sponsorship and boot endorsement deals; (b) the footballer and the club, to include team sponsors and (c) the footballer and the national team, where his image will be used to promote the goods of the national team sponsor. All of these different agreements must be aligned by the legal representatives to ensure that there is no conflict and that all of the agreements are enforceable.

(2) Tax Avoidance
Footballers, agents and the clubs will often have a preference for entering into Image Rights agreements as a tax efficient way of remuneration. However, Image Rights agreements must be genuine and legitimate commercial agreements for consideration to provide promotional services. If seen as a device by which the parties are seeking to avoid paying tax, it will be unlawful. There is a particular crackdown where footballers have set up companies (sometimes offshore) which own the player’s Image Rights and then pay the player dividends, thus attracting a much lower rate of tax (or no tax). There will also continue to be greater scrutiny in the future where footballers whose independent commercial value is less obvious than the likes of Beckham, Messi and Ronaldo but have still been paid vast sums for exploitation of their image. Ultimately, Image Rights agreements will need to be genuine and be justified on an independent commercial basis.

(3) Performance and Breach
The drafting of an Image Rights agreement will need careful consideration to ensure that the parties’ rights and obligations have been properly defined, because the parties’ performance of the contract will often come under scrutiny. In respect of the party that has purchased the Image Rights, the deal will often involve a promise to pay commission to the sportsman based on the exploitation of the Image Rights. As a result, any terms relating to that party’s performance and the commission that is payable must be clear and uncomplicated. As for the sportsman, he will often have agreed to dedicate a minimum number of hours per week for marketing purposes, which will need to be honoured. Most lucrative agreements will also include provisions about conduct and behaviour which is relevant to the sportsman’s reputation, as Tiger Woods and Lance Armstrong have probably discovered to their financial cost. It is not always easy to assess an adequate measure for damages if a party to an Image Rights agreement does breach the contract. It will depend on the facts of each case but it could include an application for injunctive relief if a sportsman has broken an Image Rights agreement and entered into a new agreement with a competitor.

Alternative Ways to Protect Image Rights

Provided they are drafted properly, Image Rights agreements are undoubtedly the best way of protecting Image Rights. However, I briefly outline three other possible alternatives below:

(1) Passing Off
Preventing a person from passing off their goods or services as those of another is perhaps the closest UK law has moved towards recognising Image Rights. In the case between Eddie Irvine and Talksport, the radio station had used a photo of Irvine holding a mobile phone to his head, but manipulated it substituting a photo of the phone with a portable radio with the name ‘Talk Radio’ on it. Irvine alleged that the picture was an actionable passing off, implying that he endorsed the radio station. The court agreed with him after he was able to prove that (a) he had a significant reputation or goodwill and (b) Talk Sport sought to exploit his name by presenting a false message to a significant proportion of the public that they had been endorsed, recommended or approved by Irvine.
   
(2) Trade Marks
Sport personalities who are interested in exploiting their image or brand for commercial gain are now commonly registering trade marks both to commercialise their brand and to strengthen their rights so as to help to prevent unauthorised third parties from using their names, images or other characteristics. It may be possible for sports personalities to register their names as trade marks if the name is distinctive like “Gazza” or “David Beckham”. However, if the name of the sports personality is being used simply to describe an image of a sports personality used to promote a product, it will not generally infringe trade mark rights. There is, after all, no assumption that only sports personalities can market their own characters. There are examples of high profile football managers failing to register their names as trade marks in respect of photographs and posters for this very reason.

(3) Privacy and Breach of Confidence
The leading case of Douglas v Hello illustrates that a celebrity is entitled to exploit his personal or private image and life for commercial reasons and prevent other unauthorised parties from exploiting it for their own profit. However, the circumstances in that case were fairly unique given that it related to unauthorised photographs taken at a wedding.

In spite of the fact that there is no specific legal right in UK law for a person to protect their image, Image Rights agreements are very much commonplace as a means of allowing sportsmen and sporting organisations a mechanism to commercially exploit their image. Getting the drafting right is critical so as to ensure enforceability, lawfulness and so that parties can maximise earning potential in a tax efficient way.

This article was republished with the kind permission of Football Club Magazine.

 

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