How are player image rights managed in football?

Image rights vs. team rights

One of the most famous images of the modern Premier League era is the one where Sergio Aguero celebrates THAT goal against Queens Park Rangers, the one that brought the title back to the Eastlands after 44 years.

In 2012, Aguero scored the winner to give Manchester City their first EPL title in 44 years (courtesy The Times)

If City were to use this photo for any promotional activity, or sell it as a poster, they would have to make image rights payments to Aguero. However, this does not apply to a team picture.

The current rule is that any image with three or more players from the squad constitutes a team picture. There are also rules regarding the use of “fringe” players to qualify as a team image.

This is one of the reasons that kit launches have a multitude of players, as opposed to just the “stars” of the team. The choice of players for such events is heavily impacted by image rights issues. This extends to organisations such as the Premier League as well.

The Premier League owns the rights to teams and matches, but not to individual players. This is why promotional material for the League uses many players.

For example, the introduction video to the 2013-14 Premier League season featured more than a dozen players from more than 12 teams, each appearing for not more than a second.

Expansion of image rights

As clubs become more and more reliant on commercial income and matchday revenue compromising and less of a club’s total income, clubs seek to find new methods of increasing their earnings. Real Madrid was among the first clubs to recognise the value of player image rights, and this understanding was one of the major factors behind the Galacticos project.

Florentino Perez, in his earlier stint at the club, instituted a system where image rights would be shared equally between club and player. The argument behind this was that the commercial value of a player would be heavily influenced by the fact that he plays for Real Madrid.

The issue over image rights almost scuppered David Beckham’s move to Los Blancos, before both parties were able to reach a suitable agreement on the matter. In the end, it worked out well for both parties.

Madrid saw a 137% rise in merchandising revenue alone during Beckham’s four-year stint at the club, and Beckham’s brand benefitted immensely from exposure to the Spanish-speaking markets that Real Madrid dominates. Beckham’s contract with the LA Galaxy had him splitting image rights in an 80-20 ratio with the club.

Ronaldo’s appeal meant that he negotiated a 60-40 image right agreement with Real Madrid

The first (and so far only time) Madrid have broken the 50-50 agreement was for Cristiano Ronaldo when he first moved in 2009. Ronaldo was able to negotiate a 60-40 arrangement, which probably was only possible due to his fantastic season the year before.

Image rights are becoming increasingly commonplace, and clubs often find themselves having to deal with such structures more and more frequently. Before a player sets up an image rights company however, the player must have an image or brand that would have commercial appeal to sponsors.

Once the company has been established, any prospective buying club that wishes to use the image for commercial activities would have to strike an agreement with the company.

Some players even establish two companies; one to manage rights in the UK, and another to manage rights in other jurisdictions. This allows them to keep income from non-UK deals out of the purview of the British taxman.

As the money floods into the modern sport and commercial agreements become bigger and more complex, there are a multitude of transactions that take place now while satisfying image rights payments. These can include payments from sponsors to players, sponsors to clubs, clubs to players, players to club, offshore structures, tax rates, different legal jurisdictions.

There can also be issues when the player and club have different sponsors.

At a fundamental level, image rights agreements are simply the remuneration paid to a player for the use of his image. The intertwining of commercial rights, tax issues, and sponsorships however, have made it a rather convoluted structure, but one that cannot be ignored by either clubs or players due to the financial significance they carry.

With the money continuing to pour in, and the game increasing its audience and market around the world, image rights will be a major consideration for both clubs and players across the world.