Image Rights Agreements and the Issue of Sponsorship Exclusivity in Football
Last week we began to understand that football players in their own right can carry considerable commercial value. In the cases of some of the top stars, they are more influential and have a greater following than the clubs they play for. The impact of this is that the clubs can utilise the status of their star players to enhance their commercial revenue. As the graph below shows, the clubs that generate the greatest revenue are also associated with the most lucrative sponsorship deals which contribute
large sums to their finances. However, the wide variety of partners that sponsor the clubs, from airlines to beverages to watches to cars, often do so, not on the basis of the club alone, but because particular globally recognisable and marketable members of the squad can become the faces of their advertising campaigns. Hence, there must be an arrangement and contract in place between the club and the player that sets out the extent to which the club can ‘use’ their image to attract these kinds of sponsorships.
In this blog I will examine the concept of Image Rights Agreements and their influence upon player contracts and their income. I will also outline the complications that this may cause such as exclusivity clashes and difficulties in agreeing upon off-field image contracts to the extent that a transfer negotiation may fall through as a result.
What is an Image Rights Agreement?
Image Rights Agreements are a relatively new addition to football contracts. They have risen as a result of the growing commercialisation and marketability of football players in the age of social media influencing, global recognition and lucrative sponsorships of clubs. These agreements are made in order to protect the players right to receive an income from the use of the personal attributes. Image Rights Agreements, therefore, provide a mechanism for which clubs can remunerate players for their off-pitch commercial activities with sponsors associated with the club which benefits the club itself commercially and financially.
The endorsement of products and the players‘ involvement in any kind of marketing affiliated with the club for which they play can vary greatly. Players often appear in television advertisements, on billboards and can be seen posing in or with a range of endorsed products. Image Rights Agreements also incorporate the use of the player and their image for activities such as photo shoots in the new season kit of the club or other official merchandise and teamwear and the permissibility of distributing
these images across the club’s social media channels.
Many things can affect the value of a player’s image. It is important to note that the ‘image’ of a player refers to a broad scope. This includes; their face, haircut, voice, nickname, autograph, squad number and any other ‘trademark’ characteristics they might possess. Their following, publicity, reputation, personality, fame, status and personal fan-base then further influences the value of their image. For example, an airline company, in this case Emirates, that is an official vehicle partner of a major club such as Arsenal, is more prone to be interested in using the most recognisable faces of
the club in their campaigns. Let’s say, for the sake of this example, that Bukayo Saka was requested by Emirates to be a part of their latest advertisement, Arsenal would be able to call upon Saka for his services through their image rights agreement and a license they will have obtained. This license is obtained through demonstrating that the provision of Saka’s image to the sponsor is commercially viable and generates additional income for the club.
On Saka’s side, the young English star will most likely have set up his own Image Rights Company. This is commonplace for players of this stature. The players sell their image rights to the company which will then be entitled to a fee directly from (in this case) Arsenal for the use of Saka’s image. The benefits of this is that the money received directly from the club will only be taxed at a company rate of 19% rather than included in a player’s 45% income tax if it were to be paid directly to Saka. Further tax
may be paid at a future date once the player takes the money out of the company but it is most likely to be kept there and can be seen as security savings for once a player retires.
The agreement with the image rights company will have been set out when the player signs with the club in their employment contract. This avoids legal complications and sets out the parameters the clubs can use in exploiting the image of their star players. However, in some instances, disputes over image rights agreements can be a decisive factor in signing for a club. This was the case in 2019 when it seemed Paulo Dybala was set to transfer to Tottenham Hotspur in the English Premier League. Ultimately, the deal collapsed as a result of a failure to agree upon image rights clauses. Despite being irrelevant to the football on the pitch that a club is signing the player to play, in the modern era of commercialised football, it is interesting that image rights can take on a significant role in contract negotiations.
Exclusivity and The Issues That Can Arise
Exclusivity is a fairly straightforward term to comprehend. It refers to the idea that a player or a club that enters into an endorsement contract will likely have agreed to exclusivity to that product or brand. In other words, partnering with a certain brand or company will simultaneously prevent a similar agreement taking place between the same party and a rival company and therefore prevents the sponsored party from publicly promoting their products. The most prevalent example of this in football is
between the two sports apparel giants, Nike and Adidas. Evidently, a player or club that is partnered with or sponsored by one is not permitted to advertise or even use the products of a rival company.
In more complex cases, exclusivity can also apply to things like using headphones, watches, leisurewear, cars and hats of a certain brand which sponsors a player. This can make things difficult and restricts what a player can and can’t do; it is something they must be wary of when negotiating and signing an endorsement contract. Nonetheless, this may explain why you are unlikely to ever see Lionel Messi drinking Coke, Raheem Sterling shaving with a non-Gillette razor or Joe Hart using any shampoo other than Head & Shoulders!
The issue with exclusivity arises when there is an obvious clash and contradiction between a player and the club for which they are signed. A useful case study to understand this is Lionel Messi. Unbeknownst to some, the Argentinian was actually sponsored by Nike from the age of 14 and even made his Barcelona debut donning Nike boots. However, in 2006, after Adidas offered around double the annual fee that Nike were currently paying, Messi switched to the rivals and he was perfectly within his right to do so. Nonetheless, this caused a commercial problem with legal, contractual implications as Barcelona’s primary sponsor was Nike. This is where exclusivity gets complicated.
Once more, the same situation is repeating itself at Paris Saint-Germain who are also sponsored by Nike and their 2022/23 kit is labelled with the ‘Air Jordan’ emblem. In the photoshoots of the new kit, as a global star, Messi was obviously used to promote the teamwear. This is only possible as there are certain exceptions to exclusivity clauses that permit players to wear the brand of rivals if necessary in line with their club. This has to be the case or Messi wouldn’t be able to wear a PSG shirt every weekend!
However, measures are still taken to ensure there is not a breach of an exclusive contract, in this case, the one that Nike has with the French club. In the photos from the PSG kit shoot, which can be viewed online, obvious efforts are made to hide Messi’s boots (which are presumably Adidas) from display and to ensure the images are not seen to be promoting their rivals as well. Fortunately for Messi, Argentina are sponsored by Adidas so it is more straightforward for him on the International stage.
The sole purpose of exclusivity is that a player must not be seen to be wearing or using and obviously promoting a rival brand, but it becomes more complicated once club partnerships are considered. This has impacted major stars such as Cristiano Ronaldo (Nike) at Real Madrid (Adidas) and even for managers such as Jose Mourinho (Jaguar) who experienced issues as manager of Manchester United who were affiliated with Chevrolet as their Official Vehicle Partner.
To give you a sense of the influence that these players can have and why the exclusivity clauses are so important to the sponsors; it is estimated that Cristiano Ronaldo generated approximated $216million in additional value for his sponsor’s rivals Adidas simply by sporting it as part of his Real Madrid kit. Messi returned the favour himself and it is suggested that as he wore the Nike kit of Barcelona, he contributed
around $110million in value to Adidas’ rivals. So, despite the best efforts of the company to maximise exclusivity, the impact of such global stars still having to wear the rival’s brand is strongly felt. Hence, brands will do all they can to ensure that the exclusivity clause is applicable in as many circumstances as is reasonably enforceable.
This blog has hopefully provided you with a useful overview and understanding of two important aspects associated with the off-pitch commercial opportunities for players. Image Rights Agreements, whilst a modern phenomenon, are now an integral part of a player signing with a club and can dramatically impact the income that player may receive so its importance is not to be overlooked. For exclusivity, it is important for anyone involved in football to understand when and where exclusivity clauses are applicable and what obligations are necessitated between players and clubs. The last
thing a player would want to do is to breach their contract and lose out on additional
income from a sponsor.