Update on ‘buy-out clauses’

Presuming that a player has negotiated the insertion of a ‘buy-out clause’ into his playing contract, why is it that that footballer must himself pay the sum required to activate the buy-out clause? Can a clause not be drafted so as a bid of a certain value made by a third party club for a player, must be accepted by the player’s current club? Theoretically, such ‘release clauses’ can exist, but their enforceability in English law is not certain.

The fundamental principle of privity of contract would mean that the third party club, who is not privy to the footballer’s playing contract, cannot enforce the clause if the current club decides to reject a bid equal to any sum purported to release the player. This is especially the case as any playing contract would expressly exclude the rights of third parties arising out of statute. As the third party club cannot enforce the clause, it would be entirely up to the discretion of the current club on whether to accept a bid or not. Uruguayan striker Luis Suarez had a similarly worded clause in his previous playing contract with Liverpool FC, which purported that a bid of at least £40,000,000 must be accepted. However, when Arsenal FC made a bit of £40,000,001, Liverpool chose to reject the bid, presumably after being advised of its unenforceability.

One way, around the problem could be a drafting which puts an obligation on the current club to inform the player once a bid which is at least equal to the agreed sum is made. The player would also need to ensure that it is expressly stipulated on the contract that he can enforce the clause in the English Courts without needing to prove a breach or damages (an indemnity of sorts). As such, using the Suarez example, if the drafting had been slightly different so as to implement the above mentioned variations, Liverpool would have been under an obligation to inform Suarez once Arsenal made the bid, and knowing that Suarez has a contractual recourse, Liverpool would have been under pressure to accept. Of course, ultimately Liverpool could have still refused to accept the bid, but in this case Suarez would have been able to enforce the contract by bringing a claim in the English Courts.

 

 

By Andi Terziu

Image Rights protection of Footballers in English Law and how it can be Improved

The protection of the image rights is important for footballers as their ‘image’ is a major source of income – most top sports people are able to augment their income from the sport through endorsement of products and sponsorship. For this to occur they have to exploit the ‘image’ they have enhanced through their sporting reputation. As a result, the player’s image needs to have some protections so as the player reaps the reward for his own reputation.

The main issue is that, unlike in certain jurisdictions, such as the USA and Gurnsey, image rights are not usually directly protected in English law. Historically, images rights have been protected by English Courts by application of contract law principles (in 1848 Prince Albert’s drawing of the royal children and of the royal dogs could not be published without his consent – Prince Albert v Strange (1848) 64 ER 293), and through the law of breach of confidence (in 1888 a modest portrait photographer could not advertise his skills by displaying a portrait of a lady without her consent – Pollard v Photographic Company (1888) 40 Ch D 345).

The English Courts have generally supported the principle of freedom of expression and have argued that true events should be generally published. Very rarely have the courts deviated from this principle, though intellectual property can be said to be the main form of encroachment to the freedom of expression. However, though intellectual property is said to promote innovation that benefits the public at large, image rights, it can be argued, benefit the individual without benefiting the public. Though, as football continues to grow internationally, and as more international stars arrive to ply their trade in these shores, the idea of a need to give more protection to the image rights of the player in England gains support.

One current route for safeguarding image rights is through the protection of private information following the principles established in the Campbell v MGN and developed in Mckennitt v Ash. By way of example, in Douglass v Hello! the photos taken at a wedding were held to be private information that could be protected. However, privacy law only offers limited protection. Photos taken of a football player in public may not be protected as private information. As such, any photo of a live match cannot be protected as it is clearly already in the public domain. This means that anyone could use a photo they have taken during a live match to promote or endorse their product without breaching the law of protection of private information.

Similarly, though a claim in defamation may be another route to protect a player’s image, it is also limited to situations where there is something in the photo that lowers the estimation of the footballer in the eyes of the reasonable member of the public. By way of example, in Tolley v JS Fry & Sons Ltd, an amateur golfer appeared in an advert for chocolate manufacturers with a chocolate bar sticking out of his pocket. He had not agreed to the endorsement and argued that the photo compromised his amateur status as it suggested he was endorsing chocolates. Clearly, defamation can only be a recourse in a case which has a special set of facts. Just as the law of privacy, therefore, defamation offers only a limited protection for image rights.

Under English Law, the best current method of protecting is a claim under the tort of passing off following the case of Irvine v Talksport. In this case, a racing driver could show that his fame and reputation as a sportsman amounted to goodwill as he could be recognised due to his image and this enabled him to obtain an income through sponsorship or endorsement. Therefore an unauthorised use of his likeness in a doctored photo showing him holding a radio with the logo of radio station Talksport on it, amounted to misrepresentation of the public. This misrepresentation was held to have caused damage to Irvine, as he lost the ability to make money by way of royalties through a similar endorsement.

A better protection for image rights would involve the creation of a registration system, similar to that of the trade marks register. A similar system has been introduced in Gurnsey law, and a look at it will reveal the advantages it has over the current approaches in English law.

Under the Gurnsey image protection system, any individual or legal entity who has lived or existed within the last 100 years, any groups of persons who are linked in a common purpose (a good example could be the so-alled ‘class of 92’ of Manchester United players) or any fictional human character would be a registrable personality. Registered images, including names, signatures, characteristics, likenesses, gestures, photographs and illustrations, may be registered in relation to the said personality. An image can be registered if it has actual or potential value and is distinctive in that it is recognised as being associated with the registered personality by a wide sector of the public in any part of the world. By way of example, Gareth Bale could register his heart shaped celebration as his image right, and could protect it more widely than through his trade mark registration of the said celebration, since uses of images of the gesture can be prevented even if they are not used for the purpose of trade.

One major advantage of such a registration system is that the registration of the personality would covey a monopoly property right over the registered images, which is prima facie proved simply by reference to the register. Therefore, once registered, images will be presumed to have value and be distinctive, and it will be up to the defendant to rebut the presumption. As a result it is better for the proprietor to register as many images in relation to their personality as possible. The Gurnsey system is a hybrid of English copyright and trade mark law. The registration process and criteria involve absolute and relative ground examination, and, in order for infringement to be shown, the purported infringing image would need to be (1) identical to the registered image; (2) confusingly similar to the protected image; or (3) similar to the protected image and takes advantage of or is detrimental to the distinctive character or repute of the registered personality. On the other hand, defences such as ‘fair dealing’ are available where an image is (1) used for reporting news or satire; (2) is included incidentally; or (3) is used in relation to goods or services offered to consumers with the image owner’s consent. The more extensive protection of the image rights in Guernsey clearly make the registration regime favourable to current possible passing off action.

Currently, it would not be possible for a sports person to register their personality and images related to it in the Gurnsey registry and then enforce it against infringement in the UK. However, the wider protection given by registration, make the method of protection more attractive than the current protection under English law. As such, it would be an advantage to introduce such as registration system in English Law in the future.

 

By Andi Terziu