sponsorship

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of contract law principles (in 1848 Prince Albert’s drawing of the royal children and of the royal dogs could not be published without his consent – Prince Albert v Strange (1848) 64 ER 293), and through the law of breach of confidence (in 1888 a modest portrait photographer could not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

 

Sponsorship Revenue of Football Clubs

Introduction to the business of Football Clubs

Firstly, it needs to be said that Football is not a profitable industry as such. It generates a lot of revenue (it is a big ‘money spinner’ – according to the Deloitte ‘Money League’, for a football club to gain a place as one of the top 30 highest revenue making clubs in the world, it had to generate in excess of €100m), but very few football clubs actually make a profit every year.

Even where profit is made, very few clubs pay out dividends to the owners. Usually profits are reinvested into the football club for use in paying wages, player transfers and other expenditure. (Football clubs generally spend about 60-70% of their revenue on wages, and sometimes a sizeable amount in paying transfer fees to recruit new players.)

Taking the example of Chelsea FC, their most recent figures for revenue in the 2012/13 financial year was €303.4m, yet they had a pre-tax loss of around £49.3m. Similarly, Manchester City had revenue of €316.2m, yet made a loss of over £90m for the same financial year. In fact the 20 English Premier League clubs made a loss of £291m collectively in 2012-13. Only 8/20 PL clubs recorded a profit in 2012/13, most of this being nominal in comparison to the size of the revenue.

Clearly Football is not a business where the owners invest capital for short-term gain, or sometimes for any direct gain at all.

In fact, since the introduction of the Financial Fair Play rules by the European governing body UEFA, which ultimately mean that the owners of a football club cannot inject capital freely into the clubs they own (so as to promote self-sustainability of the football clubs), the amount of money that clubs can ‘borrow’ from their own owners has decreased.

The sources of Revenue

There are three main ways in which a football club ‘makes money’:

  1. The Matchday revenue and merchandising (for example through the sale of tickets and other related packages that all adds to the match-going experience)
  2. Broadcasting income
  3. Corporate sponsorship

Out of the three main sources of income, Matchday revenue is stagnating. Football clubs have already been charging very high prices, hence much further increases are not possible without driving fans away from the stadiums.

Broadcasting revenue is rising rapidly, with the broadcasting rights to live football matches being bought by TV companies for ever increasing amounts of money – recently Sky and BT spent £3.018billion on the right to show live Barclays PL matches until 2016. Most of this money will be paid out to the clubs on a sliding scale depending on the position they finish in the League up until the 2015/16 season.

Sponsorship:

However, our focus is on probably the most lucrative of the three types of incomes: corporate sponsorship.

As the popularity of the sport has increased, all the major companies of the world want to be associated with the sport so as to increase the exposure of their own brand to the football fans. The companies are willing to spend a lot for the chance to be associated with football.

It is not just football clubs who are sponsored by the large companies, but the football competitions themselves have major sponsors which are their main source of revenue. For example the English premier League is sponsored by Barclays, the rest of the Football League (making up the lower divisions) is sponsored by Sky Bet, the FA Cup is sponsored by Budwiser, the League Cup sponsored by Capital One, and the UEFA Champions League has 6 major sponsors including Gazprom, Sony and Heineken.

Commercial sponsorship is a major part of the revenue of the clubs. For example, 55% of German Club Bayern Munich’s revenue of €303.4m is generated from commercial activities. Furthermore, PSG’s (Paris St Germain) commercial revenue of €254.7m is the record amount a football club has ever earned in one season through sponsorship related streams.

The major methods of sponsorship in football are usually:

  • Selling the naming rights to stadiums (for example Arsenal have been receiving major sponsorship revenue from Fly Emirates in consideration for naming their stadium the Emirates Stadium until 2028. Similarly, Manchester City receives sponsorship revenue in exchange for naming their stadium the Etihad Stadium, and Bayern Munich also receive sponsorship income due to selling the naming rights to their stadium to German Insurance giants, Allianz).
  • Kit sponsorship (all clubs are sponsored by major kit manufacturers in order to wear kits produces by them. Currently the largest deal is Chelsea FC’s Adidas sponsorship of £30m per year for the next 10 years, though Manchester United are close to agreeing a larger deal).
  • Shirt Sponsorship (Clubs sell the right to advertise the logo or name of a company in their football shirt).
  • There are also many other minor sponsorship methods. For example a club may have a designated airline, designated energy partner, etc. However, the amount of revenue the club receives from these minor sponsors, is much less than the amount received from the major methods of sponsorship.

Stadium, kit and shirt sponsorship decisions are purely commercial decisions. The sponsor will obviously want the link to the football club and the exposure that comes with it for as little money as possible.

The football club will want as much money as it can get in order to remain competitive off the playing field. Though the football club will want the security of securing a sponsorship deal on the long-term, it needs to be aware that the deal could become outdated in a short period of time (in the sense that other clubs may agree much more favourable sponsorship deals in the meantime). Therefore the length of the sponsorship deal is probably as crucial a negotiating point between the club and the sponsor as the amount of sponsorship money.

Shirt Sponsorship – Restrictions and Future Developments

Spanish club Barcelona FC were the first club to actually pay an organisation (the charity UNICEF) £1.25m-a-year in order to display their name on their shirt. This deal was recently extended until 2016, however, Barcelona has moved the name and logo of the United Nations Children’s Fund to the back of the shirt and replaced them from main shirt sponsor after agreeing a sponsorship deal with Qatar Airways that earns the club €30m per year for three years.

Barcelona were also the first club to sell an advertisement space on the inside of their football shirts displaying the trade mark ‘Intel Inside’ belonging to computing company Intel.

However, football clubs are restricted on how much advertisement they can display on their playing kits. Though Spanish clubs like Barcelona are permitted to display numerous advertisements on their kits, the FAPL in their Kit and Advertising Regulations prohibits more than 200 cm2 of advertisements used on the front of the shirt and no more than 100 cm2 on the back of the shirt, the back of the shorts and on the socks comprising the football kit. This does not include the logo of the club itself and the logo of the kit maker which may be additionally displayed.

However, it is clear that a club is restricted in the amount of advertising space it can sell to sponsors, and a football club playing in England could not follow Barcelona’s example and sell advertisement space on the inside of their shirts. The FAPL reserve the right to issue disciplinary proceedings against any club that breaches the advertisement rules.

In the future, in order to increase sponsorship revenue, football clubs may become more creative: maximising advertisement whilst staying within the rules. One possibility could be to sell advertisement space on the tracksuits worn by players before the start of the match. Another, as Manchester United has recently found out, is to sell the right to advertise on their training kit (Manchester United’s training kit sponsor is Aon). However, the exposure of the companies through these means is minimal, so this is unlikely to become another major type of sponsorship income.

By Andi Terziu