EIM00734 - Employment income: general: payments for “image rights”: Sports Club

Background

Sports Club concerned the actions of an English football club in respect of 2 star players, anonymised as Evelyn and Jocelyn, both of whom had high profiles as existing international players at the time of joining Sports Club on transfer from clubs outside the UK.

Evelyn and Jocelyn both had pre-existing arrangements for the exploitation of their “image rights” through an IRC. Both IRC derived income from agreements with a wide range of other businesses, which were based on promotional agreements between the player and the IRC under which the player agreed to provide promotional services to the IRC. In addition the IRC for Evelyn, but not the IRC for Jocelyn, had previously made agreements with the football club that Evelyn was employed by for the exploitation of the image rights. When taking up their employment with Sports Club, both agreed to arrangements under which Sports Club would make payments, in addition to amounts payable to them as individuals under their contracts of employment for service as a footballer, to the companies that were licensed to exploit their “image rights”.

At the time, Sports Club had not previously entered into such arrangements in relation to any other players.

Misleading terminology

In the preamble to their decision, the Special Commissioners explicitly recognised that there was no property in a person’s image and that it was therefore misleading to describe the arrangements in Sports Club as “image rights agreements” (paragraph 8) –

“During the hearing, and in the documents, the promotional agreements were sometimes referred to as “image rights agreements”. As it was agreed that in England there is no property in a person’s image we do not find the expression “image rights agreement” as being sufficiently descriptive of the contents of the agreements in issue in this appeal. As the agreements concerned promotion, publicity, marketing and advertising we refer to them as promotional agreements except where the context requires a reference to image rights.”

In their decision (paragraph 78), the Special Commissioners reiterated this point and held that they found in favour of Evelyn and Jocelyn because the promotional agreements created a series of contractual obligations -

“We have already mentioned that we do not consider that the name “image right agreements” adequately describes the promotional agreements at issue in this appeal. We wish to adopt the definition of the respondent’s counsel that image rights were the ability to make money out of contracting with companies to do things for them and were an opportunity to make money out of the fact that one was very well known. We also adopt his suggestion that what in practice Sports Club was getting from the promotional agreements was a series of contractual obligations both positive and negative; positive in the sense that the player would, if called upon to do so, do certain things like endorsing products or going to photoshoots and negative in the sense that he could not undertake such activities for others. Again we accept the suggestion of the respondent’s counsel that the promotional agreements were for the personal endorsement of products and the like.”