Understanding Sports Image Rights

By Ian Blackshaw,* international sports lawyer, academic, author and member of the Court of Arbitration for Sport

Sports are big business and worth more than 3 percent of world trade. Not only are mega sums generated by the sale of sports broadcasting rights, especially to major sports events, such as the Olympic Games and the FIFA World Cup, but also through the commercialization of the sports image rights of well-known teams and sports persons.

Image rights are widely defined, using the expression “image” not in its narrow sense of “ likeness” but in its wider sense of “persona” or “brand”, to use a marketing term. In fact, a typical “grant of rights” clause defines image rights in rather broad terms, as follows:

Access to the services of the personality for the purpose of filming, television (both live and recorded), broadcasting (both live and recorded), audio recording; motion pictures, video and electronic pictures (including but not limited to the production of computer-generated images; still photographs; personal appearances; product endorsement and advertising in all media; as well as the right to use the personality’s name, likeness, autograph, story and accomplishments (including copyright and other intellectual property rights), for promotional or commercial purposes including, but without limitation, the personality’s actual or simulated likeness, voice, photograph, performances, personal characteristics and other personal identification.

See also the judicial definition of image rights in the English High Court Case of Proactive Sports Management Ltd v. 1) Wayne Rooney, 2) Coleen Rooney (formerly McLoughlin), 3) Stoneygate 48 Limited, 4) Speed 9849 Limited, involving the sports image rights of the former Manchester United striker and England captain, Wayne Rooney.

Image rights are also known by different names and subject to different legal treatment in different jurisdictions. In the United Kingdom, they are known as image rights; in continental Europe, as personality rights; and in the United States as publicity rights.

Sports image rights are very valuable assets. The iconic 1970s English soccer player, Kevin Keegan was the first sports personality to enter actively into what was known at the time as a “face contract” for what were essentially his image rights. (Photo: Eamonn McCabe)

Legal protection of image rights

In the United Kingdom, image rights per se are not legally recognized (see the Australian Case of Victoria Park Racing & Recreation Grounds Co Ltd v Taylor (1937) 58 CLR 479), except for tax purposes, following the Decision in a UK Tax Appeal Case in 2000 (Sports Club plc v Inspector of Taxes [2000] STC (SCD) 443).

In this Case, Arsenal Football Club succeeded in having payments made to off-shore companies in respect of the Club’s exploitation of the image rights of their players, David Platt and Dennis Bergkamp, classified, for tax purposes, as capital sums and, therefore, non-taxable as income. Thus, in the United Kingdom, sports persons have to rely on a “rag bag” of laws, such as trademark and copyright law, and the arcane common law doctrine of “passing off” and/or vague notions of breach of commercial confidentiality, as in the Catherine Zeta Jones and Michael Douglas dispute with Hello Magazine over the unauthorized publication of their wedding photos (Douglas & Others v Hello Limited [2001] 2 WLR 992).

However, it should be mentioned that the Channel Island of Guernsey introduced, on December 3, 2012, a new Statutory Image Right, akin to a trademark, allowing owners of such intellectual property rights to register them, in effect in perpetuity, and thereby create a more clearly separable and marketable asset. But, as will be appreciated, any rights based on trademarks have territorial limitations.

In the rest of Europe, a legal right of personality is recognized and safeguarded under the constitutional rules of the country concerned.

For example, in Germany, Articles 1 and 2 of the Constitution protect image rights. Thus, Oliver Khan, the former German national goalkeeper, successfully sued Electronic Arts, the well-known games manufacturer, for using his name and image in an official FIFA Computer Football game without his express consent (Kahn v Electronic Arts GmbH, unreported, 25 April 2003).

Also, in the United States, most states recognize and legally protect publicity rights based mainly on the general principles of the “recognition of the economic value of an individual’s identity” and “unjust enrichment” (Cardtoons, L.C. v Major League Baseball Players Ass’ n, 838 F. Supp 1501 (N.D. Okla. 1993)). However, there are certain limitations on such legal protection as was demonstrated, for example, in a case involving Tiger Woods, the famous golfer, involving the unauthorized production and sale of a painting of him in connection with his victory in the 1997 Augusta Masters (ETW Corporation v Jireh Publishing, Inc. (2003 U.S. App. LEXIS 12488, 20 June 2003).

Remedies for infringements

There is a variety of legal remedies available to those whose sports image rights have been infringed. They range from damages to interim and final injunctions.

In assessing damages generally, in a number of continental European jurisdictions, a “lost license fee” is often applied. In other words, what would the offending party have had to pay if that party had been granted a license to commercially use and exploit the sports image rights concerned.

There is a variety of legal remedies available to those whose sports image rights have been infringed. They range from damages to interim and final injunctions.

However, generally speaking, damage awards in Europe are much lower than in the United States. For example, in Switzerland, Swiss Courts will rarely award more than between CHF 10,000 (USD 10,053) and CHF 20,000 (USD 20,107) for infringements of sports image rights. In the Oliver Khan case, mentioned above, Khan was awarded the princely sum of EUR 3,000 (USD 3,374).

As for injunctions, being an equitable remedy under the Anglo-Saxon legal system, such measures are always granted according to the discretion of the Court and only where damages would not be an adequate remedy.

It may be possible, according to the particular circumstances of the case, to obtain specialized injunctions, such as a Quia Timet injunction, the purpose of which is to prevent an anticipated breach of a legal right before an actual infringement has occurred. For example, in Spain, under Article 9.2 of the basic law (Ley Organica), a judge can adopt all required measures to achieve the following outcomes:

  • to stop illegal interference by third parties;
  • to restore the owner’s full enjoyment of their image rights; and
  • to prevent future interferences.

In cases of breach of copyright, in many jurisdictions, it may be possible to request the relevant customs authorities to stop counterfeit or pirated goods bearing the sports persons’ unauthorized images from entering their territory. These are very valuable and practical tools for fighting infringements of sports image rights on a trans-national scale.

Valuation problems

One of the legal difficulties encountered, in practice, for commercial negotiations and tax and civil litigation purposes, is to obtain a reliable and independent valuation of the image rights involved. Although there are a number of companies offering these rights, not all of them are reliable or have the professional expertise to do so. One that does, and with which I am professionally associated, is APC Sports Consulting, based in Cyprus. The managing director of this company, Athena Constantinou, has developed a unique “Brand Evaluator” for this purpose.

The methodology used is based on the income approach. In other words, to identify and predict future revenue streams from commercializing the sports person’s image and discount them into the present applying certain risk factors, including injury and early retirement. These are based on the abilities and expected performances of the sports persons concerned. Such evaluations are made on a case-by-case basis according to the particular facts and circumstances of each individual. For more information, go to www.sportsimagerightsexpert.com.

Morality clauses

Another controversial issue that arises in practice is a fall from grace of the sports person; for example, Tiger Woods’ marital infidelity a number of years ago, or a fall from form or sporting excellence. These are matters that need to be foreseen and taken care of in the corresponding sports image rights agreements.

Regarding the former, there may be a need to include a so-called “morality clause” in the agreement to protect the other party’s commercial and financial interests. The usual “morality clause” is couched in the following terms:

The Sports Personality shall, at all times, during the term of this Agreement act and conduct himself/herself in accordance with the highest standards of disciplined and professional sporting and personal behaviour and shall not do or say anything or authorise there to be done or said anything which, in the reasonable opinion of the Licensor, is or could be detrimental, whether directly or by association, to the reputation, image or goodwill of the Company or any of its associated companies. The Sports Personality shall not, during the term of this Agreement, act or conduct himself/herself in a manner that, in the reasonable opinion of the Company, offends against decency, morality or professionalism or causes the Company or any of its associated companies to be held in public ridicule, disrepute or contempt, nor shall the Sports Personality be involved in any public scandal.

On the other hand, the sports person should also require the other party to act in a responsible and professional manner also, particularly in relation to the production of the goods on which the sports person’s image may appear. For example, producing sports footwear and clothing endorsed by the sports person that is produced in so-called “sweat shops” in the Far East. This provision is designed to protect the sports person’s valuable goodwill built up in his/her brand.

Any breach of these provisions may, according to its seriousness, trigger a termination of the Agreement for just cause.

For more information on drafting sports image rights agreements generally, see Sports Marketing Agreements: Legal, Fiscal and Practical Aspects’ by Ian Blackshaw, Asser Press, The Hague, The Netherlands.

Sports image rights are very valuable assets. As such, there is a lot at stake in financial and sporting terms, and, accordingly, they need specialist attention in order to ensure they are legally protected. There are many traps for the unwary and inexperienced.

Professional advice is a sine qua non for their successful exploitation!

Disclaimer: This publication does not necessarily represent the views of WIPO or any of its member states.

*Prof Dr Ian Blackshaw is an international sports lawyer, academic, author and member of the Court of Arbitration for Sport and a WIPO Domain Names Panelist. His e-mail is: ian.blackshaw@orange.fr.