Tue 15 Apr 2014

Image rights explained

1-0 to Players as Rooney Invokes Restraint of Trade Doctrine

‘Image Rights’ are the proprietary rights that an individual has in his or her image, and the other unique characteristics associated with their personality (such as their signature).

In a world of visual media saturation, these rights have a huge financial value to certain individuals who inhabit the media spotlight almost continuously, and they are lucratively used by sportspersons, singers, actors, celebrities, and politicians. Few professions understand the financial value of exploiting such rights as well as professional footballers, however, and few among them as well as the giants of the Premier League – David Beckham, Michael Owen, and Wayne Rooney.

There are a number of ways that image rights can be used to generate revenue, from being assigned as part of complex tax planning vehicles such as ‘Image Rights Companies’, to being promoted under agency or representation agreements, where a third party collects a commission every time their successful promotion or management of an individual’s image rights results in a new opportunity for endorsement, publicity, sponsorship, or licensing for that individual.

A recent case brought against Wayne Rooney by his former management company, Proactive Sports Management, provides an insight into both the commercial influence that agents and management companies have over sports personalities, and the extent to which the courts now view the contracting of image rights as part of professional sportsperson’s everyday professional life.

At the age of 17, Rooney assigned his image rights to an image rights company, which in turn entered into an eight year, exclusive contract with Proactive Sports Management under which they would collect 20% commission on every new promotional venture they set up.

In what is widely hailed as a victory for individual sportspersons against the pervasive power of agents and managers, five years into the contract Rooney successfully argued that the duration and exclusive nature of his agreement with Proactive was a restraint of trade.

Whilst the court accepted Proactive’s argument that Rooney’s image rights were ancillary to his main trade of professional footballer, it crucially stated that the contract nevertheless limited the extent to which he could take advantage of the earning capacity associated with that trade. It therefore accepted that it was such a restraint and held the contract to be illegal.

The consequence that this will have on the terms of agreements between players and agents – and the resulting power struggle– remains to be seen, but the important message to come from this case is that the courts, and society, increasingly consider the exploitation of image and personality as part of the normal earning potential of publicly-known professionals.

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