The commercial value of a well-known individual often extends well beyond their primary source of income. For a sports professional that may be the salary from a club; for an actor, musician or social media influencer it may be performance, appearance or platform income. In each case, endorsements, sponsorship arrangements, merchandising, broadcasting rights and social media partnerships can represent a substantial part of total earnings.
Protecting the legal interests in those revenue streams is a specific area of practice, and one that requires an understanding both of the common law as it applies to image and reputation, and of the contractual structures that have developed around them.
Unlike the United States and certain European jurisdictions, England and Wales does not recognise a single statutory or common law right of personality or right of publicity. The legal protection available to a sportsperson over their name, image, and reputation is instead constructed from a combination of overlapping rights, each with its own conditions and remedies.
This article sets out how those rights apply to sportspeople, and equally to other public figures such as celebrities, entertainers and influencers whose name and image carry commercial value.
The position at common law
The leading authority on the unauthorised commercial use of a sportsperson’s image is Irvine v Talksport Ltd [2002] EWHC 367 (Ch), which established that a false endorsement of goods or services using a person’s image is actionable in passing off. The claim succeeds where the claimant has goodwill in their name or image, where there is a misrepresentation that the claimant has endorsed the goods or services in question, and where damage to that goodwill has been caused or is likely to be caused.
The principle was developed in Fenty v Arcadia Group Brands Ltd [2015] EWCA Civ 3, in which the Court of Appeal upheld a passing off claim brought by the singer Rihanna in respect of the use of her image on a Topshop t-shirt. The case is significant for confirming that passing off can apply not only to false endorsement of services but also to the use of a person’s image on merchandise, where the public is likely to be misled about the commercial source of the product.
Registered rights
A sportsperson may also obtain protection by registering their name, signature, or distinctive marks as trademarks under the Trade Marks Act 1994. A registered trademark gives the proprietor an exclusive right to use the mark in connection with the goods or services for which it is registered, and provides a more straightforward enforcement route than passing off in many cases. The mark must satisfy the requirements of the Act, including distinctiveness, and must be registered in the relevant classes of goods and services under the Nice Classification system.
Copyright may apply to photographs, video footage, and other recorded material in which the sportsperson appears, with first ownership typically vesting in the photographer or producer rather than the subject. Where the sportsperson has commissioned the work or has produced it themselves, the position changes accordingly.
Privacy and data protection
The Data Protection Act 2018 and the UK GDPR impose obligations on those processing the personal data of sportspeople, including the use of their name, image, and likeness for commercial purposes. Misuse of personal information may also give rise to a claim in the tort of misuse of private information, which has developed alongside data protection law and provides separate remedies where information has been shared or used without consent.
Contractual structures
The legal rights described above are commonly given effect through sponsorship and endorsement agreements, image rights agreements, and merchandising contracts. Image rights are also frequently assigned to a separate corporate vehicle for tax and licensing purposes, although the use of such structures has been subject to increasing scrutiny from HMRC in recent years, particularly in relation to footballers and the proportion of income properly attributable to image rights as distinct from the playing services delivered under a club contract.
The drafting of these agreements requires careful attention to the scope of the rights granted, the duration of the licence, exclusivity provisions, territory, royalty arrangements, and termination rights. A poorly drafted agreement can either leave the sportsperson exposed to broader use than they intended, or fail to provide the protection that the commercial position requires.
Corporate structuring
The way in which image rights income is structured has a significant bearing on the tax treatment of that income and on the individual’s broader commercial position. Many public figures hold their image rights through a separate corporate vehicle, but the appropriate structure depends on the individual’s particular circumstances, the nature and source of their income, and their long-term objectives. There is no single arrangement that suits every case.
Advice on the appropriate structure should be taken at an early stage and kept under review. It is equally important to consult accountants on the treatment of different income sources, including the application of the off-payroll working rules (IR35) and the VAT position, so that each stream of income is handled correctly and the structure remains defensible in the event of scrutiny from HMRC.
Speak to Ai Law
Ai Law acts for professional sportspeople, agents, managers, and businesses operating in the sport and media sectors. The firm’s sports and media team advises on image rights, sponsorship and endorsement arrangements, trademark protection, and commercial disputes arising from the unauthorised use of a sportsperson’s name, image, or reputation.
To discuss how Ai Law can act on your behalf, please contact a member of our team.
This does not consist of legal advice and cannot be relied upon. If you need advice please contact us and we will be happy to help.