Sponsorship and image rights

Concept of image rights

Is the concept of an individual’s image right legally recognised in your jurisdiction?

There is a legally recognised concept of an individual’s image right in the United States, commonly referred to as the right of publicity. The right of publicity is an individual’s ability to control the commercial exploitation and appropriation of their identity. Live Nation, Inc v Illinois National Insurance Co, 312 Fed Appx 898 (9th Cir 2009). While the right of publicity is considered an intellectual property right and is similar to trademark, copyright and privacy law, it is a distinct legal right. The protected components of an individual’s ‘image’ are typically their name, nickname, image, likeness, signature and other characteristics that are inherently connected to that individual.

In the United States, the primary source of this right is through state laws; federal law does not protect an individual’s publicity right. Notably, state laws vary in scope and strength of legal protection. Currently, more than 30 states recognise the right of publicity in some form.

Commercialisation and protection

What are the key legal considerations for the commercialisation and protection of individuals’ image rights?

Among the key legal considerations related to the protection of image rights are the elements of a right of publicity claim, potential First Amendment defences to any right of publicity challenge, and the available remedies in cases of infringement on this right.

 

Elements

While state laws vary, a plaintiff bringing a claim based on their right of publicity typically must prove two primary elements: validity and infringement. To prove validity, a plaintiff must prove that they own an enforceable right in an identity or persona. This means they must point to some aspect of their persona that identifies them – their name, their likeness, their nickname, or another distinctive characteristic that identifies them. To prove infringement, a plaintiff must typically prove that a defendant used that aspect of the plaintiff’s identity or persona without authorisation and that the defendant’s unauthorised use is likely to cause commercial damage to the plaintiff’s identity or persona’s value.

Often the primary challenge in these types of cases is whether the plaintiff can show a likelihood of commercial damage. For example, in ETW Corp v Jireh Publishing, Inc, the Sixth Circuit Court of Appeals rejected golfer Tiger Woods’ right of publicity claim in a case concerning the unauthorised use of his image in artwork, ruling that it was not established that ‘the appearance of Woods’ likeness in artwork prints which display one of his major achievements’ would ‘reduce the commercial value of his likeness’ (332 F 3d 915, 938 (6th Cir 2003)).

The elements an individual must prove – and how difficult they are to prove – to prevail in a right of publicity case will vary depending upon which state the case is brought. This is because individual states may be more or less protective of image rights. For example, in California, case law provides for a valid claim of right of publicity infringement if a defendant misappropriated an individual’s identity for commercial and non-commercial purposes. Eastwood v Super Ct, 149 Cal App 3d 409, 417 (1983).

 

First Amendment defence

One common defence to an allegation of right of publicity infringement is that the use at issue is protected free speech under the First Amendment to the US Constitution. This defence can be hard to establish in cases when the alleged infringement is for commercial purposes. Courts will consider advertising and merchandise use as ‘commercial speech’, which is afforded the lowest level of protection under the First Amendment. Notably, the ‘commercial speech’ designation does not protect a would-be infringer from legal liability for infringing on another’s right of publicity. For example, in Zacchini v Scripps-Howard Broadcasting Co, the US Supreme Court rejected a television statement’s First Amendment defence of free speech immunity for violating the publicity rights of a notable performer (433 U.S. 562 (1977)). The Court held that the station did not have a free speech right to broadcast the performer’s routine on its newscast, reasoning that doing so would undercut the performer’s economic incentive to invest in the performance’s commercial success.

 

Remedies

Remedies for right of publicity violations can include injunctive relief and (or) monetary damages. Injunctions bar ongoing infringing conduct, while monetary damages can be awarded to compensate the plaintiff for the infringement. Courts often measure damages to an individual’s right of publicity by analysing the fair market value of the identity in question, loss of future earning potential and the amount of profits earned by the infringer. In cases of wilful violations, punitive damages may also be awarded.

How are image rights used commercially by professional organisations within sport?

In most circumstances, a professional athlete and that athlete’s team and league, have the ability to use that athlete’s name, image and likeness for commercial purposes. The primary mechanism through which image rights are used commercially is through a licensing agreement. In the United States, athletes may license their image and likeness to teams, leagues, players unions and brands interested in commercial initiatives. These license agreements dictate the scope and length of the use of an athlete’s image and likeness. Players unions may also benefit from group licensing agreements through which the union is given the right of commercial use to their union-member athletes. The players’ unions then sub-license these rights of commercial use to other brands to monetise their union-members’ names, images and likenesses.

A prominent example of this union sub-licensing process is OneTeam Partners. OneTeam Partners is a joint venture consisting of the National Football League (NFL) Players Association, the Major League Baseball (MLB) Players Association, the Major League Soccer Players Association, the Women’s National Basketball Players Association, the US Women’s National Team and the US Rugby Players Association that collectively licenses athletes’ name, image and likeness rights. The company’s objective is to maximise the value of athletes’ right of publicity across video games, collectables, merchandise and other commercial endeavours. It has done so by, for example, negotiating a licensing deal with video game developer EA Sports that allowed Division 1 college football players to have their name, image and likeness portrayed in college football video games in exchange for compensation.

Morality clauses

How can morality clauses be drafted, and are they enforceable?

Morality clauses are generally enforceable in the United States, including in the sports context. These clauses are found both in endorsement contracts between athletes and brands and between athletes and teams and (or) leagues. While morality clauses with teams or leagues are generally included in a standard player contract and thus are consistent across all players in that league, morality clauses as part of endorsement contracts between athletes and brands are typically negotiated on an individual basis.

Morality clauses are aimed at ensuring that each party has the ability to preserve its reputation by terminating a contract in the event that the other party to the contract engages in illegal, or otherwise morally questionable behaviour. A well-drafted morality clause will specify the types of conduct that could trigger a termination of a player contract or endorsement deal to avoid later disputes about whether conduct breaches the clause.

Restrictions

Are there any restrictions on sponsorship, advertising or marketing in professional sport?

Restrictions on sponsorship, advertising and marketing in professional sports vary by league. For example, MLB recently permitted teams to sell sponsorship patches on in-game uniforms and helmets, but the league prohibited sponsorship from categories such as alcohol and betting, among other things. On the other hand, the National Basketball Association (NBA) has official sponsorships with both FanDuel and DraftKings in the sports-betting industry. And NASCAR allows for alcohol brand sponsorships on cars that compete in races.

Restrictions may be imposed by leagues unilaterally or may be imposed by agreement among the league and players. In some instances, banned sponsorship categories are agreed upon in the respective collective bargaining agreements (CBAs). The NBA, for example, removed cannabis as a banned sponsorship category after an agreement with the NBA Players Association in the 2023 CBA. In the NFL, however, the league maintains more control over banned sponsorship categories.

Restrictions on sponsorship categories often change over time. For example, the NFL recently relaxed its internal rules that strictly limited what types of alcohol brands athletes and teams could partner with. These changes to limitations may follow the evolving legality of the sponsorship category at issue. For example, as cannabis and sports betting have started to become legalised throughout the United States, professional leagues have started to allow teams and athletes to enter into endorsement contracts with brands within these categories.

Teams and players may also be restricted from certain sponsorship agreements based on an exclusivity restriction. If a team grants sponsorship exclusivity to a certain brand, their contractual arrangement often makes that brand the only company in a given industry allowed to partner with the team (eg, the exclusive car sponsor of a team). One challenge leagues, teams and athletes face is how to navigate competing sponsorships, where, for example, a team has an exclusive sponsorship with one brand while the relevant league or association enters into an agreement with a competing brand. In this situation, the team will generally not be considered in violation of their exclusivity arrangement with the brand in question, unless the contract stipulates exclusivity across team and league layers.