As the dust settles on another football transfer window, during which we were called into action to advise Angel Di Maria on his £59.7 million move to Manchester United, we take a look at the key employment and IP legal issues to be aware of when trying to complete a deal in a short timeframe.
As with most football transfers, much of our work on the Di Maria deal was concentrated on ensuring the contracts accurately reflected the terms agreed by both sides. It’s all too easy, especially when time is tight, for clauses to be missed and the written contracts to contain inaccuracies, which later down the line can prove very costly for one of the parties involved.
Although the main body of a Premier League contract is a standard form employment contract for players in the league that the PFA negotiate on behalf of all of them and, which cannot be modified, bespoke terms are included in the schedule(s) to the contract – and it is here that lawyers add value by drafting clear and easily understandable terms which reflect the deal struck.
The schedule(s) will almost always cover a combination of the most important terms to a player and the club – including salary adjustment details and mechanisms - such as in the event of qualification for Europe or relegation - bonuses and other add ones, loyalty payments and options to extend or curtail the contract. Clubs often seek unilateral options to extend the term for additional years, yet many only allow players to extend if they play a certain number of games, which can result in players being “benched”.
Another important aspect of the Di Maria deal concerned the former Real Madrid player’s image rights. In an increasingly commercial and celebrity-conscious world the image rights of footballers are having a major impact on shaping new contractual arrangements between players and their clubs.
By "image rights", we are referring to the rights to use a player’s name and image for commercial purposes. Image rights can be very valuable. Indeed, a large portion of many top sports people's income is now derived from endorsement and sponsorship deals, which are based on the licensing of image rights. This non-playing income has the ability to continue long after playing income ceases – just think of Gary Lineker and Walkers crisps. Likewise for clubs, they can trade on the names of players that have long stopped playing. Think of Best, Cantona and Beckham at Manchester United.
Accordingly, it is very important for specialist intellectual property lawyers to be instructed alongside employment lawyers to deal specifically with the image rights aspects of any new transfer deal.
The rights and services provided by a player under an image rights contract with their club will go significantly beyond what is required under a typical employment contract. The purpose, from the club’s perspective, is to increase brand awareness and revenue by using and promoting the images and attributes of its players. From the player’s perspective, image rights contracts can provide valuable additional revenue streams – and provide means of raising their own profile.
Negotiating image rights contracts can be complex. Whether acting for the player or the club, it is important to nail down exactly what the club can and cannot do with the player’s image and name and how the revenues arising from their exploitation are shared and other practical aspects, such as personal appearance. Issues arising can include what on paper look the most trivial of points, such as the colour sportswear a player can wear when not representing his club. However, in practice, such issues can actually be quite important.
It has been reported that in 2013 the turnover of David Beckham’s image rights company, Footwork Productions Limited, was in excess of £16 million. His image is undoubtedly very valuable – as are the images and personal attributes, such as signatures, personal gestures, and so on, of other famous and up-coming sports people.
There is an old saying in English intellectual property law, that "what is worth copying is worth protecting". It is important to remember this at all times, not least in the hectic football transfer window.