In brief: sponsorship and image rights of professional athletes in United Kingdom

Sponsorship and image rights

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

For these purposes, it is generally considered that ‘image’ or ‘image rights’ comprise rights connected to an individual for commercial or promotional purposes including his or her name, nickname, photograph, signature, likeness, logo and similar. While commercial arrangements relating to the use of individuals’ image, fame, characteristics and reputation are commonplace (eg, for promotional activities or the creation of branded products), English law does not recognise a distinct concept of an ‘image right’ that is capable of ownership or registration.

Instead, a piecemeal approach is adopted, whereby contractual arrangements and a range of statutory and common law causes of action are relevant for individuals who are seeking to protect or exploit their image rights and, in particular, prevent unauthorised use of their image by third parties (eg, in promotional materials or on/in products or services). These include protection of intellectual property rights connected to image rights (such as copyright or trademarks) and the doctrine of passing off.

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

In terms of commercialisation of image rights, the terms of any grant of rights or permission to use image rights in favour of any third party should be carefully defined and documented to provide appropriate control and protection for the individual. In particular, thought should be given to the relevant products, services and brands to which such rights are granted, any exclusivity, rights of approval for the individual over the use of their image, morality or reputation-based conditions and relevant termination rights, along with the applicable financial arrangements (which may include royalties or revenue shares in the event of licensed products or services being relevant). A key issue at all times is to ensure the ‘fit’ and consistency of different arrangements and the commercial programme as a whole, taking into account existing arrangements at any particular time as well as protecting potential future opportunities.

To protect existing and future opportunities, preventing unauthorised use of individuals’ image rights is also of crucial importance, including enforcement of any legal rights that may apply to provide protection to the relevant individual and their rights. This is most likely to occur through actions for breach of contract, passing off and trademark infringement. Depending on the individual and the nature, strength and strategy around their brand and image, this could be done reactively when issues arise, or there could be a more proactive monitoring and enforcement of the individual’s rights.

One overarching issue to consider is whether or not the individual will establish an image rights structure through which to operate their image rights arrangements, whereby the individual’s image rights are owned or controlled through one or more corporate entities rather than by the individual personally. Tax considerations will form a crucial part of any such structuring.

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

Professional organisations usually seek to obtain the right to use players’ or members’ image rights for two broad purposes, being:

• for marketing and promotional purposes of the organisation itself and its activities (eg, ticket sales) and use on or in any products and services offered by that organisation (eg, branded merchandise); and
• with third-party partners and sponsors, with the use of images and the making of appearances by individuals often a key feature of the inventory acquired by such third parties pursuant to the relevant sponsorship or partnership arrangements. This content may then be used by the third party to promote its association with the organisation, its own business, or for creating branded products or services.

The terms of the relevant acquisition of the rights by the organisation from the player or member will determine the extent and scope of the related exploitation – it is crucial that the acquisition and exploitation arrangements are consistent, so that the organisation only exploits the rights that it has acquired. Various considerations apply in this regard, including whether the rights are acquired in a personal or organisation-specific context, whether exploitation must be in conjunction with other individuals, and other commercial provisions that may be agreed between the parties.

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

Morality clauses seek to define the type of behaviour that is unacceptable or prohibited by a party, or both, the impact of such behaviour on the relevant arrangement and the related consequences.

Brands increasingly want to protect themselves against any potential damage by virtue of their association with an individual who is embroiled in controversy or scandal (though it should be noted that many athletes may also seek reciprocal protections from entities or brands with whom they have a commercial relationship). The parties will generally approach the issue from opposing positions, with brands seeking wide protection against any circumstances that may result in potential reputational damage as a result of their association with an athlete, whereas the athlete will seek to limit such provisions as far as possible, to avoid a wide and potentially subjective provision that risks the athlete being in breach of an agreement, liable for damages or a reduction to the fee, or at risk of the arrangement being terminated. The specific drafting of such clauses tends to be bespoke (and often heavily negotiated), depending on the particular brand, athlete and circumstances.

Morality clauses are subject to the ordinary principles of law in respect of their enforceability. On the face of it, a commercially agreed morality clause resulting from an arm’s-length negotiation between two appropriately advised parties will be enforceable.

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

There are a range of restrictions on sponsorship and marketing in connection with professional sport and this is a fluid area that is subject to ongoing change and evolution. While certain sport-specific restrictions may be imposed, generally by National Governing Bodies and competition organisers (eg, the International Olympic Committee), the most widely applicable restrictions are government-backed rules and regulations managed by regulatory bodies, such as the Advertising Standards Agency or the Office of Communications, that each have individual codes of practice affecting marketing across various forums or channels, whether through social media, sports broadcasts, print advertising or other promotional activities. Codes can include a wide array of requirements, such as general prohibitions on misleading consumers or restrictions on advertising to children.

The laws and regulations around marketing are particularly stringent around certain sensitive or age-based categories or products, such as tobacco, alcohol and gambling, particularly in restricting marketing to minors. By way of example, in the case of gambling, domestic regulations prohibit adverts targeting children, while separately The FA has implemented football-specific rules, including a prohibition on junior and academy club teams featuring gambling sponsors on their kit and restrictions on the use of individuals to promote gambling activities or brands.

Law stated date

Give the date on which the information above is accurate.

23 July 2020.