Image Rights Companies in football – where are we now?

By Keith Laker

Last month we tweeted a link to an article written by Pete Hackleton and promised to revisit this with our own comments. In his article, Hackleton provides a neat history of how image rights structures have evolved over the last two decades and how the current status quo with HMRC was arrived at. Two things emerge from the article very clearly: firstly that the value of image rights can often be much more than the performance fees and secondly the nature and commercial reality of the licensing structure(s) is crucial to it proving acceptable to the taxman. Any doubts about the magnitude of image rights is convincingly removed when Hackleton points out that David Beckham’s total contract value over his four year contract with Real Madrid, was recouped during just six months worth of shirt sales. (That’s millions of euros worth of income on just one product associated with the player concerned).

Image Rights then are big business and need to be handled appropriately. Icondia uses the Guernsey Image Rights Register as part of its strategy to provide the best possible image rights protection and we’ve found in our discussions with potential clients that there are some common misconceptions regarding the Guernsey Image Rights Register, including the following:-

“It’s Guernsey – therefore it must be a tax product”

Well no, that’s not what drives this. It’s good law that provides the unique selling point of the Guernsey Image Rights Register. It moves Image Rights into the realm of property law, which brings with it clarity and certain statutory rights.

“But registration in Guernsey takes me offshore for tax”

Not necessarily so. Just because one’s image rights are registered on the Guernsey Image Rights Register does not mean that’s where they are held. If one holds those rights personally, they will be taxed in accordance with the rest of one’s personal affairs. Alternatively, one can hold them in a company for example – but the location of the company can be anywhere, as determined by appropriate tax advice. The point simply is that it’s a matter of choice.

“Registration in Guernsey means undoing all of the existing contractual arrangements”

Again – not so. Registration, if undertaken correctly, will recognize existing contracts and will serve to strengthen those arrangements, simply because the underlying image rights have ceased to be abstract concepts but have become genuine property rights. Registration in Guernsey should be considered as complimentary to, and not in competition with, existing arrangements.

Returning to Hackleton’s theme of corporate structures for image rights, it should be clear that registering image rights in Guernsey achieves several positive things: Firstly (and unlike current English law), it recognizes that image rights exist as personal property and it creates statutory rights where none existed before. Secondly, it provides a genuine reason to use a Guernsey corporate structure to hold these rights and should therefore help dispel any question of ‘artificiality’ where the use of a Guernsey holding company is considered. Furthermore, it is arguable that by creating legally robust image rights, their value is enhanced, which of course might just mean that the split in value between performance fees and image rights fees is something that needs to be re-evaluated. That undoubtedly is a question best answered by the likes of Pete Hackleton and other tax experts.


This note is only intended to give a brief summary and general overview of this area of law. It is not intended to be, nor does it constitute, legal or tax advice and should not be relied upon as doing so.

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© Icondia 2014