Sport nowadays is big business and worth 3% of world trade and accounts for 3.7% of the combined GNP of the Member States of the European Union. That is, a staggering €407 billion; and sport employs 5.4% of the EU labour force, that is, some 15 million people.

Not only are mega sums generated by the sale of sports broadcasting rights, especially to major sports events, such as the FIFA World Cup, and other major football tournaments and leagues,3 but also through the commercialisation of the sports image rights of well-known teams and sportspersons, especially professional football clubs and players. For example, Singaporean billionaire, Peter Lim, acquired on 29 June 2015, the image rights of the football super star, Cristiano Ronaldo, for a six-year period, believed to be for a mega but undisclosed sum, stating that:

Ronaldo is not just a great soccer player, he is also a very popular personality ….[and]…. I am confident that the Cristiano Ronaldo brand will continue to grow.”

And Ronaldo commented as follows:

This is a very strategic move for me and my management team to take the Cristiano Ronaldo brand to the next level, especially in Asia.”

According to Sepp Blatter, the former President of FIFA, the World Governing Body of Association Football, sport is now a product in its own right. And, football, for example, is not only the world’s favourite game, but also the world’s most lucrative sport. The value of the European football market is now estimated to be worth some €28.4 billion.4

Image Rights

Image rights are now a permanent and significant component of the sports marketing mix, not least in the commercialisation of football clubs and players, so, what do they comprise?

Image rights are widely defined, using the expression ‘image’ not in its narrow sense of ‘likeness’ but in its wider sense of ‘persona’ or ‘brand’ to use a marketing term.

In Proactive Sports Management Ltd v. 1) Wayne Rooney, 2) Coleen Rooney (formerly

McLoughlin), 3) Stoneygate 48 Limited, 4) Speed 9849 Limited,5 a high-profile case involving the sports image rights of the former Manchester United striker and England captain, Wayne Rooney, the English High Court defined these rights (at para. [187]) as follows:

Image Rights means the right for any commercial or promotional purpose to use the

Player’s name, nickname, slogan and signatures developed from time to time, image,

likeness, voice, logos, get-ups, initials, team or squad number (as may be allocated to the

Player from time to time), reputation, video or film portrayal, biographical information,

graphical representation, electronic, animated or computer-generated representation

and/or any other representation and/or right of association and/or any other right or

quasi-right anywhere in the World of the Player in relation to his name, reputation,

image, promotional services, and/or his performances together with the right to apply for

registration of any such rights.”

As will be seen from this judicial pronouncement, image rights are widely defined.

Image rights are also known by different names and subject to different legal treatment in different jurisdictions around the world.

In the United Kingdom, they are known as image rights; in Continental Europe, as personality rights; and, in the United States, as publicity rights.

In Continental Europe and in the United States, image rights are generally recognised for legal purposes.6

Whereas, in the United Kingdom, image rights per se are not legally recognised,7 except for tax purposes, following the UK Tax Appeal Decision in the Sports Club case in 2000.8

In this Case, Arsenal Football Club succeeded in having payments made to offshore companies in respect of the Club’s exploitation of the image rights of their players, David Platt and Dennis Bergkamp, classified, for tax purposes, as capital sums and, therefore, non-taxable as income.

Thus, at first sight, since the Sports Club case, the recent important UK Decision in the Geovanni Gomez case (the Geovanni case),9 released on 22 March 2019 by the UK First-tier Tax Tribunal (the Tribunal), might seem to strike a fatal blow against image rights tax mitigation schemes in football.

In that case, the Tribunal held that the image rights payments made to the football player, Geovanni Gomez (Geovanni), were taxable as part of his income and, as such, did not fall within the tax parameters recognised in the earlier Sports Club case.

The Geovanni Case

In this case, the facts briefly were as follows.

Hull City Association Football Club (Hull) entered into an Image Rights Agreement with an offshore service company, Joniere Ltd, registered in the British Virgin Islands, to which one of its players, Geovanni, had assigned his image rights. The Agreement covered non-UK image rights only. The UK rights were covered by the player’s contract with the Club.

The payments made by the Club to the offshore company in respect of the overseas image rights of Geovanni amounted to £440,800.

The Tribunal held that the substance of the payments should be considered rather than their form. On this basis, the Tribunal, in deciding the case, took into account the following key findings of fact:

  • Whilst it is not only players in the “elite group of recognisable sports people” who have image rights with an overseas commercial value, but what makes a player sufficiently recognisable for their image rights to be valuable will include: talent; the league in which they play; the team for which they play; and possibly other personal attributes (such as their nationality).

  • Clubs who intend to acquire and exploit players’ image rights would be well advised to keep negotiations of that agreement separate to the salary negotiations and to ensure that the valuation of image rights is documented by reference to a business case for the initial acquisition, together with analysis monitoring the effectiveness of the exploitation of the rights over the period of the agreement.

  • Hull did not, at the time, have the experience, resources or ability to exploit the commercial opportunities associated with players’ overseas image rights. The Club’s two principal sponsors were based in Hull and yet the domestic market was, notably, not covered by the image rights agreements.

  • No due diligence was carried out by Hull in relation to Joniere and there was no evidence that the Club had ever taken steps to ascertain whether or not Joniere actually owned Geovanni’s image rights. In the circumstances, nobody at the Club could reasonably have believed, at the time, that Geovanni’s overseas image rights had any commercial value.

  • Geovanni’s basic wage at Hull under his playing contract was £748,800 and the annual ‘image rights’ payment of £187,200 was exactly 25% of that sum. However, there was no reliable evidence as to how the parties had arrived at the amount of the annual image rights payment and no valuation advice had been sought or received by Hull at the time.

Taking a realistic view of the facts of the case, therefore, the Tribunal concluded that the reason that Hull took no steps to exploit Geovanni’s overseas image rights was because it never had any clear intention, plan or real interest at any time in commercially exploiting those rights.

The Tribunal also came to the conclusion that the payments claimed to be made in respect of the overseas image rights were, in fact, made in order to encourage Geovanni initially to enter into - and then to extend - his playing contract with Hull; the duration of the overseas image rights agreement was coterminous with his playing contract. In other words, the payments made by Hull for Geovanni’s overseas image rights were a reward for his services as a footballer and formed part of his playing earnings.

Based on all these factual findings and applying the legal principle of substance over form to the case, the Tribunal held that the overseas image rights payments were part of the player’s earnings from his employment with the Club and taxable as such.

Under this principle, a realistic view of the payments, as opposed to relying on the legal form in which they are expressed to be made, as evidenced by the contracts entered into between the parties, is applied. Thus, the club should have deducted and accounted for income tax and national insurance on the payments.

In other words, the ruling established, almost twenty years ago, in the leading UK Sports Club case, namely, that payments under an agreement for the use of the image rights of a professional football player can, in principle and according to the particular circumstances, be treated separately, for tax purposes, from the playing activities for which the player is employed by a club, was not applicable according to the particular facts and circumstances of the Geovanni case. In other words, the Geovanni case was decided on its own particular facts and merits and does not, in the view of the authors of this article, overrule the Sports Club case decision, which is, therefore, still good law!

In summary, the Tribunal held that the payment arrangements in the Geovanni case with the offshore company had no substance to them and, therefore, could not escape being taxed as income. In other words, this was a decision based on the particular facts and circumstances of this individual case.

Lessons to be learned from the Geovanni Case

So, what are the lessons to be learned from the Geovanni case?

The core issue, when structuring image rights deals from a tax sheltering point of view, is that there must be a real and commercial basis to the image rights payments, and they must make sense financially. If these criteria are not satisfied, then the payments for the rights will be treated as income and taxed as such.

Also, the player must also have a certain celebrity status in order to justify actually having image rights to commercialise and financially exploit in the first place. Otherwise, the payments will again be a sham and not pass the close scrutiny of the Tax Authorities, who seem to have declared war on image rights deals – not least, HMRC (Her Majesty’s Revenue and Customs), the UK Tax Authority. There seems to be a general view that image rights of footballers are overvalued and represent a form of so-called ‘aggressive tax avoidance’. Such an expression seems to be a contradiction in terms, since tax avoidance is perfectly legal, whilst tax evasion is not and is, in fact, a criminal offence, which, in extreme cases, may result in a custodial sentence and/or a hefty fine. See the recent case of Ronaldo in Spain where he was fined €18.8 million for tax fraud involving the commercial exploitation of his very valuable image rights.

The image rights must actually be exploited and used by the player’s club. In other words, the club must, in fact, be paying for something that it is receiving and getting value in return for the use of the player’s image rights. There must be a ‘quid pro quo’ for the image rights payments.

Again, the value placed on the image rights being exploited must be a defensible one and in proportion to the amount paid for the playing rights. This is where an independent third-party professional valuation of the image rights concerned comes into play and is essential.

There also need for there to be separate negotiations and separate documentation in respect of the playing rights and the image rights at all times, which should never be dealt with in the same document. Full records of negotiations should also be made and retained.

Valuation of Sports Image Rights

As was shown to be patently lacking in the Geovanni case, there is a need for the image rights to be properly valued and justified, for tax and other purposes, rather than picking a figure out of thin air! Or using a percentage of the value of the playing rights.

APC Sports Consulting have developed a professional system of independently valuing sports image rights, which is based on a reliable and realistic methodology, known as the APC Brand Evaluator ®.

Placing a value on a sport’s personality’s image rights is not an easy exercise but a complex one.

It requires a certain expertise and skill in evaluating intangibles and a tried and tested methodology. It also requires an in-depth knowledge and experience of the Sports Industry. In particular, the factors relating to the development of the sport’s personality as a ‘brand’ in his/her own right, in his/her own particular sport, and at his/her own stage in his/her own sporting career.

Also, as part of the evaluation process, risk factors relating to the particular sport’s personality need to be taken into account. Particularly, depending on the sport concerned, the risk of injury, which could be temporary or permanent leading to the end of the sport’s personality’s career.

Other considerations, such as age and life-style, and the popularity of the sport concerned, need to be factored into the valuation process to achieve a reliable figure that can be defended in commercial negotiations and also, equally importantly, before Tax Authorities.


The Geovanni case must serve as an object lesson on how not to structure image rights arrangements, for tax purposes, and the detailed critique of them by the Tribunal in its decision will repay careful study to avoid the pitfalls identified when negotiating and formalising image rights deals.

Just setting up an offshore image rights company is not enough to avoid tax. In particular, it should have real substance and be organised and managed accordingly with competent personnel.

It is submitted that tax sheltering arrangements of sports image rights deals are, by no means, dead, but can be set up and managed successfully, if scrupulous attention is paid to the above considerations and the pitfalls exposed in the Geovanni case are avoided, despite the fact that Tax Authorities are out for their pound of flesh and, accordingly, will do their upmost to strike them down at every opportunity.

You have been warned!

1 Prof. Dr. Ian Blackshaw is an International Sports Lawyer and Special Consultant to APC Sports Consulting, Nicosia, Cyprus, and may be contacted by e-mail at ‘’.

2Athena Constantinou is the Managing Director of APC Sports Consulting and may be contacted by e-mail at ‘’.

3 The cost of the English Premier League broadcast rights for the seasons 2019-2022 have increased by 8% to €12 billion.

5 [2010] EWHC 1807 (QB).

6 In Continental Europe, image rights are protected by Constitutional provisions, and not all States in the US legally recognise them.

7 See the Australian Case of Victoria Park Racing & Recreation Grounds Co Ltd v Taylor (1937) 58 CLR 479.

8 See Sports Club plc v Inspector of Taxes [2000] STC (SCD) 443.

9 Hull City AFC (Tigers) Limited v HMRC [2019] UKFTT 227.