Valuing Sports Image Rights for commercial and tax purposes
By Prof Dr Ian Blackshaw
Sports Image Rights, known variously as personality rights and rights of publicity, are a very valuable component of the sports marketing mix, and require careful handling for commercial and tax purposes. Take, for example, the cases of Messi and Ronaldo, the subjects of earlier posts on the GSLTR website.
The increasing attacks by Tax Authorities on schemes to mitigate the tax payable in respect of the commercial exploitation of sports image rights – not least those by the UK Tax Authority (HMRC), who refer to such arrangements as ‘aggressive tax avoidance’, particularly in relation to the English Premier League Clubs and players – the need to establish that image rights, claimed by players and paid for by their clubs and third parties, actually exist and also the need to value them, for commercial exploitation, has likewise increased exponentially.
Under English Law, image rights are recognised as such for fiscal purposes, following the ruling in the Sports Club Case (Sports Club plc and others v Inspector of Taxes  443). However, HMRC have never been happy with this appellate decision, which is still the Law, and are now arguing that this case did not set a precedent but should be considered only as a decision based on its own special facts and circumstances.
In order to satisfy the increasing demands of Tax Authorities, not least HMRC, such valuations need to be independent and rendered by professional valuers with a track record, who are few and far between in practice.
Once such valuer is Athena Constantinou, the Managing Director of APC Sports Consulting of Nicosia, Cyprus. By background, she is a certified public accountant and auditor, and, as such, has twenty years of professional experience in valuing intangible assets, especially brands, including the image rights of sports personalities. She is also a member of the prestigious Sports Financial Advisors Association.
In fact, over the years, she has developed a sophisticated method of valuing these rights, based on her extensive professional experience in this field. Such valuation method, which takes into account several economic factors, including financial and country risk factors, is known as the APC Brand Evaluator ®, which she has registered as a trademark in various service classes under the Nice Classification of Goods and Services.
She has also established a dedicated website at ‘www.sportsimagerightsexpert.com’, which provides further information about the range of her professional services in valuing, protecting, commercialising and setting up bespoke structures to mitigate the corresponding tax effects.
As she has remarked, on more than one occasion, for such structures to be legally effective and pass muster with Tax Authorities, there has to be, fundamentally, a commercial basis for them.
She is also available to act as an expert witness on the valuation of sports image rights in any disputes arising, particularly, between football clubs and players with their Tax Authorities.