Tottenham Transfer Talk- Image Rights
Tottenham Transfer Talk - Image Rights
 |
| Spurs are working to resolve the Paulo Dybala image rights situation |
Good morning everyone on this fine Thursday morning, the final day of the transfer window when clubs desperate to get rid of players do deals they wouldn't do earlier in the window.
A prime example is Paulo Dybala who we are in negotiations for, for €20m (£18.48m - $22.46m) less than Juventus were asking earlier in the window. That's 74% of the Ryan Sessegnon fee.
If you didn't read the last post, Star Image- a Maltese company (I believe the tax rate is 5% in Malta), held Dybala's full image rights from 2016 to 2017 and they're now reportedly claiming legality in any deal.
If you didn't read the last post, Star Image- a Maltese company (I believe the tax rate is 5% in Malta), held Dybala's full image rights from 2016 to 2017 and they're now reportedly claiming legality in any deal.
They are asking for €40m (£36.95m - $44.91m) from the player or either club, they don't care who pays them as long as they get the money they feel they are due.
-------------------------------------------------------
Important Notice: I am not a financial expert and this is not my specialist subject area. I have researched this article and nothing within it should be construed as financial advice. It is written, as everything is on this website/blog, for entertainment purposes only.
------------------------------------------------------
So what are image right, they clearly add up to a significant figure, which is in addition to their wages.
They can include the name of a player, his nicknames, likenesses of him, his image, photographs, his signature, his autograph, his initials, statements about him, any endorsement, physical details, his voice and other personal characteristics. Anything that identifies him basically.
Commercial deals are the driving force behind football. They dictate whether a club is successful or not. A club with greater and more expensive commercial deal generate more income than other clubs, thus they can afford higher wages and higher transfer fees for the better players.
That, in turn, means they have a greater chance of winning trophies (26 of the 27 Premier League trophies have been won by clubs with more money than us).
A did the calculation once and for all the trophies not won by clubs with more money than us since the Premier League began, we had won 25% of them. The opportunities for us to win have been minimal, thus the need to increase club income has been of paramount importance.
This is where the anti-Levy toxic minority misunderstand Daniel Levy. They don't understand how success is built, they don't understand how it is achieved, they don't plan for success in their own lives and planning long term, then walking along that path, is a totally alien concept.
Run the club how they want to run it and Spurs would not grow, commercial income would not grow, we would be where Newcastle United are. They were the 7th richest club in the country, but while we grew and have just enjoyed a Champions League final, they keep fighting against relegation with no hope of winning anything at the top table.
As a Spurs fan, that isn't my desire for the club. Right, off the tangent and back onto image rights.
A club pays a player to endorse and promote a number of specific commercial deals. These companies all want to be associated with the brand and or high profile players within that brand.
The Champions League, therefore, is vital to promote the brand around the world as a top name brand, which in turn generates more and bigger commercial deals.
Standard Premier League contracts stop a players image rights simply being used with every sponsor, there is a stipulation in Premier League contract rules that specify how they must be related to the number of first-team appearances a player makes.
Let me ask you a cynical question. Does this explain why there are so many late substitutions in the last minute? The referee adds 30 seconds on every time there is a substitution so how long does a substitute to actually come on. Are a club really wasting time as most believe or is this simply a commercial exercise to give more image rights opportunities to the commercial sponsors?
Ok, let's reign that back in a bit. A specific image rights element within a players contract counteracts this. The Premier League contract applies to all players without an image rights element in their contract with the club.
So if the club want to use a player widely commercially and all sponsors want the instantly recognizable and best-known players, the club has to have an image rights agreement in place for them.
Players, as you know sign their own commercial deals, so it is absolutely essential that a club has an image rights deal signed with the player so they have control over what the player can and can not do. You wouldn't want a player signing up to a rival of one of your sponsors after they have signed for you, your sponsor wouldn't be too happy.
Gareth Bale has commercial deals for image rights that are specific to him playing for Real Madrid. In other words, he has to be playing at Real Madrid to earn any revenue from them at all, thus extracting him from the Spaniards is a very complex negotiation. it is about far more than just his wages.
In the case of Paulo Dybala, his image rights are owned by a third party, Star Image, so Spurs must come to a commercial agreement with Star Image as well as Juventus as well as Paulo Dybala as well as the agent working for Dybala, Fabio Paratici.
Four, maybe five agreements to reach with different partis to sign one player.
Just like you, a player is the subject of HMRC tax payments through the PAYE scheme, meaning the club pays tax on a player's earnings before payment to him, just in the same way you get paid.
Now we are not going to go deep into tax here, thank god I hear you cry, but a player pays 45% tax on earnings over £150,000 after personal allowances I believe and National Insurance Contributions.
Now, if a club is paying an image rights company, then they don't pay 45%, they pay Corporation Tax which I believe is due to drop to 18% in 2020.
Paulo Dybala's image rights, owned by Star Image, based in Malta, where I mentioned in the last article they pay 5% tax.
45% tax to 5% tax is a big leap and that gives you a basic understanding, I hope, of why image rights are so important.
Of course HMRC see this as avoiding tax and try to cut down on it while companies try to find ways of avoiding the cutting down of it.
In addition, a club does not have to pay National Insurance contributions on image rights income.
Are you starting to see that financially, image right are rather a key area and involve large amounts of money. OK, now times that by 25, the number of players in a Premier League squad.
I take you back to Star Image and their demand for €40m (£36.95m - $44.91m), that's one player!
Now let me give you a rough figure from 2017. A player earning £35,000 a week (£1.8m annually) with an image rights agreement would have saved the club roughly £190,000 a year in tax payments.
How many players would a squad have on that level and how many would be eaning more and remember there are 25 in a named Premier League squad. Not inconsiderable figures.
Rather than trying to prevent this HMRC are working to try and control it, put it within limits.
History lesson.
In the 2000's clubs saw this as a way of avoiding tax so started paying sums for image rights that didn't really have any commercial value. If you paid youngsters or a reserve goalkeeper perhaps a chunk of image rights money to lower his salary,
HMRC started asking clubs to justify these payments and demonstrate how their image had been used commercially, when of course it hadn't, or not to the extent that justified the level of image rights payment.
Most clubs were investigated, most clubs reached a settlement with HMRC and most Premier League clubs forked out large payments to them for the period up to 2010.
Since then image rights have to be properly structured and you have to be able to justify payments, but HMRC do recognize they are a legitimate form of income.
Image rights to a player must not exceed 20% of their salary in the UK now I believe and image rights payments as a whole must not exceed 15% of commercial income.
So who is off to become the face of their company and ask for image rights.
A complex issue that is a part of every transfer negotiation and with Paulo Dybala, with several companies.
-------------------------------------------------------
Important Notice: I am not a financial expert and this is not my specialist subject area. I have researched this article and nothing within it should be construed as financial advice. It is written, as everything is on this website/blog, for entertainment purposes only.
------------------------------------------------------
So what are image right, they clearly add up to a significant figure, which is in addition to their wages.
They can include the name of a player, his nicknames, likenesses of him, his image, photographs, his signature, his autograph, his initials, statements about him, any endorsement, physical details, his voice and other personal characteristics. Anything that identifies him basically.
Commercial deals are the driving force behind football. They dictate whether a club is successful or not. A club with greater and more expensive commercial deal generate more income than other clubs, thus they can afford higher wages and higher transfer fees for the better players.
That, in turn, means they have a greater chance of winning trophies (26 of the 27 Premier League trophies have been won by clubs with more money than us).
A did the calculation once and for all the trophies not won by clubs with more money than us since the Premier League began, we had won 25% of them. The opportunities for us to win have been minimal, thus the need to increase club income has been of paramount importance.
This is where the anti-Levy toxic minority misunderstand Daniel Levy. They don't understand how success is built, they don't understand how it is achieved, they don't plan for success in their own lives and planning long term, then walking along that path, is a totally alien concept.
Run the club how they want to run it and Spurs would not grow, commercial income would not grow, we would be where Newcastle United are. They were the 7th richest club in the country, but while we grew and have just enjoyed a Champions League final, they keep fighting against relegation with no hope of winning anything at the top table.
As a Spurs fan, that isn't my desire for the club. Right, off the tangent and back onto image rights.
A club pays a player to endorse and promote a number of specific commercial deals. These companies all want to be associated with the brand and or high profile players within that brand.
The Champions League, therefore, is vital to promote the brand around the world as a top name brand, which in turn generates more and bigger commercial deals.
Standard Premier League contracts stop a players image rights simply being used with every sponsor, there is a stipulation in Premier League contract rules that specify how they must be related to the number of first-team appearances a player makes.
Let me ask you a cynical question. Does this explain why there are so many late substitutions in the last minute? The referee adds 30 seconds on every time there is a substitution so how long does a substitute to actually come on. Are a club really wasting time as most believe or is this simply a commercial exercise to give more image rights opportunities to the commercial sponsors?
Ok, let's reign that back in a bit. A specific image rights element within a players contract counteracts this. The Premier League contract applies to all players without an image rights element in their contract with the club.
So if the club want to use a player widely commercially and all sponsors want the instantly recognizable and best-known players, the club has to have an image rights agreement in place for them.
Players, as you know sign their own commercial deals, so it is absolutely essential that a club has an image rights deal signed with the player so they have control over what the player can and can not do. You wouldn't want a player signing up to a rival of one of your sponsors after they have signed for you, your sponsor wouldn't be too happy.
Gareth Bale has commercial deals for image rights that are specific to him playing for Real Madrid. In other words, he has to be playing at Real Madrid to earn any revenue from them at all, thus extracting him from the Spaniards is a very complex negotiation. it is about far more than just his wages.
In the case of Paulo Dybala, his image rights are owned by a third party, Star Image, so Spurs must come to a commercial agreement with Star Image as well as Juventus as well as Paulo Dybala as well as the agent working for Dybala, Fabio Paratici.
Four, maybe five agreements to reach with different partis to sign one player.
Just like you, a player is the subject of HMRC tax payments through the PAYE scheme, meaning the club pays tax on a player's earnings before payment to him, just in the same way you get paid.
Now we are not going to go deep into tax here, thank god I hear you cry, but a player pays 45% tax on earnings over £150,000 after personal allowances I believe and National Insurance Contributions.
Now, if a club is paying an image rights company, then they don't pay 45%, they pay Corporation Tax which I believe is due to drop to 18% in 2020.
Paulo Dybala's image rights, owned by Star Image, based in Malta, where I mentioned in the last article they pay 5% tax.
45% tax to 5% tax is a big leap and that gives you a basic understanding, I hope, of why image rights are so important.
Of course HMRC see this as avoiding tax and try to cut down on it while companies try to find ways of avoiding the cutting down of it.
In addition, a club does not have to pay National Insurance contributions on image rights income.
Are you starting to see that financially, image right are rather a key area and involve large amounts of money. OK, now times that by 25, the number of players in a Premier League squad.
I take you back to Star Image and their demand for €40m (£36.95m - $44.91m), that's one player!
Now let me give you a rough figure from 2017. A player earning £35,000 a week (£1.8m annually) with an image rights agreement would have saved the club roughly £190,000 a year in tax payments.
How many players would a squad have on that level and how many would be eaning more and remember there are 25 in a named Premier League squad. Not inconsiderable figures.
Rather than trying to prevent this HMRC are working to try and control it, put it within limits.
History lesson.
In the 2000's clubs saw this as a way of avoiding tax so started paying sums for image rights that didn't really have any commercial value. If you paid youngsters or a reserve goalkeeper perhaps a chunk of image rights money to lower his salary,
HMRC started asking clubs to justify these payments and demonstrate how their image had been used commercially, when of course it hadn't, or not to the extent that justified the level of image rights payment.
Most clubs were investigated, most clubs reached a settlement with HMRC and most Premier League clubs forked out large payments to them for the period up to 2010.
Since then image rights have to be properly structured and you have to be able to justify payments, but HMRC do recognize they are a legitimate form of income.
Image rights to a player must not exceed 20% of their salary in the UK now I believe and image rights payments as a whole must not exceed 15% of commercial income.
So who is off to become the face of their company and ask for image rights.
A complex issue that is a part of every transfer negotiation and with Paulo Dybala, with several companies.
COYS
Post a Comment