What’s In A Name?
Endorsement income associated with the names of sports stars and celebrities often far exceeds salaries paid by respective clubs and countries.
For athletes like Rafael Nadal, endorsement income can exceed prize money and appearance fees by up to 4 times. However, for many other less famous stars with shorter careers or ones blighted by injury, this income is their lifeblood and what they rely on to survive or bridge them until they forge alternative incomes.
Exploitation by unauthorised association with celebrity names is as old as the hills and the advent of digital and social media has taken it to unprecedented levels.
Mohamed Salah, a famous footballer, for instance, had his name exploited by his own country’s Football Association. This prompted a public outcry in Egypt, ultimately leading to government intervention.
Trademarking is the first step towards protection and it is not only the personal names but also associated nicknames, acronyms, abbreviations, logos and designs—be it Ronaldo’s CR7 or Tiger Woods’ ‘TW’, the value of which was temporarily ‘dented’ with (ironically not his own) a swing of a club 😉
Even the names of children of celebrities have an associated value. Beyoncé, for example, has been fighting since 2012 to claim the name of her daughter—Blue Ivy—which had been opportunistically registered and exploited by an event company beforehand.
Trademarking, in addition, creates the potential for the externalisation of what is referred to as ‘image rights’, used primarily to mitigate taxation in order to maximise endorsement income after tax. The caveat, as with any tax structure, is that it must be legitimate. Profiteering by agents such as Jorge Mendes, is to be cautioned against, the avoidance of which will be dealt with later in our series of articles.
The development of Image rights in South Africa lags far behind our international counterparts, largely attributable to draconian exchange controls maintained by the reserve bank (SARB) and restrictive fiscal practices of the South African revenue services (SARS). This has resulted in the common law effectively endorsing the restrictive approach, which will be dealt with in the article to follow in the next few weeks.
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