Posted: 10 / 05 / 2024
More money than ever before is being invested in the sports and media sectors. Professional sportspeople and media personalities can earn huge amounts of money from being the faces of well-known brands and endorsing products or services to their fans.
The digital world provides elite athletes, TV personalities, and online influencers with a massive commercial opportunity. Reaching a global audience has never been easier, and because of this, power is increasingly centred on these individuals to help brands reach potential customers. Up-and-coming stars can build an audience of thousands (or even millions) of people around the world that their views and opinions can influence.
Therefore, these stars must consider the value of their “image” at an early stage. This value is distinct from their value in appearing in television programmes, selling albums, or playing football. Attributing a value to one’s image is not an exact science, but consider this: the value of an established star’s image could far outweigh the fee for their day job. David Beckham is a great example, with the value of his personal brand far exceeding his salary as a footballer towards the end of his playing career.
Any fees payable for the use of one’s image would typically be paid to the legal owner of that image. This allows, in the right circumstances and with careful planning, income from exploiting one’s image to be paid to a limited company rather than to the individual. The result could be a huge tax saving, with corporation tax rates currently set at 25%, compared with a maximum income tax rate of 45%.
In the professional sport and media sector, it’s never too early to take advice on the value of one’s image rights. As you would expect, there are many things to consider to avoid problems with HMRC. It is crucial to consider the star’s entire business model, with paperwork and record-keeping being critical to maintaining compliance with tax law.
Particularly for sportspeople, careers can be short, so it is vital to work with a team of advisors with experience working with high-profile clients who can help structure their affairs to protect their financial future.