MESSI v RONALDO: THROUGH AN IP LENS
It’s been so long the world watched a live football match from the top European Leagues so much that people don’t sound like themselves anymore. Who would have thought that “abstinence” from football can give withdrawal symptoms? If you don’t mind, let us bring back some football vibes – that’s all we are left with too.
Football is a powerful game and we quite agree. It’s the biggest sport in the world; a four billion fan base is no joke, you know. And if you ask any true football fan, this game is currently ruled by two men, who for several years have sparked debates as to who the true king is. You guessed right, Messi v Ronaldo (you can tell us your GOAT in the comment section).
At this point, we will discuss some points at which football and IP intersect, while comparing these two on those points, with the aim of helping to discern who is truly the G.O.A.T IP-wise. You ready? Then let’s kick-off this match-up, with a little IP concept called Image Rights
WHAT ARE IMAGE RIGHTS?
Image rights refers to the rights of certain bodies or organizations, to use the elements which come to constitute the likeness of a particular person for commercial purposes. That is, it is the right to use a player’s image, voice, catchphrase, and other things associated with that player’s likeness, for commercial gain. This is often done through endorsement, or sponsorship contracts. Image rights represent in this modern age of football, a huge source of income, especially for top footballers, as various companies will be looking to exploit the fan base of people like Ronaldo and Messi, to market their products.
VERSUS: when it comes to number of companies tapping into his image rights, Lionel Messi is currently said to have about 9 brands on his back, with a notable lifetime contract with Adidas, and other sponsorship deals with brands like Pepsi, Gatorade, MasterCard, and so on. However, in this round, the clear winner with a knock-out is Cristiano Ronaldo, with a shocking number of 31 endorsement deals, with a number of companies like Tag Heuer, Armani, his own life contract with Nike, Dolce and Gabbana e.t.c. This makes Ronaldo the most marketable football player on the planet.
TYPES OF IMAGE RIGHTS
Image rights as it relates to footballers comes in two forms. The first, Personal or Individual capacity; in which contracts are made with a player in his individual capacity alone. Hence, any representations by an endorsing company made will not incorporate the elements of his club or team in their marketing. Second is Club capacity; where contracts and advertisements made will be made through the player’s club and will involve the club’s identity in it, e.g Chivita CO’s advert involving Paul Pogba, Juan Mata and De Gea, all players of Manchester United.
VERSUS: Sometimes, there can be clashes in the negotiation between the two different forms. For instance, Cristiano Ronaldo holds a lifetime agreement with Nike, however, both his former and present clubs, that is Real Madrid and Juventus, are both sponsored by Adidas. Lionel Messi on the other hand, also holds a lifetime contract with Adidas, but his club Barcelona, has been sponsored by Nike for the past 20 years. Such arrangements are potentially harmful to the clubs considering that their respective sponsors are competitors.
HOW ARE THEY STRUCTURED
Image rights could be declared ordinarily as part of a player’s earnings. However, they will be taxed at a normal rate along with the rest of the person’s income, and in case you didn’t know, the tax rate for millionaire footballers is quite high; a whooping 45%. So what do players do to escape this tax encumbrance? They enter deals with IRCs. IRCs or Image Right Companies are companies created by footballers to which their rights are transferred to. The company takes ownership of the player’s rights, and exploit it commercially on his behalf. The result; the company which now holds the rights is taxed instead of the player, and they are taxed just corporation tax; at a mere 19%.
VERUS: In 2015, Cristiano Ronaldo sold his image rights to Singaporean billionaire, Peter Lim, who owns Mint Media to serve as an IRC for him. However, this author has found no evidence of Lionel Messi setting up an IRC for himself. Hence, this round awards points to Ronaldo for going a step further in protecting his IP.
While for footballers, IRCs represent a nice way to convert their earnings to dividends which are taxed at a lower rate, for others, especially the authorities, they simply represent a lacuna in the law which allow evasion of tax. However, problems arise, when players don’t even declare their income at all
VERSUS: Lionel Messi has, rather disappointingly been convicted twice for tax fraud. In 2016, he was convicted of tax fraud and sentenced to a 21 month imprisonment term, after discovering his evasion of over €4 million in tax. Ronaldo on his own end is no saint, as he had to pay a €19 million settlement fine to the Spain Finance ministry, after being found guilty of evading over €14.7 million in tax on Image Rights earnings. There will be no winners in this round, as this author will not award points to law breakers.
Footballers are very popular people. As such, a lot of products are sold in their name, and they might seek to protect their brand, hence the importance of getting their brand trademarked.
VERSUS: When it comes to Trademark protection, Cristiano Ronaldo doesn’t seem to be doing too badly, with 47 registered marks globally (for marks using his name or the phrase CR7). However, the winner of this round without much argument, goes to Messi, who leads the game with 76 active registrations, for registrations using his name, logo, signature, and stunningly, he holds a trademark for his son.
The final whistle has been blown, and the results are in. When it comes to Trademark protection, Lionel Messi leads every player in the world, and making over 27 million Euros annually from his endorsements is not bad. Ronaldo on the other hand, may not be the leading trademark protecting player, but when it comes to the worth of his Image Rights, makes over 47 million Euros, almost double that of Messi, plus he has an Image Right Company. And so the winner is;….. completely up to you of course. It would perhaps amount to injustice for this author, to project one player as better than another, when both of them have an IP game almost as spectacular as their game on the pitch.
Author: Chiziterem Ogbonna