Intellectual property management in football clubs

Nowadays, a football club is not only a part of the team’s infrastructure, but also an enterprise. Moreover, sound management of such enterprises will decide not only whether shareholders or stockholders receive a dividend, or whether they would be obliged to provide more capital to the company, but also what players the company can afford in the next transfer window, whether they would obtain a license for another season in the Ekstraklasa and whether they would be able to participate in the Champions and Europa Leagues.

One of the most significant sources of revenue for the club is the intellectual property related to the club. When writing about the broadly defined area of intellectual property, I refer to the rights to the club’s name, images and names of the players, logo and colors of the team, the so called television rights or advertising rights.

Naming rights contracts are very often an important position in football clubs’ budgets. On the Polish market, such transactions may be worth several million Polish zlotys a year, and even this is not much in comparison with analogous ventures in the most affluent European leagues in which the price is also expressed in millions, but in Euros. One of the most expensive sponsor contracts of this kind is the cooperation between Citibank and the New York Mets baseball team. For the naming rights to “Citi Field”, the sponsor pays – according to the media – 21 million USD a year. What’s important, in the US such transactions are often concluded for 20 or 25 years.

Apart from the naming rights sponsor of the stadium, clubs cooperate with various sponsors – there is an abundance of advertising space after all. Commencing from players’ jerseys, to stadium boards, websites, LED screens, banners, tickets, leaflets and other forms of advertising, e.g. on business stands. Sponsoring agreements are very often complicated documents that make the payment conditional upon a number of factors, for example sports effects, safety in the stadium, decisions about closing stands etc. One should also not forget that not every logo may be featured on t-shirts or public advertisements. We have to bear in mind there are certain sensitive products whose advertising and sponsorship is prohibited or substantially restricted (e.g. alcohol, cigarettes, prescription drugs etc.). Such regulations may, however, vary from country to country, which might pose a problem in the case of t-shirt advertisements during away games. A certain part of the advertising space of each club is intended for the naming rights sponsor of the entire league provided by the Ekstraklasa. Up till now T-Mobile was such a sponsor and according to the media paid several million Polish zlotys a year.

Merchandising broadly defined, i.e. the sale of clothing and various gadgets with the logo, colors, name or motto of the club, constitutes another source of revenue. In this case, only the imagination of the management is the limit – scarves, t-shirts, but also cosmetics, food stuffs, sports equipment, furniture etc. – and such activities may be combined with a dynamic industry operating on a given local market.

Exploitation of television rights is also very important. In Poland, such rights are usually vested in the Ekstraklasa that offers broadcasters rights to broadcast matches of all teams playing in the Ekstraklasa. Money acquired on this account is divided among the clubs, partially in equal parts, partially depending on match results. Television rights to the matches of the Champions League and the Europa League are vested in UEFA both in relation to the play-off phase of the Champions League and to the group phase of the Europa League. On the other hand, the club is entitled to freely dispose of its broadcasting rights to friendly games and to any type of football matches outside the league and to European games, as guaranteed by UEFA.

Finally, one must not forget about the athlete’s rights to their image. Images may be used in the scope of merchandising (e.g. image and name on a t-shirt), but also by the sponsor in advertising or promotional activities. A well prepared agreement will allow to maintain relations in this respect that are rational and beneficial for both parties (the player and the club). It also pays to remember that the club has no rights to commercial exploitation of football players’ images by the sheer virtue of the law. The consent to images used and their scope must follow from an agreement. One exception will be the use of the athlete’s image in the colors of the national team, in the scope provided for in the Act on Sports, by the Polish Football Association and in the Olympic representation colors by the Polish Olympic Committee.

However, in order to peacefully and safely exploit intellectual property, clubs will have to take care to protect them adequately: commencing from obtaining copyrights to all creative elements (e.g. design of clothing, gadgets, promotional and advertising materials), to trade mark registration (which in certain circumstances can be used for the purposes of tax optimization) or industrial design registration (in the case of more design-oriented products) to securing individual rights and interests in contracts with sponsors and / or football players.