1. The 4 Main Image Rights Models

1️⃣ The Personal Holding Company (PHC) Model

How it works: The athlete owns a company that licenses their image rights to sponsors and clubs.

Best for: Global superstars (e.g., Cristiano Ronaldo, LeBron James).

Tax benefit: Corporate tax rates (15-25%) vs. personal income tax (up to 50%+).

Example: Lionel Messi’s Messi Brands SL (Spain) manages his €100M+ endorsements.

2️⃣ The Joint Venture (JV) Model

How it works: The athlete shares image rights with their club/team (e.g., Real Madrid, NBA franchises).

Revenue split: Typically 50/50 or 60/40 (club/player).

Example: Jude Bellingham’s IRC shares revenue with Real Madrid.

3️⃣ The Offshore Licensing Model

How it works: The IRC is based in a low-tax jurisdiction (e.g., Gibraltar, Isle of Man).

Risk: Tax authorities (HMRC, IRS) increasingly challenge these structures.

Example: Neymar previously routed earnings through offshore entities before regulatory crackdowns.

4️⃣ The Trust & Estate Planning Model

How it works: The IRC is owned by a family trust for generational wealth.

Example: Lewis Hamilton’s IRC is linked to a UK trust for long-term asset protection.

2. Tax-Efficient Jurisdictions for IRCs

⚠ Warning: Tax authorities now enforce "Substantial Presence" tests—shell companies face penalties.

3. Sport-Specific Considerations

⚽ Football (Soccer) Players

Many clubs demand partial ownership of image rights (e.g., Real Madrid’s 60/40 split).

Tax risk: Spanish & UK authorities audit aggressively.

🏀 NBA Stars

The NBA’s group licensing program takes 8-15% of certain earnings.

State taxes matter: Playing in Texas (0%) vs. California (13.3%) impacts net income.

🎾 Tennis & Golf Pros

Players typically own 100% of image rights.

Example: Roger Federer’s Tenro AG (Switzerland) managed $1B+ in endorsements.

4. Compliance Risks to Avoid

🚨 HMRC’s "50/50 Rule" (UK) – If an athlete isn’t a global star, only half their image rights income may qualify for corporate tax rates.

🚨 IRS "Subpart F" Rules (USA) – Offshore IRCs may trigger immediate US taxation.

🚨 Club vs. Player Disputes – Gareth Bale clashed with Real Madrid over Wales national team rights.

Key Takeaways

✅ Choose the right structure (PHC for solo stars, JV for team athletes).

✅ Pick tax-efficient jurisdictions carefully—Switzerland & Gibraltar work for some, but not all.

✅ Comply with league rules (NBA, UEFA, NFLPA have strict policies).

✅ Document everything—tax authorities demand proof of commercial legitimacy.

Strathmore works closely with leading tax and legal advisors on optimum structuring for client’s NIL rights.

#Sportsbusiness #AthleteBranding #ImageRights #NILRights