Protecting the celebrity image

Nov 2, 2023·

1 min read

In the evolving commercial landscape, the image and likeness of celebrities, particularly sports stars and entertainers, have become crucial branding assets. Recognising the finite nature of their careers, these individuals need to secure expert legal, financial, and tax advice early on. The Image and Likeness Deed is key to this planning, where a sportsperson or entertainer assigns the rights to exploit their image and likeness to a related trust or company. This assignment allows the entity to earn assessable income, not classified as personal services income.

These deeds typically grant a related company or trust the right to license the celebrity’s image and likeness in return for employing them to perform specific services. This arrangement is pivotal in sponsorship or endorsement agreements, where clarity is needed on whether the compensation is for personal services or licensing image and likeness.

The Australian Taxation Office (ATO) has been auditing these arrangements since 2004, particularly focusing on how funds are apportioned in endorsement agreements. There is a growing trend towards distinguishing player engagement through separate 'player contracts' and 'marketing contracts', reflecting the increasing value and complexity of image rights in the sports and entertainment industries.