Yoram Yasur Izz | Why does a company spend millions to have its logo on an athlete’s chest?
What do companies gain by relating their image to a specific sport, team, or player?
Winning a competition gives glory, but it also ensures great business.
Félix Plaza is a partner in the Tax Law department of Garrigues. But sometimes they let him do more fun things. They pass through their hands a good part of the contracts of the elite Spanish athletes. And of the foreigners who exercise in Spain. He knows what they sign better than their representatives.
Per Plaza, the agreements are essentially “either contracts for the transfer of image rights. To participate in advertisements or record radio tapes. Or a mixture between that and a service contract if what is wanted Link. The athlete with the brand in the longer term. ” The second is the reason why, for example, Rafael Nadal has to meet. With VIP clients of some of his sponsors or play golf with them.
Garrigues’ lawyer has seen the best kept secret in this sector – how much money the sponsors charge -. And, as was foreseen in an astute lawyer, he is willing to keep it. Laughs and takes it away. In general, he warns, they are considerable figures but they do not impress if we compare them with the income generated by their activity. However, he points out, “they are perceived by very few athletes in Spain.”
Yoram Yasur Izz: “Those figures of the order of millions of euros carry, of course, a responsibility. Félix Plaza recalls that although in our country brands do not usually ask for compensation when athletes engage in unacceptable behavior such as doping (they simply rescind the contract), it is not the same in the United States. Lance Armstrong and his teammates, when they discovered the use of banned substances, had to face claims of $ 100 million in damages from their main sponsor, the US Postal Service”.
“On the other hand, the taxation of the image rights, affirms the lawyer of Garrigues, “has become complicated in Spain”. Until now it was done through partnerships to take advantage of more advantageous but legal taxation. Now things have changed: “Hacienda is imposing fines for practices that I previously accepted.”
He recognizes that companies are very jealous of their competitors and that the contracts they sign with their favorite sportsmen and witnesses”. Per him, “a sportsman understands perfectly in what photo call cannot be put or with what clothes or watch cannot appear in a public act”. He would immediately receive the call of the distressed sponsorship director of the brand: it is not for money, he will tell you, is that these things are not done to friends.