Through image-rights companies, teams or corporate sponsors pay players for using their names and pictures in promotions and advertisements and on products such as sneakers and soft drinks. Players, who own the image-rights companies, can borrow or invest the money, or take it as a dividend at a lower tax rate than if it were paid as salary. Much of the tax avoidance in soccer, including Messi’s, involves these companies, which are often established in tax havens.
In Spain, players can legally receive 15 percent of their pay from teams through image-rights companies to compensate them for using their likenesses in promotions.
In some cases, players with no marketable image have received as much as 50 percent of their total compensation in payments to their image-rights companies, said Dan Clay, a U.K.- based tax adviser who works with soccer players.
“It’s been abused,” Clay said. “In a lot of cases the boundaries have been pushed and no real commercial justification has been given.”
David Beckham
For a player like David Beckham, the former English national team captain who played four seasons with Real Madrid, “the club finds it very easy to justify it,” Clay said. “The club can exploit his image and earn 10 times what they’ve paid him. The problem comes when there is a player no one’s heard of.”
As the money in soccer -- called football in Europe -- has soared with its global popularity and the signing of lucrative television deals, team owners have become more secretive about their finances, and compensation packages for players have become more complex, creating more opportunities for avoiding taxes, said Alex Cobham, a research fellow who studies taxation and inequality at the Center for Global Development in London. Tax avoidance in the sport has probably reached billions of euros, he said.
“The history of football, particularly in the last 30 or 40 years, is one, at best, of financial opacity and dubious dealings,” Cobham said. “Clubs have been increasingly aggressive in looking for ways to find an advantage.”
Bread, Circuses
Clubs in La Liga, the Spanish league, owed 690 million euros in back taxes as of March. Atletico Madrid’s unpaid taxes built up over 13 years to 115 million euros last year, Chief Executive Officer Miguel Angel Gil said.