Court Of Appeal Agrees That Agreement For Wayne Rooney's Image Rights Was In Restraint Of Trade

Proactive Sports Management Limited v Rooney and Others [2011] EWCA 1444

When Wayne Rooney had just turned 17, his image rights company (Stoneygate) entered into an agreement with Proactive. The original agreement, which was for an eight year term, covered both on-field representation (i.e. in relation to Wayne Rooney's playing contracts) and off-field representation (sponsorship deals etc), although that agreement was subsequently varied to separate the two forms of representation. The image rights agreement continued to be for a term of eight years.

The main point of contact for Wayne Rooney within Proactive was Paul Stretford, a company director and an FA licensed football agent. In 2008 there was breakdown in the relationship between Paul Stretford and Proactive ending with Mr Stretford's dismissal from the company. Mr Stretford established his own company and took Wayne Rooney's business with him. Stoneygate refused to pay invoices raised by Proactive and sought to terminate the image rights agreement, which Proactive accepted as a repudiatory breach of contract. Proactive claimed the 20% commission as set out in the agreement. Stoneygate defended the claim on the grounds that the agreement was void for mistake (dismissed straight away by the Judge) and on the grounds that it was unenforceable as being in restraint of trade.

The High Court gave judgment in favour of Stoneygate. He noted that FIFA regulations imposed a limit of two years for on-field representation for professional footballers. This agreement was for eight years which made it not merely unusual, but unique. He found that the agreement imposed significant restrictions on Wayne Rooney's freedom to exploit his talents as he could not enter into contracts with any firms which were Proactive's competitors. It was relevant that Rooney was only 17 at the date of the agreement and that the eight years would cover approximately half his football career. The Judge further considered the following: that there was a flat 20% commission, irrespective of the amount of business generated: that the terms of the agreement were dictated by Proactive without Wayne Rooney having any legal representation; and the agreement was not in standard form. The Judge dismissed Proactive's arguments in justification of the agreement: that: in paying Wayne Rooney £75,000 upon entering into the Image Rights Agreement, there was a risk that it would not recover its initial financial investment (risk...