Arkansas recently joined the ranks of states recognizing the need to help their citizens protect their “publicity rights” from unauthorized commercial use.
In May, a bill known as the Frank Broyles Publicity Rights Protection Act, sponsored by State Sens. Jon Woods and Uvalde Lindsey and State Reps. Greg Leding, Lance Eads and Micah Neal (all state representatives with a Broyles family member within their respective districts) was passed and signed into law by Gov. Asa Hutchinson. The legislation is designed to protect a person’s legacy both in life and afterward.
It was initiated by family members of one of Arkansas’ most famous figures, after a number of individuals approached the Broyles family with a desire to promote products using the Broyles name and Coach Broyles’ signature. The intention was to not only protect the legacy of Coach Broyles, but also to protect any other citizen of Arkansas whose publicity rights may be exploited for commercial use without prior consent. Approximately 23 other states recognize by statute some form of protection for publicity rights, while roughly another 13 protect such rights through the common law.
The new law provides greater protections for citizens of Arkansas by recognizing exclusive property rights to one’s name, voice, signature, photograph and likeness. All of these attributes encompassed by the right of publicity have value and, as this protection is inheritable, citizens of Arkansas with some notoriety should be prepared to address these rights in their estate planning documents.
Fifty years ago, we would not have expected the continual commercialization of Elvis so long after his passing, nor would we have expected how far-reaching the use of voice and likeness could be with our ever-expanding technology. Technology allows greater commercialization through the use of holograms and expansive proliferation of images online. Forbes now maintains a list of top-earning dead celebrities that includes Prince (#5), Elvis (#4) and Michael Jackson (#1), whose estate has reportedly generated more than $1 billion in revenue by licensing his name, likeness and music.
As fame becomes more tangible with social media and YouTube accessibility, the planning for publicity rights usages has extended to more people and for longer periods of time.
The continued commercialization of publicity rights does not come without struggles, however. The recent deaths of Michael Jackson, Whitney Houston and Prince have demonstrated that without clear estate planning, the Internal Revenue Service (IRS) may come calling for estate taxes, and its method of determining the value of publicity rights may create more burdens than benefits.
In the estate of Michael Jackson, the IRS evaluated the projected income stream for the remaining life of the publicity rights and valued the publicity rights at $434 million. The estate valued the same publicity rights at a mere $2,105. It is important to note that because publicity rights are fully transferable, they can be valued by the IRS at their highest profiting commercialized use and taxed at that level. Unfortunately, there’s very little precedent on how to value these post-mortem rights of publicity. The Jackson estate is still disputing the valuation of the publicity rights, and trial is set for February.
The estate of Whitney Houston also is disputing the valuation of her publicity rights, though the discrepancy is only $200,000 in that estate. Both Houston’s and Jackson’s estates show how speculative valuation for publicity rights can lead to differing results and how detrimental inadequate estate planning can be.
Estate planning has contended with intellectual property holdings for a number of years. Now, as much as ever, it is prudent to have your estate planner in discussion with your intellectual property attorney so you can properly plan for the future, in whatever form it takes.
Meredith Lowry is an attorney with Wright, Lindsey & Jennings LLP in Rogers. She can be reached at [email protected] The opinions expressed are those of the author.