Germany Employment Law Update: No obligation to contribute to the artists’ social security fund for advertising with football coaches

With its judgment of 30 August 2021 – S 8 R 316/17, the Social Court of Darmstadt (SG) has for the first time made a decision on the obligation to pay for artists’ social insurance (KSV) when commissioning active trainers for advertising purposes. The SG has transferred the supreme court case law on the freedom to contribute to the commissioning of active athletes for advertising purposes to an active coach, even if he is in fact not an athlete.

The facts:

The parties argue about the obligation to pay for artists’ social insurance in the years 2011 to 2015. The plaintiff is a well-known automotive company established in Rüsselsheim (O). It has signed the coach (K), who was employed in the 1st Bundesliga at the time, as an advertising medium. K is now employed in England and is one of the most successful German professional coaches. The defendant – the German Pension Insurance (DRV) – carried out a tax audit of the plaintiff in June 2016. It came to the conclusion that the remuneration paid by O to K for advertising services triggers a tax obligation to KSV under the Artists’ Social Insurance Act (KSVG) and set an additional claim against KSV in the amount of € 387,700.46. The O defended itself against this with the objection that the K as a football coach was not an artist within the meaning of the KSVG, and was therefore not subject to any tax liability to the KSV.

The plaintiff initially conducted opposition proceedings without success, but remained persistent and subsequently brought an action before the competent social court. There, the plaintiff was successful. The Sozialgericht upheld the action in that regard and annulled the contested decision.

For the reasons:

In the opinion of the SG, the case law of the Federal Social Court (BSG), judgment of 24 January 2008, Az.: B 3 KS 1/07 R on the freedom to contribute to the commissioning of active athletes for advertising purposes, is transferred to an active coach, even if coaches are not athletes. Because the decisive factor is:

• that artists are only those persons who practice art so sustainably that it can be regarded as an essential characteristic of the person;
• whether someone is an artist within the meaning of the KSVG, consequently the respective performances of the coach are to be assigned to the field of sport or that of art. The scope of protection of the artists’ social insurance includes such performances in which the artistic content is clearly in the foreground. For the demarcation, the perception of traffic is decisive and must be based on the entire appearance of the activity to be evaluated, as well as on the actual circumstances.
• that the activity of a trainer, which is largely an annex to his activity as a trainer, is not subject to any contribution obligation.

According to the considerations of the SG, the commissioning of the K for the O is not subject to contributions. Anyone who appears in front of the camera as a trainer for advertising purposes is not only an artist according to § 2 sentence 1 KSVG.

The income from and with K is not generated by an independent creative artistic activity in advertising, but solely because of his popularity in professional sports. The K has earned its income from the advertising contract with O without giving up its coaching activities. At the same time, the personal rights were assigned to the O by K.

Nor does it depend on a comparison that K’s activity could also have been taken over by a famous or well-known actor, which could be used to justify an artist position and thus an obligation to contribute. This comparison is contourless, because a replacement by a non-contributory assignment of an active athlete instead of an actor is conceivable.

Comments on the judgment:

Keep your eyes peeled when choosing a partner! A contribution obligation towards KSV exists if the contractor is an “artist” within the meaning of the KSVG. Whether this is actually the case requires a concrete examination in individual cases. However, if trainers as testimonial provide advertising services as an annex to their main occupation on the sidelines, there is much to be said for freedom of contribution.

By Can Yurtseven, MELCHERS, Germany, a Transatlantic Law International Affiliated Firm.  

For further information or for any assistance please contact germany@transatlanticlaw.com

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