Don't make players pay for failure

It has been reported that Gary Megson has taken to bringing a giant cheque, of the type normally reserved for pools win­ners’ photographs, into the West Brom dressing room to remind his players how much they would make in deferred bo­nus payments if the team stay up. It hasn’t worked – to date he has brought out the big cheque three times and the team have lost each match.

Time perhaps to try the opposite approach, with a mock­ed-up wage slip showing each player how much he would lose from his monthly salary if the team are relegated. Card­board facsimiles may become as much a feature of pre-match team-talks as the clenched fist and group huddle if the Football League’s proposals for “divisional pay”, announced at the end of February, are accepted.

The League want all future players’ contracts to allow for automatic wage cuts in the event of rel­egation, up to 50 per cent in the case of clubs going down from the Premiership, 25 per cent in the other divisions. “It would stop clubs committing them­selves to wages that are completely un­sustainable,” said League spokesman John Nagle.

Clearly, a large number of clubs are being affected by the fall in revenue that accompanies relegation and there is a general acceptance that wage levels will have to drop and that playing squads will get smaller over the next few years. As with proposals for a salary cap, however, players are to be asked to bear the cost of their clubs’ financial mismanagement and, in effect, take the blame for the debts built up through years of spending more than was being earned. In any case, football’s financial meltdown over the past year provides evidence that the League’s proposal wouldn’t work. Derby County are one of several clubs who anticipated the likely effects of relegation by having some degree of automatic wage reduction built into players’ contracts. Yet they still found themselves having to offload their star players when the transfer window opened to help stave off the threat of administration.

At the many clubs where debts run into tens of millions, an even more drastic step, like cancelling players’ contracts wholesale, would only make a small dent in a club’s overdraft. (The departure of almost an entire first-team squad is in any case a likely effect of divisional pay being brought in, as players whose sal­aries will be automatically cut look to move on to clubs where such restrictions aren’t in force.)

Even if clubs did save money through players accepting reduced salaries, recent history suggests that many will spend even more trying to clamber back on the gravy train. If the football authorities want to curb clubs’ wayward spending they should look more closely at the ease with which boards of directors acquire the cash to fund their ambitions. Much has been written about the way in which Leeds dug themselves into a deep hole by negotiating advances on projected future income, but their neighbours Bradford City pursued a course that was even more catastrophic. Under the chairmanship of Geoffrey Richmond, Bradford were one of several clubs who built up debts through “sale and leaseback”, where a financial institution pays for the purchase of a player and is repaid, at exorbitant interest rates, over the duration of the player’s contract. (Other clubs have used this form of funding to lease their stadiums.)

The advantage of sale and leaseback is that debt built up is with a bank and not another club, circumventing League rules that require clubs in administration to settle transfer debts before being allowed to continue with their fixtures. It is estimated that English football clubs, borrowing like compulsive shoppers with a wallet full of credit cards, currently have a total of around £150 million tied up in this form of funding. Yet when clubs go into administration, and creditors have to settle for a small proportion of the money owed to them, the club owners look to blame the players’ salaries for the mess they themselves created.

The first things that should be cut in the event of relegation – yet funnily enough don’t form part of the proposals – are the chief executive’s salary; the directors’ expenses and membership of any FA committees (especially ones involving overseas travel); and the boardroom drinks bill. It might not do that much to solve the crisis, but it would probably do wonders for team spirit.

From WSC 194 April 2003. What was happening this month

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