Is it time for clubs to end goal bonuses and put players on flexible pay?

Discussion in 'Pitchside - Football Forum' started by Kopstar, Mar 27, 2017.

  1. Kopstar

    Kopstar ★★★★★ Valued Member

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    So asks Sean Ingle in this excellent article from Sunday's Guardian

    Rewarding players based on a team’s performance – rather than individually – makes sense in the modern Premier League. But how many clubs are prepared to risk it?

    It was a classic local newspaper story from the mid-90s, joyfully regurgitated for the social media generation. “I’ve had enough Yorkshire puds, says United star Yeboah” ran the clipping from a 1996 copy of the Yorkshire Evening Post which did the rounds on Twitter last week, along with the story of how the Leeds striker’s unique bonus – two puddings per goal, plus one for each for his team-mates – had ended because “the Ghanaian hotshot’s goal-grabbing exploits have earned him so many puds he had to say ‘no more thanks’.”

    I thought of that heartwarming tale while listening to the sports lawyer Ian Lynam, who has spent more than a decade acting for players and clubs on transfer deals and contracts, make a fascinating admission: that despite all the money that has flooded into the Premier League since then, most teams are getting their pay and bonus cultures wrong.

    As Lynam explained in his talk to the MIT Sloan Sports Analytics Conference in Boston, Massachusetts, one top-six English club have a bizarre eight-page contract solely for individual bonuses – which involves eight algebraic equations taking in various performance metrics. “And eight is at least seven too many,” he quipped. “And no player understands it, which rather defeats the object.”

    Another club, in the bottom half of the table, give their players an extra win/draw bonus in their first and last six Premier League games of the season – which makes no sense given one set of games isn’t any more valuable than any other. And what if a club are already relegated after 32 games? Then there is the cautionary tale of a Championship club who gave their squad an £8m bonus for making the play-offs – only to be left with a black hole on their balance sheet when they failed to win promotion.

    As Lynam pointed out, although revenues and wages have kept galloping upwards almost all Premier League sides are now also confronted by potential problems lurking in the undergrowth. For lower-half teams, relegation is a potential £100m-plus kick to the guts. While for the top six, failing to make the Champions League is a £40m hit. Yet most player contracts do not do enough to reflect this dynamic.

    His solution? More variable pay for players to reward the most consistent performers when a team are successful – and soften the financial impact of failure. And scrapping all player bonuses for goals, assists and clean sheets. As Lynam explains, this is needed because “Players will inevitably act to maximise what they are paid for but that might hurt the team. A striker, say, might shoot from poor positions to try and score more goals rather than play in a team-mate”.

    Lynam highlights the advantages of variable pay by comparing two Premier League sides in the top six with very similar wage bills. Club A pay just 66% of their players’ wages as a fixed sum, and the other third based on Champions League qualification (12.5%), whether they played at least 60% of competitive games (12.5%), and the rest on trophies and awards won.

    Club D, however, pay 98% of their players’ wages per week, with only 2% set aside for bonuses, because they feel that top of the market salaries mean players will perform to the best of their abilities week in and week out.

    In Lynam’s view, Club A’s approach has two key advantages: first, if they miss out on the Champions League they only lose £20m while Club D suffer double that. Second, players who don’t turn out regularly put less stress on the wage bill.

    “Football is, frankly, a very conservative industry, which means there is a kneejerk reaction to variable pay,” Lynam says. “Some think players won’t accept it because the industry is used to having X amount a week basic, but my experience says otherwise.”

    Yet for flexible pay to work, Lynam says clubs have to sell it by focusing on the greater amount a player could earn if his team is successful. So if someone is worth £100,000 a week they need to be offered the opportunity to earn £120,000 if things go well, and £80,000 if things go to pot.

    Such discussions are not always straightforward. “With one player, we went into a negotiation believing his value was £150,000-a-week – that was the number we wanted to get to,” he says. “And then the club emailed an £85,000-a-week with bonus offer. The player’s agent thought it was an insult. But when we used analytics to work out what he was likely to earn, it was between £110,000-130,000 a week, a perfectly reasonable early offer. However because of the way the club had presented it, there was a massive loss of goodwill.”

    Despite Leicester’s heroics last season there is strong correlation between the size of a club’s wage bill and their league position. And it remains the case that the absolutely best strategy for a team to succeed in the Premier League will always be to pay far more than anyone else. But in the era of financial fair play, it is harder for clubs to repeat Chelsea and Manchester City’s old trick. They have to act smarter. And that includes paying smarter.

  2. Wyld@Heart

    Wyld@Heart Well-Known Member

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    I bet we're the club with the 8 page, equation laden contract that nobody can understand ;-)
  3. Kopstar

    Kopstar ★★★★★ Valued Member

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    I'm pretty sure I know A-E, not sure on F though.

    May as well give my guesses - don't think I'm betraying confidences in doing so.

    A - City, B - Liverpool, C - Chelsea, D - United, E - Arsenal
    Last edited: Mar 27, 2017
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  4. Jase

    Jase Well-Known Member

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    If they're working from known figures rather than just hypothesising, could F be Leicester? Might be considered an interesting, if unusual, team to include in the mix.. or any (other) bottom half club would probably fit that scheme.

    I've often (half jokingly) said, all players at all clubs should be on a percentage of pay system. Something like the following.

    Play 55 minutes or more of all competitive games that week.
    Win: 100% of stated contract
    Draw: 80%
    Loss: 60%

    Play less than 55 minutes.
    Win: 80%
    Draw: 60%
    Loss: 40%

    This is so far from perfect that it would only serve as a very rough starting point.. but you get the drift.

    The biggest problem I can see with it would be consistency across players, clubs and leagues. It would need to be a FIFA/UEFA directive with constant monitoring and heavy penalties if it would have any chance of working.

    Ultimately though, it comes down to perceived effort for me. I don't begrudge any of these guys the amazing job they have or the pay they're on (ok maybe a little bit), but it rubs me up the wrong way something chronic when you see players amble around the park, sometimes en masse, like they don't give a monkeys. Every player should be wrecking themselves to give 100% all the time imo.

    Back on topic... i'd say from an agent's (and player's) point of view, performance related bonuses are fine as long as they're a very small part of the overall, or almost a given before a ball has been kicked eg a big team qualifying for Europe. If there's too many in there that require a player and the rest of team to have an above-average season, they may look elsewhere.

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