Someone explain managerial contracts to me

RGDATA!

This is following on from reports that Rafa is being offered 3m to quit so they don't have to pay him 16m (wtf?) if they sack him.

This makes no kind of sense to me (and actually I simply don't believe it as reported).

I can understand where Real have head-hunted Mourinho, they offer him a huge compensation clause to get him on board. I can't grasp that Liverpool were so desperate to keep Benitez a year ago (when he signed a new contract) they offer him this crazy deal that leaves them out 16m if they sack him in a years time.

This is not just about Liverpool though, you see it all the time in the premiership, though it's usually just a footnote in the story when a manager is sacked.

Hull couldn't afford to pay Phil Brown the 1.5m he was supposedly due despite a horrendous last year in charge which lead to his sacking.

But how did he ever get a deal like this in the first place? Bonus for promotion from championship, hefty raise - fair enough. New deal which says even if you make a complete arse of it and get us relegated we'll still pay you a fortune?

mayordenis

Because legally they he hasn't breached his contract so it essentially amounts to being paid the remainder of his contract

RGDATA!

mayordenis wrote: »

Because legally they he hasn't breached his contract so it essentially amounts to being paid the remainder of his contract

ok, but why doesn't the contract say (in Rafa's case) something like:

In the press release - Liverpool board back Rafa with 4 year contract worth Xmillions

in reality - year to year contract at same wages, but Ythousands for your remaining years if we sack you

was Phil Brown worth so much to Hull when they were promoted, were other clubs beating down the door so much that they had to offer him a deal where he would get huge compensation for guiding the team back to the championship?

dreamers75

Take the Real job normally 3 years money for 1 years work.

if you want a certain manager you have to offer him X if you want him to stay you offer X in compensation etc:

Completley retarded considering the shortsightness of owners/board.

RGDATA!

Benitez/Brown were already under contract. I'm not harping on these two, just two examples i used in OP.
Why don't liverpool think - well we might want rid of him in a year or two, lets work that in to the deal, and it's hardly the end of the world if he doesn't sign a new contract - we won't owe him a penny.

I don't understand how the manager seems to have all the cards in these negotiations.

PHB

RGDATA! wrote: »

ok, but why doesn't the contract say (in Rafa's case) something like:

In the press release - Liverpool board back Rafa with 4 year contract worth Xmillions

in reality - year to year contract at same wages, but Ythousands for your remaining years if we sack you

Contracts can say that. Terminiation clauses are different for each contract. But ask yourself, would you want to sign that contract? If you were in the position of power, you'd want as much security as possible if you wanted to remain in the job.

JPA

Imagine a club signs a new player they rate highly, should they give him a 1 year or a 5 year contract?

It's beneficial for both to sign a relatively long contract.

ArmaniJeanss

Its a very EPL thing that you must have a manager on a long term contract otherwise you are creating instability within the club which will lead to the poor little superstars not being able to do their stuff on a Saturday afternoon.

To an extent it stems from MUFC not being able to win anything in Fergies Final Season (MK1) a few years ago. This was generally put down to his impending retirement rather than just an acceptance of the statistical probability that MUFC may go a year without winning something.

Obviously this doesn't apply to them foreigners, with the likes of Spain able to win Euro2008 despite Aragones's imminent departure, or Inter Milan doing the treble despite everyone knowing TSO was leaving at the end of the season.

So it leads to Benitez and other managers getting 5 year deals and Capello being able to make a few 'I might be going' suggestions to the tabloids and geting a renewed contract before a World Cup after which the tabloids will be calling for his head when England likely underachieve (by not winning it comfortably).

Dempsey

No manager in the world is going to sign a contract worth x amount but has clause where the board can sack you for an amount that isnt the full worth of the contract.

Managers want job security & stability in their lives. They want time to do their work and if clubs had the opportunity to sack managers for nominal fees then the merry go round would be going alot faster.

I think Mark Hughes had a compensation agreement whereby, his final settlement is dependant on how quickly he gets another job. You dont see him rushing out for another job probably because it pays him to sit at home and chill out.

ilovelamp2000

In general terms the way it works is as follows.

Firstly the manager agrees to manage for the length of the contract, the club agree to pay him for the length of the contract.

If the club want to end the contract, the manager is entitled to seek payment for the entire length of the contract but the club can stop him from taking up other work for the length of the contract. Under contract law a person is under a duty to mitigate their losses, i.e. seek other work. So a manager is effectively forced to look for other work and if it was to go to court they would never get the full amount under the contract (unless there was a specific termination clause stipulating it) because if they had another job there would be less of a loss or possibly none at all.

So offering 3m to Benitez in settlement of the contract leaves him free to take on other work and leaves Liverpool free to take on a manager who is capable of doing the job.

RGDATA!

Dempsey wrote: »

Managers want job security & stability in their lives. They want time to do their work and if clubs had the opportunity to sack managers for nominal fees then the merry go round would be going alot faster.

good point, and i understand this. that is why managers get highly paid in the premiership and get these kind of compensation clauses and i don't begrudge them - if they can command it, fair enough. It just seems like clubs should be in a stronger position in terms of negotiating, certainly in the lower tier premiership coaches. A job with a bottom-mid table prem club is a huge opportunity for lots of managers, it should command a decent salary, but should also be incentivised. if clubs are going stand to lose millions by being relegated or by missing out on champions league football, these aims should be incentivised for managers. If they are going sack you for failing to achieve these aims, they shouldn't write it in to your contract that you will be paid as if you'd done a perfect job regardless

Paulegend

its not just manager contracts though. albeit there is a difference between manager contracts and player


but lets say we sacked Gerrard in the morning. we told him sorry Stevie but your not needed. we would legally have to pay him until he finds another club. but usually clubs just offer compensation with the idea the player can sign for another club straight away.

this is technically the way manager contracts work aswell

as Rafa's contract was worth 4 million a year it means if he is sacked now we still owe him 16 million for the next 4 years. but for him to recieve that he wont be able to work until the contract is up.

the 3 million is a compensation offer. if we offer him 3 million he can sign for any club whenever he likes