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Football: an easy but unjustified target for critics who do not consider contractual implications

By April 7, 2020No Comments

Footballers at the elite-end of the game are being asked (forcefully) by certain authorities and organisations to take ‘pay cuts’, allegedly to ease the economic burden caused by the current medical pandemic.  The ‘outcry’ comes after many clubs have placed their non-playing staff onto the ‘Furlough Scheme’.

Does it do justice to draw comparisons with non-playing employees of a Football Club, many of whom have been “Furloughed”? When highlighting the issues and triggering debates it is important to draw adequate contractual comparisons and ensure material considerations are not omitted.

The reality is that elite footballers do fall outside the commercial viability of the Furlough Scheme. Therefore, any significant reduction in their salaries must be voluntary, hence the emotional pressure being applied in some quarters.

This article does not seek to argue against the purported moral duties some impose on footballers. Gordon Taylor, Chief of the ‘Professional Footballers’ Association’ makes good work in this regard. Rather, this article very briefly ‘snaps back’ by highlighting just a few of the (otherwise many) potential contractual implications of succumbing to the ethical cries for salary reductions.

Those of us who are aware of the Premier League’s Standard Contract Clauses between Club and Player will know what they entail. Expressly or impliedly, it is arguably a contractual duty of a player to do what he reasonably must to keep himself in good medical and fit match-playing condition. This is during the ‘on’ and ‘off-season’. Even if a player were under no such contractual duty, commercially the pressure is on them and their clubs to ensure players maintain their commercial peak.

Exceptionally, although matches are indefinitely suspended, we are still within the course of a playing season. The matches could start again in June and may do so without much notice. It does not take a footballing expert to recognise that players cannot ‘turn-on’ their physical condition at a ‘switch of a button’. The onus is on players to maintain an adequate solo training regime and diet (provided by their employer, even during these times), which during normal times would account for the vast majority of their employment duties. It does not contractually follow that because they are not now playing matches (that account for only a small part of their employment duties) that they should now take significant salary reductions. Unlike the ‘kit-man’ or ‘stadium stewards’, players are still required to perform the vast majority of their employment duties.

The absence of matches does not assist calls for a reduction in salaries. In fact, those of us who have worked with ‘Player-Club Contracts’ will know that a very significant part of a player’s remuneration derives from Performance Bonuses following their individual statistics after each match and their club’s achievements at the end of a playing season. Thus, when the public hear that a player earns, say, £1m per annum, this does not account for important uplifts that a player is currently losing due to the medical pandemic.

The financial reality for players is that like any other reasonably prudent person they would have budgeted and accounted for certain expectations arising out of their Performance Bonus Schedules. For example, it would have been well within the reasonable ambit of ‘Liverpool FC’ players to have assumed winning the Premier league immediately before the game was put into suspense. Certainly, they could have taken it for granted that they would have received the ‘Champions League Qualification Performance Bonus’.

One or more of Liverpool FC’s younger players who have recently been propelled to the top of the game might not yet be earning the kind of basic, guaranteed salary that others do (yet still beyond Furlough territory). It is conceivable that these young premier league elite were relying upon and expecting their bonuses at the end of the season. Being young and excited about their newfound wealth some may have done what many often do by spending their bonuses before they have physical possession of the money. Whether it is luxury car finance or a mortgaged house for their parents to live, it is a common occurrence.

Separately and additional to working on their fitness programmes provided for by their employers and maintaining their commercial values, players are also expected to maintain an ambassadorial role for their clubs. They are expected always to maintain commercial public appearances and behave in line with standards expected of their clubs and supporters (perhaps the basis upon which they are pressurised into conceding salary reductions). Pertinently, there have been recent reports of players breaking ‘lockdown’ guidance. These reports have been followed by public persecutions and internal punishments.

If following forced discussions with the Premier League and their clubs, players are pressured into varying their contracts and taking the ‘salary-cut’ many are calling for, would they then be contractually entitled to expect a relaxation of the scrutiny in which they are subjected to both publicly and internally? Would they be entitled to disregard their individual training programmes and jeopardise their physical condition and commercial value, as part of any contractual variation?

Before we are quick to judge, let us remember that the elite earners in the game are few and that the vast majority of the game’s players are expected and have a contractual duty to remain physically fit, commercially viable ambassadors to their employers and supporters. Despite what is going on in the world players are still expected to fulfil their employment duties and they are expected to do so while their contractual entitlements in the form of Performance Bonuses are in jeopardy because of a threat to the conclusion of the playing season.

Like everyone else in society, players’ professional and personal lives have already been significantly disrupted. In fact, the disruption to their professional lives came before the ‘lockdown’ with the FA having suspended matches and placed their contractual entitlements in jeopardy before the government’s decision to close businesses. During and after this time (and until recently) non-playing employees were still working and receiving their full contractual entitlements.  As though this were not enough footballers are now being pressurised into conceding a large proportion of their basic salaries, much of which is taxed for the benefit of the NHS and other government schemes.

Another material omission in the recent reporting (in this context, at least) is the impact of a reduction in salaries on players who are ‘out of contract’ by 30 June 2020. There are players reaching the end of their careers and who are unlikely to have the same commercial value that they once did. These players are undoubtedly relying on the balance of their remaining salaries and Performance Bonuses to have at their and their families’ disposal when their playing days are numbered. At times like these it ought not be so easy to forget that footballers have short careers compared to those who remain employed and paid by clubs well beyond the era in which the generations of elite stars embrace the game.

It must logically follow that any attempt to place players and club owners under pressure to agree salary reductions by comparing the situation to non-playing employees, is just not commercially or contractually credible. Most of the non-playing staff are not required contractually to maintain the level of commercial value the players must through fitness regimes and their ambassadorial roles. Club owners know that, at least in the short term, players are less easily replaced than non-playing staff. Supporters notice very quickly when their ‘star striker’ is overweight and not performing or has been sold to a rival club. Despite their important backroom roles, supporters fail to notice when the ‘kit-man’ has been replaced, at least until now.

Let us consider this: whether it is in the form of government grants, Business Rates Relief, the Furlough Scheme, or the array of other government incentives and short-term financial compensation thrown at the economic oppression strategy adopted to fight Covid-19, businesses, employees and the wider society will one day be paying it all back, in abundance. Football is no different; if we force the clubs and players to enter contractual variations in terms of the key clauses dealing with remuneration then expect a commercial and performance backlash.

If you are a supporter of a football club who is struggling to keep hold of its best players because of salary caps, then expect your club to be piercing the financial ceiling and dangerously overstretching itself to compensate players when the game finally re-starts. If forced to vary their contractual entitlements and potentially relax their ongoing individual training programmes in return, those supporters who heckle abuse at players from the terraces for being in poor physical condition would have much to shout about when the league re-starts. Worse still, if clubs and players are forced into discussions neither really want to have, there poses a real risk of a breakdown in relationship and losing those players to clubs who are prepared to remedy the financial damage caused.

Prior to the cries for reduced salaries clubs were quietly able to save money on players’ remuneration from not paying sums that otherwise would have become due by now pursuant to Players’ Performance Bonus Schedules. This form of mitigation is something most clubs would have been happy to accept quietly and without too much imminent noise from the players.

Perhaps now the contractual dilemma has awakened, clubs and players may do well to agree a brief deferral of salaries (rather than a reduction) and, if at all financially possible, reconsider the extent to which certain non-playing staff are placed on the Furlough Scheme. At least this might silence the calls for the time being.

By John Yianni