Should Managers Get Transfer Bonuses?

Is there a conflict of interest when managers get bonuses for selling players at a profit? Should managers only get rewarded for on-pitch success? Daniel Storey asks questions...

Last Updated: 01/02/12 at 10:48 Post Comment

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Although there are many aspects of the case of HMRC vs Henry James Redknapp that I have no desire to address until a judgement has been made, there was one subject raised by the prosecution last week that did strike a chord. It was revealed that during his tenure at Portsmouth, Redknapp had a clause in his contract stating that he would be paid a 10% bonus on net profit made by selling players (subsequently reduced to 5%).

After getting past the obvious jokes - 'Pardew owes Dalglish a pint or two' chief among them - the revelation at Southwark Crown Court surely raises questions of integrity and morality. Although there is nothing legally corrupt with the agreement, should a football manager not be rewarded solely for on-field success rather than being awarded a bonus for economic profit?

The first necessary observation is that Redknapp is not alone in such a stipulation. Ian Holloway has admitted that he receives 5% of all net annual profit from sales at Blackpool. Furthermore, Holloway sees no problem with the situation. And why would he, with a reported £250,000 pocketed from the Charlie Adam deal to Liverpool alone.

My worry concerns the evident potential for conflict of interest. A degree of selfishness is inevitable within human nature, so if a manager knows that he can become a millionaire through the sale of a key player, will a manager not be tempted to sell, even if it does not necessarily benefit the team? At best, the decisions of managers may become blurred as they aim to offset personal gain against tactical and economic logic. Traditionally, the role of the manager is to achieve the best possible league position, allowing the chairman responsibility for the sale of players and balancing the books. Managers receiving a percentage of transfer profit blurs the two roles.

In addition to this, it also leads to suspicion surrounding our managers. What if certain individuals set up relationships with their peers? Two managers could agree an extortionate fee for a player with the selling manager offering a cut of his bonus to the buying manager. There is no insinuation that Holloway or Redknapp had ulterior motives, but it is naïve to assume that all managers are as honest. History and experience confirms this naivety.

Or am I being too distrustful and world-weary? That's certainly the opinion of Holloway in explaining his clause: "If a club sells my best three strikers and makes the team worse, why shouldn't I get something out of it for my family? It's my job to make the players better and if I do, the chairman is happy to share the profits out." Holloway is also keen to point out that such bonuses equate to a fraction of his potential income should Blackpool have stayed up.

In any case, if the chairman and the board continue to have the final say on transfers then it would become glaringly apparent if a manager was making recommendations for his own personal gain. If a manager did so then they would not only be relieved of their duties with immediate effect but also presumably struggle to gain alternative employment. It would be the action of a very foolish man. Managers may try and inflate a fee in order to get maximum pay-out, but this is nothing ground-breaking and would have reciprocal benefits for the club.

At lower-league level I can see the intelligence and attraction of such clauses (Dario Gradi at Crewe has worked on such terms for years) because managers have a reason to remain despite their club's policy of allowing nurtured young talent to move on. Gradi's job at Crewe (particularly during the late 80s and early 90s) cannot be underestimated. If he played such a large part in Crewe's existence, there is no reason why he should not be remunerated for his continued excellence in the field of youth development. Even so, there are alternative compensatory measures available.

At a higher level such agreements are fraught with danger. In many ways we have an affinity with our football managers. In working to the aim of getting clubs as high up the table as possible, they are 'one of us', whereas chairmen have the often unenviable task of providing a backdrop of reality to our dreams. We dare to believe that managers care solely about league and cup success over balance sheet benefits.

Despite Holloway's protestations, with recent financial scandals at the highest level within Italian and Turkish football, we must be looking for transparency above all else. At a time of instability within our game, anything that conjures images of dodgy deals with brown envelopes in out-of-town car parks at dusk, should be enough to instigate a change. Without wanting to display tabloid paranoia, if the common consensus is that something sounds a bit dodgy or off-kilter, it is best avoided.

There may be nothing wrong with such contract stipulations, but we must be able to find alternative ways of rewarding our managers, or murkiness rules. If this is deemed to be a bridge too far, the least we should expect is for such arrangements to be publicised. The common belief is that people are secretive when they have secrets. The least we deserve is to be proved wrong.

Daniel Storey - follow him on Twitter

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