Setting The Standard - Are Player Contracts the Epitaph of Rangers?

[Frankie 8,552]

A splendid 4-part in-depth article from 'therabbit' which discusses the obvious problems at Rangers with regard to player contracts. Well worth a read along with your sandwich over lunch...

 

Part 1

 

"Man is born free and everywhere he is in chains”

 

Life is good if you have the abilities to become a modern professional footballer. The Bentleys, the broads, the bank accounts, the buffed up egos and the bumper contracts.

 

Such short footballing careers are nowadays followed by long forays into the media circus, property, showbusiness, modelling or literally anything that takes their whim. They have the capital to do as they please. Gone are the days when players had to accentuate their meagre pay packets with second jobs and 'retire' only to start their lives again as a member of the workforce at large. Nowadays distinctly average players can retire to a better and more comfortable life than a large percentage of the population could ever dream of.

 

From the onset of professional football, the players gracing the hallowed turf across the land quickly realised that they were being paid more than the loyal fans who came to watch as their escape from the rigours of their weekly grind. With the rise of unionism (in the workforce) players began to seek employment rights and players' associations were born. With these rights came contracts.

 

Stories of players now agreeing contracts readily with clubs without some form of barter, agent provocation or underhand tactics are tough to come by. This paucity is broken by some commendable examples including Paul Scholes, who notoriously turns up for contract talks with his dad and calmly thumbs through the pages in front of him before uttering the words, “that’ll do” and putting pen to paper or Lee Evans lookalike James Milner, representing himself with only some advice and representation from the English PFA. Perhaps the strangest story recently is that of England striker Jermaine Defoe, who ended up in a contract dispute as he was being represented by his mother who wasn’t a registered agent.

 

However, sadly the trend is much more obtuse, sometimes sinister and more money hungry than these three pro’s. Wranglings over player ownership, image rights, agent fees, relocation bonuses and sponsorship, are far more common than anything else – especially with a figure of around 90% of the UK’s professional players represented by some form of football agent. But I suppose that in these times of multi-million pound contracts, Arab sheiks, Israeli super agents and Willie McKay; that kind of contract pontificating is to be expected.

 

No one needs to be told about the recession that we find ourselves in, both individually and in this case, as a collective support and football team; but the issue of the football contract is a multi-faceted one. A football club's financial stability is largely dictated by payment to the members of staff that it has on its wage bill, as it is one of its main expenditures year on year. All football clubs are facing uncertain times financially, even some of the richest clubs in the world are feeling the pinch relative to years gone by. It is simply untenable for them to maintain payment of large contracts and bonuses to large squads of players.

 

This is the quandary that Rangers have found themselves in of late and the topic for this discourse into 'Setting The Standard'.

 

In actuality, it is a quandary that Rangers have been in for a while; too many players on the books with bloated wage packets that were never justified. It seems to run in cycles too. All too often have we seemed to have been lumbered with the contracts of a Capucho or a Lovenkrands or a Burke. As soon as we manage to trim one squad down, it is again swollen with players that do not deserve the wage packets they are on. Yes, getting players via the Bosman ruling is going to mean they are on slightly better wages than they would usually be, but the players we have signed using this method have not been of the required standard – perhaps with the exceptions of Boumsong and Prso. Does this lay the blame at the door of the manager, Martin Bain or is it the scouting system (or lack thereof)?

 

The situation regarding contracts in contemporary football is an interesting one. The playing field was changed for good when the European Court of Justice ruled in the favour of the then unknown Belgian player Jean-Marc Bosman and another sweeping change seems imminent as the case of Article 17 of FIFA’s transfer regulations (‘Webster Rule’) filters into the transfer system. The Bosman ruling means that players over 23 can move freely between employers once their contract runs its course and the Webster ruling means that players who sign contracts when aged under 28 are able to unilaterally break those contracts after three years. If the player is 28 or over, he can break his contract after two years. Compensation is payable, but crucially, a player's destiny lies in his own hands. Still with me?

 

With that in mind, a key point of note is that the balance of power in terms of football contract negotiation has shifted in the favour of the player and not the club. Players now have the same rights as employees in every other sphere. Something that is not lost on Sepp Blatter at FIFA, who is still battling to convince the EU that football is an ‘exceptional’ industry in which ordinary labour laws should not apply. Nevertheless, the best employees (footballers) have full control over their own career and can move to whichever club offers them the best wage and they can demand a pay packet that they feel is befitting of their talent. This has several implications for football contracts.

 

[CONTINUED]

Edited February 10, 2009 by Frankie

[Frankie 8,552]

Part 2

 

Clubs are thus forced to sign players on longer contracts than they have previously in order to protect the investments that they have. A five year contract now, is the same as a 2/3 year deal some ten years ago. Clubs rarely think that a five year deal will run till its expiry. For example, a couple of seasons ago, when Charlie Adam and Allan McGregor first came to the fore at the club, they were instantly tied down to long lasting deals. This protects the clubs investment in them meaning that should a club wish to buy them, they have to consider the fact that they need to pay out for a player that is tied into a long term deal.

 

This is the only way that a club can combat ‘player power’ in the transfer market. However, this is where the problems we are currently faced with arise.

 

As the transfer window was creaking shut with a whimper across Scotland, Rangers were desperately clamouring for some transfers – but just in a completely different way than usual. We simply couldn’t give away our players. In the end we managed to get Charlie Adam, Jean Claude Darcheville, Chris Burke and Alan Gow off the wage bill. Whether this is/was enough to ease the mounting financial burden that was much lamented throughout the month of January remains to be seen, but what we can say is that we never got the Ã?£3 million that was much touted (desirable, not imperative, remember?).

 

One of the main issues seems to be that there was a severe lack of motivation from some of the players to leave. High earner Brahim Hemdani being the perfect example. Hemdani was scarcely used last season, instead being kept as a European secret weapon. But with there being no Europe this season (and injury to be fair), he has faded into insignificance. Only recently has he obtained an agent to try to find another club and was allegedly looking for a full pay off of his contract and the ability to leave for free to go now. Instead of us being able to offload a good midfielder (Supporters Player of the Year 2006/07) with bags of European experience for a fee, we have to pay up or see him rot, quite possibly from within a cafe with fellow African Francophile Bobo Balde, each laughing at either side of the Old Firm. This trend of us having to pay players to leave is a little more prevalent than some may think, as we had to pay Burke to leave for Cardiff also.

 

It doesn’t take a financial analyst or someone voiced in contract law (I don’t claim to be either) to tell you that this is not good for Rangers. We need to be selling our players. Not paying them for doing us the courtesy of leaving. Birmingham also wanted to take Burke, and had reportedly agreed a fee in the region of Ã?£150,000 for him, but it fell through. Why the disparity? How did we go from potentially receiving a decent fee for a player in the last year of his contract, to having to give him money to move to another club in the English Championship? A league which is widely expected to be named the third richest in the world soon if some reports are to be believed!

 

Now I am not one for pointing to the other side of the city on a regular basis as a point of comparison, but in this case, the questions really need to be asked. Evander Sno left Celtic for Ã?£1.25 million – is he a better player than Hemdani? Craig Beattie for Ã?£1.25 million compared to Daniel Cousin for Ã?£1.5 million? David Marshall for Ã?£1 million whilst Roy Carroll can leave for free? Now this is not me saying that Celtic are flawless in their transfer policy - we are lucky that they have been so inept in some of their buying of late - but it does seem to be a trend that they seem to get more money for the players when they move on. Who’s fault is that? Are we (Bain) at fault for not negotiating better? Are the players at fault for digging their heels in and not being willing to move?

 

There is no doubt though that Burke and Hemdani are/were on wages that do not reflect their squad status or contribution to the team. Lovenkrands is another fine example, he was a 6 month player. Always ready to step up his game when it became time to negotiate a new deal, just like Burke. Were management being fooled all too easily? We as supporters could see it happening, why couldn’t they?

 

[CONTINUED]

[Frankie 8,552]

Part 3

 

A cursory look at the club accounts by forum member Bluedell, when the figures were released in September 2008, intimated some worrying factors relating to contracts and wages. Firstly and most importantly, within the last year, wages and salaries increased by 60%. Put in monetary terms, staff costs went up from Ã?£24 million to Ã?£34 million – an increase of Ã?£10 million. A year. To put that into context, Murray Park cost Ã?£14 million to build and we are still discussing the merits of its cash investment.

 

It’s also apparent that one of the most interesting contractual issues that Rangers have faced recently is, paradoxically, the run in Europe last year. Yes we made money from ticket sales for Ibrox, but such a run was probably never accounted for when players were negotiating bonuses in their contracts. Allegedly, in total, Ã?£7 million were/are to be paid to the players due to their run. That’s nothing to be sniffed at – it’s more than we paid for Pedro Mendes and Steve Davis! It’s unlikely that we will be paying out that kind of level of bonus in the foreseeable future. Was this bad management? Bad contract negotiation? Were these levels of bonus placed into the contracts just to make them appear beefier to the players that were signing them?

 

So to be clear, where has this left us as a club?

 

We have an squad creaking at the seams, filled with players on relatively high wages and longer contracts than we would like them to be on. Players that were once shining lights, such as Adam and Burke, were given long, bumper contracts too early and have failed to live up to their hype. These contracts have a level of bonus that we cannot sustain and whenever we do wish to sell the players on it usually leaves them having to accept a drop in the wage they currently receive, hence their reluctance to go.

 

What can be done? How could the club move forward? Any solution(s) would surely have to be all about internal club policy and willingness to stick to it.

 

Now it would be churlish of me to sit here and write down what Murray and Bain must do. I’m a research student that has about as much experience in the world of professional football as Andy Webster has in a Rangers back line. What I aim to do here in to perhaps scrape the surface at some ideas that could bear fruit. The feasibility of such I’m sure are open to condemnation, but they may well be worthy of some debate, something that is the crux of the 'Setting The Standard' series of articles.

 

Ideally, we need to choose a number of players for a squad and stick to it. Walter has been quoted recently saying that he wants the first team squad to be trimmed to around 20, with other spots being used by youth players. It is an old clich�© now that it is best to have two players fighting for every position, but it is one that should ring true. After all, that would only give a first team squad of 22 players. The drop in wage bill from a squad of 28 to one of 22 would be considerable and seems to be a goal of the current management team. Of that 22, there is nothing to stop some of the competition for places coming from hungry youth team players. With many of our young kids out on loan at present (Gow and Adam excluded) gaining first team exposure, it is perfectly feasible that they could come back ready to push for a first team berth. Just ask Allan McGregor about taking that route.

 

Ironically, one of the first things that I would suggest was in fact partially implemented or discussed just a matter of a couple of years ago by the chairman: a carefully structured and rigorously adhered to wage policy. When we missed out on Scott Brown in 2007, David Murray was quick to weigh in with the ‘excuse’ that he couldn’t break the ceiling on an existing set of guidelines (be them formal or informal within the club) for players that are either signed or come up through the ranks. At the time of the transfer it was indicated that signing Brown, who is apparently on somewhere near Ã?£25,000 a week at Celtic, would have shattered this new system.

 

It is believed that the maximum wage that any Rangers player can be awarded with is Ã?£16,000 including bonuses. This structure extends to all of the “Scots boys” within the squad who can expect to earn Ã?£1/2,000 a week when they first break into the team, Ã?£5/6,000 if they become regulars and if they become assets they can achieve Ã?£10/12,000 without bonuses. This might explain the high wages of Burke et al as they would have once been thought of as highly saleable assets, so their values needed protecting in long, full contracts. This is all very good in theory, but is it adhered to? Do we have too many ‘assets’ that are clogging up the wage bill?

 

The important point to take from this is that this structure was intimated by Murray to supporters at an AGM in 2007. If the structure was there, why was it not adhered to? Why do we find ourselves needing to sell to make ends meet if the structure has been pre-planned for two years at least? Is it purely chance that the worldwide financial recession was met with a run in Europe that bled the club’s finance? Did the management maybe take too many risks that are coming back to haunt them now? Could they have predicted the financial down turn, and at the same time, surely no one at the club could have expected to have to pay overly inflated bonuses for getting to a European cup final?

 

[CONTINUED]

[Frankie 8,552]

Part 4

 

Another valid point that needs addressing is that in terms of Glasgow Rangers, the financial downturn did not happen last year. It happened as Alex McLeish took over. That is when we started to downsize our operations. With correct leadership and business models we should have been one step ahead and more than capable of weathering the financial storm. In Italy, Juventus are the most financially sound club at present. Something which is purely based on the fact that they needed to weather their financial storm as they blew through the Calciopoli scandal and therefore had to put models in place to mitigate this. Yet we are not, somehow. Why not communicate with some of the clubs that have came through the other side of some tough financial hardship and see what they enforced to get themselves back on track?

 

Yet I digress once more. Fundamentally, we need to reassess the wage structure of the club and strictly enforce it. Surely it should be relative to turnover? Coincidentally, it has been proposed by Karl-Heinz Rummenigge at Bayern Munich that this is the way to sort out the disparity of wealth that is present in modern football. Something like that would be difficult to enforce on a club level as budgets and finances can change so quickly. Who would know if Manchester City would come in and whisk John Fleck to Eastlands for �£50 million on a whim one year. However, the notion of salary capping is an interesting one and one which could make the SPL a better and more competitive environment. But that is another article for another day.

 

In my opinion, one of the key notions is that player performance statistics should be more closely scrutinised when they are discussing contract situations. ProZone statistics and technologies like that could (should) be fundamental to negotiation of a contract for a player. If, for example, a striker is pushing for a new deal and during negotiations it becomes apparent that his shots on target to off target ratio is decidedly poor, then does he have the right to be arguing for a raise in his salary? It’s like a joiner getting paid more for hitting nails less often. Furthermore, these kind of statistics could be used for bonuses and financial incentives within the season instead of traditional win bonus, goal bonus and clean sheet bonus. How then does the hard working defensive midfielder get awarded for his diligent tackling and ball retention? It may change the motivation of players if their basic salary was kept lower and they had a series of targets to meet to maintain the wage they were accustomed too. The technology is there to be used, why not set the standard in the way we pay our players?

 

Another possibility is to further encourage and nurture our youth. Why not make it club policy to not sell anyone under the age of 21, and ensure that they all receive at least one full season of formative learning on loan at another SPL club or further afield? This is the kind of financial strategy that should be explored in conjuction with the youth models discussed in previous 'Setting the Standard' debates.

 

It is also my personal view that each and every youth player should have two things inserted into their contracts when they sign professionally.

 

* A minimum fee release clause.

 

* A future fee sell on percentage clause.

 

We need to protect our investment in these youngsters and one way of doing so could be to scale the percentage based on the players regarded potential (5%, 10%, 25%). Also, do as the Spanish do, have a value in the contract of the player that is much more than could be aspired to just so as to use it as a bargaining tool.

 

It is my thoughts that if young talent knows there is a wage structure in place that rewards them for loyalty, ability and statistical improvement, then they are much more likely to want to stay loyal in years to come. This would also act as a stimulus for young talent to come to Glasgow from across the continent and further afield. This is another string that is sadly lacking at present from our bow, a continent wide scouting network (a topic to be considered soon).

 

With our youth investment protected, it might be a viable solution to also look to Arsene Wengers’ ideologies of only offering one year deals to players over the age of 30. Adherence to this kind of strategy would ensure that we are not left in a Brahim Hemdani style situation with a player simply burning our money or holding us to ransom for a cash payout to leave.

 

Nevertheless, one thing that can be said 100% for definite is that the way things are at the minute is not working. Sadly, in my opinion, the best way to address the situation was already implemented two years ago and has failed. Where does the blame lie? The manager pushing for more players? The supporters demanding reinforcements when the deadwood was still there? Or the decision-making hierarchy of the club - Bain and Murray?

 

The wage structure can be fixed. However it will need to be done slowly. We can’t afford a mass clear out of players as we cannot recruit ones to replace them. Never mind the points made earlier that we cannot sell our players or afford to pay them off. Perhaps the clearout began in January because Walter knows that he has a crop of youngsters that can add some depth to the squad already in place? Can the youth be the future? Or will it have to be?

 

The sphere of football contracts is one that will continue to evolve in the next 10 years. FIFA are motivated to bring us the ‘6 plus 5 rule’, the EU are determined to prevent it, the implications of the Webster case are yet to have been properly felt and I have the impression that the role of agents and third party player ownership will be of increasing importance. The important thing for a club like Rangers is to be in a sound financial state whereby they can be reactionary and pliable with future changes in both legislation and current trends.

 

The ship at Rangers might not be rudderless after all. It might just need its course realigned.

 

[maineflyer 0]

Part 4

The ship at Rangers might not be rudderless after all. It might just need its course realigned.

 

I'd have thought those four pages provided ample evidence of just how rudderless our particular wee boat has been. At least I think they did.

[Frankie 8,552]

Of course it is rudderless but I think the conclusion is that it need not be a permanent problem but one that can be fixed under this regime or under a new one.

 

As is the case with all these articles, it is a given that the club is under-performing. However, we need to examine why and offer solutions for change. Similarly, the club needs to be willing to accept such constructive criticism and act upon it.

[Frankie 8,552]

The point about our player pool and associated contracts is a very important one. Of course Rangers, like every club, are subject to chaos theory when it comes to signing players. Success is guaranteed with signings and player careers can turnaround on a very quick basis (good to bad and vice versa).

 

As such, it's vital that we utilise contract negotiations throughout a player's RFC career to maximise what we get out of it. Players want security and want bonuses so as therabbitt suggests, we work to those guidelines but weigh it in our favour.

 

As AMMS suggested last week, this is particularly important with our younger players but can also be applied to older signings. Why shouldn't we write stuff into contracts to take into account ongoing status so both the player and the club can re-examine their position and nullify their contract? Why shouldn't we have clauses to protect us from unwelcome bids and/or to maximise income should a key player inevitably leave?

 

It will of course be argued that the player does hold the aces in many ways - especially in the high end of the transfer market. Thus, IMO, all the more reason to be more creative in our scouting, signing policies and contract negotiations.

 

One thing is for sure, the status quo is untenable and despite the bizarre public statements of the chairman over the last month, we need to take responsibility for the mistakes and ensure they don't happen again. That Must be done via a long term plan - not short fixes which leave us worse off time after time.

[Gribz 846]

Thats a long read, will look forward to that tomorro morning with my coffee at work.