Football wages are an eternal source of fascination and disgust in equal measure. I have no idea why they are always quoted as a weekly wage rather than per year, as is the case with almost every other profession. But aside from that anomaly, last Sunday it was interesting to compare the lead story of the sports sections of the Sunday Times and the Observer. Depending which you read, you would come away with very different impressions of football salaries. Here’s the <b>Sunday Times</b>:<br />
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<a href=”http://www.timesonline.co.uk/tol/sport/football/premiership/chelsea/article1496727.ece”>Terry demands �60m deal</a><br />
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<i>JOHN TERRY�S contract negotiations with Chelsea have broken down over the England captain�s demand to be the best-paid player at the club for the next nine years. At current rates, the deal would be worth a minimum of �58.2m, making it the richest in British sporting history, but with new signings at the world�s biggest-spending club it would inevitably rise.</i><br />
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The “limitless parity” clause would guarantee that Terry was the highest-paid player at the club until beyond his 35th birthday. While Chelsea were prepared to increase his wages to the club�s current ceiling of �121,000 a week, which is paid to Michael Ballack and Andriy Shevchenko, they could not accept the liability of promising the defender equivalence with the club�s best-remunerated player for the best part of the next decade. <br />
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Any way you cut it, there’s a big deal going down. If Chelsea’s offer of �30m+ over 5 years is too small, Terry may well walk, but this is the reality of the sums involved. Lest we forget, Beckham is getting up to �25m a year with bonus, and about �5m of that is salary. <br />
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And then I picked up another Sunday paper. In the <b>Observer</b>, it’s a different story:<br />
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<a href=”http://football.guardian.co.uk/News_Story/0,,2031162,00.html”>Premiership’s top clubs set �100,000 limit on wages</a><br />
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Frank Lampard and Cristiano Ronaldo have ‘no chance’ of receiving the massive pay increases they are demanding from Chelsea and Manchester United. That is what they will be told this week by the chief executives of their clubs… the decisions signal a sea change in attitudes to players’ wages, which, in some cases, have spiralled to more than �100,000 a week.</i><br />
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What is really going on? Football wages have exceeded inflation for years, and it’s not due to the usual factors that you would expect in an industry. There is no lack of people able to do the jobs. There is an increase in labour liquidity, given the Bosman ruling and the EU transfer laws. Plus, players are more willing than ever to work abroad. These factors should if anything, depress wages or keep them in line with inflation.<br />
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But, as the <a href=”http://sport.independent.co.uk/football/news/article357006.ece”>Premiership wage study in the Independent</a> shows, this is not the case.<br />
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Wages are up 65% from 2000. There is also an interesting disparity between what forwards earn and other positions, with defenders on �653k to the forwards on �806k. John Terry’s demands seem even more outrageous given his defender peers get on average nearly 20% less than their striker counterparts.<br />
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But these sportsmen are not being incentivised correctly. What other group of high earners gets similar coverage? Finance professionals in the City. And how do they get paid? With low salaries and huge bonuses. Bonuses are measured in performance – great in a bull market like the one of the last few years, but measurable all the same.<br />
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Why football should follow suit. Players should have their salaries cut to a basic level, and then big bonuses for performance and results. There is no shortage of stats from Opta on how players perform, which could allow outstanding players in poor teams benefit. And win bonuses could easily be used, with levels going up for league position and rounds-progressed in tournaments. Win bonuses exist now, it’s just that they are paltry compared to salary.<br />
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The current structure encourages players to play well only when their contract is up for renewal. Once signed, they can cruise, knowing that getting dropped is the only big damage that they can suffer to their reputation – and many club’s rotation policy negates that effect anyway.<br />
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So are they going to be salary capped? In reality, no. The problem is that it’s too late. Any club that tries to impose a new wage structure could easily see their players walk out or get bought out. It would only work if all clubs were to impose it uniformly – unlikely given the current situation. Changing wage structures in any industry is hard enough, but in football, where the structures to impose industry-wide changes are even weaker than usual, it would be nigh-on impossible.