Helpful suggestion: The performance based contract TSS March 2, 2011 Leeds United 20 Comments After hearing Ken Bates’ complaints that players were stalling contracts because they see a pay increase coming if we’re promoted, I thought it may be worth offering a suggestions to Mr. Chairman that could be mutually beneficial for both parties. Thanks to some random company called Qinetiq for this definition of a performance based contract – something that has clearly passed the management and owners of Leeds United by; The idea behind Performance Based Contracting (PBC) is simple; incentivise behaviour by tying contract payment to contract performance. I’ll break that down into more palatable English for the slower-than-average people dealing with Leeds United’s contract negotiations. Incentivise - This means to provide people with a good reason for doing something. Y’know, like… get promoted? The Bait – Now we have our motivational tool, we need a structured way to reward, or indeed, punish individuals for meeting or failing our (the club’s) objectives. Luckily, footballers are pretty simple folk who perform best when a new Lincoln Navigator is within touching distance. It’s the thing that helps the world turn – money. The Reward – A promoted Leeds United means our income will grow rapidly. This means we will be able to reward our players with the funds to buy the afore mentioned Lincoln Navigator by increasing their salary. This is where contract performance (achieving promotion) and contract payment get particularly interesting. All this requires is a simple clause in the contract that states Leeds United Player A is paid X amount of money in the Championship and Y amount of money in the Premiership. (The X amount being smaller than the Y – Unless you’d rather be in the Championship that is) Safety First – Now the brilliance of a performance based contract is the safety net it provides. Should said player fail to achieve his goals, then his salary doesn’t improve. This may leave the player a little upset as he won’t have enough to buy a Lincoln Navigator AND blow thousands on cocaine and whores. What do you care though? You have them tied down for another four years. If they want to leave, someone better be getting the chequebook out! You’d think a self-proclaimed master of finance like Ken Bates would be able to get his head around such a simple idea, but the old age is clearly creeping in so we’re more than happy to help explain things further if needs be. What really seems to be escaping our chairman is how much a players long-term future can affect their performance. When there is so much doubt and speculation surrounding an individual, performances often slip. If the doubt and speculation was replaced by security and incentive, I have no doubts whatsoever that we’d see a marked increase in performances from certain individuals over the coming weeks. pabs1983 it would have made sense to have signed stewart to this deal until the end of the season. If only to shore up the midfield pay-per-play contracts should be the norm for all players. Leeds fan Brillant idea Matt BB i think they have heard of them yes, but they are also familiar with the principle of hoping that they can make players stick to a lower wage if they pressurise them enough and make them terrified that a championship contract is better than no contract at all. The other side of the coin is of course that because – so many players want to play for leeds – no please calm down Cristiano, Lionel – you’ll both get your chance (as if) that someone else will be along soon aenough – so no loss there.. in reality we of course know we just lose players that we want to keep, and alienate those that sign up. I cant imagine Snoddy has signed such a deal, where he gets a championship wage if we get promoted, i think its more likely – in all seriousness that we only offer these deals to players who we want to keep long term. Chris from Wakey Mr Bates is selective with his comments. Most of the clubs around us with a serious chance of promotion have taken good quality players on a loan basis to the end of the season. Presumably if these clubs don’t go up, and obviously only three can get promoted, then the loan players go back to their parent clubs. The clubs that do up will then, also presumably, have the chance to buy the players that have helped them achieve promotion. In other words a short term speculation on higher wages for a short period gives the clubs a better chance of winning promotion and the big wad of dosh that comes by doing so. It’s not a breaking the bank exercise because a fair amount of the extra costs would be offset by the improved gates that a winning club fighting hard for promotion brings with it anyway. Likewise there is a strong case for retaining the existing players who could maybe perform in the premiership on longer contracts. If we did go up we don’t have to start shelling out lots of money for new players from day one, and if we decide not to keep those players their sale generates income because of their contracts as opposed to a Jermaine Beckford situation where we lose out on a free transfer. It’s obvious that Leeds United are short of, at least, two or three players in midfield and defence who could stop us gifting goals to the opposition. I don’t claim to be a football expert but if we’d have won only half of the draws we’ve had this season we would have been in strong contention for automatic promotion by now. I am not questioning Mr Bates’ business acumen – he’s got more money than me I’d guess and he’s clearly nobodies fool – but if you looking at LUFC on a making money basis then the club will almost certainly be more profitable in the championship next season rather than going up to the Premiership. Whether these season ticket prices and gates are sustainable for a third season is another matter for another day but my view is that we’ll only go up if Simon Grayson gets lucky on the pitch and not as a deliberate attempt by the club as a whole to win promotion this time. trueyorxman Wouldn’t it also make sense for Leeds to try sign players in on loan who we maybe able to sign permanently during the summer (if they happen to fit in). There’s no chance of players young players like Johnson, Bannon, & Mutch signing for us long term, so we are just doing their clubs a favour gettin or keeping them fit. Keith Whilst it’s a brilliant idea and one which I wholeheartedly agree should be implemented, the problem with any contract is that (as we have seen so often) it can be torn up at a moments notice or, as seems to increasingly happen, be challenged in one of the many random European courts of sport & arbitration. TSS Shouldn’t have any problem in the European court as these kind of contracts are commonplace in other areas of work. It’s only working law regulations where football has had issues. All White on the Night Just to play Devils Advocate for a moment. Perhaps Ken & Shaun are already well aware of this type of contract. And when players and their agents take a look at all the strings attached they decide Leeds ain’t the club for them. Just a thought. TSS That’s the thing though isn’t it. Both the players and Bates say they want to sign, but Bates says they’re scared to miss a bigger pay-day if we’re promoted. This contract accounts for both scenarios and weeds out those that are leaving regardless to those who actually want to be at Elland Road. trueyorxman Come on then people lets have some names, who do you want to see arriving? Here’s 2 for starters: Darren Ambrose from Palace & a certain Lee Bowyer EYLEEDS I’m guessing that the ‘y contract’ Bates is willing to offer ain’t all that impressive when compared to other premiership teams because a good portion of Leeds’ revenue is still being syphoned off to our mystery owners and other off-field investments. We are being run in a very prudent business model and other teams such as Leicester and QPR have speculated and probably have a significant deficit this season. I’d settle for something in between the two, and do our consolidation few years in the Prem not the championship. The Reaper 08 A lot of football contracts have bonuses or clauses based on performace, be that by game basis or for play-offs, promotion, goals, cups etc. At the opposite end the same applies for relegation. My last Saturday contract had performance clauses in, nothing new. That is not the issue, the issue is starting salary. You will never get a modern day footballer on £10k a week to sign for £8k or £10k with the the promotion clause that if we go up he can have £14k. A player on £10k now will want £14k to change clubs AND performance clauses and that is where the club currently refuses to speculate. Not saying the club are right or wrong just gracing the rumour and speculation with some fact. To be honest TSS for someone who professes to have been in/around football I would have thought you would have known that. Still any excuse eh…. Colin TSS – No matter how good an idea it is, I hate to piss on the bonfire, but it can’t work. You can give a player a bonus (eg. for promotion) but you can’t give him 2 rates of pay – one if promoted and another if not promoted. Why? Because, you can only give a player a single contract at a time. The scenario above, means you’re giving a player 2 contracts and they’re committed to both. I’m pretty sure this is illegal. Either way, an agent would never allow their client to sign up to it. An example, you’re Bates and I’m Snodgrass. You offer me a CCC contract at £5,000 a week. But tell me that I’ll be on £25,000 a week in the PL. Great. Problem is, you either have to prove that you already have the cash in the bank to pay me £25,000 a week right now (and remember you’re Bates, and you don’t have that cash) or the deal can’t be made. You can’t guarantee that you will get the funds to pay me, unless you get a guarantee from the PL/Sky/LUFC/Forward Sports Fund (our owners) that they will pay you what you need to pay me £25,000 a week. In addition it potentially flies in the face of the Equal Opportunities Act if you offer similar people different contract. For example, if you offer Snodgrass the offer I describe, and Bradley Johnson gets nothing and is released at the end of the season, when you get promoted, then Johnson would have a case for unfair descrimination due to Snodgrass not being solely responsible for promotion. Johnson would have a valid legal case that he was also responsible for promotion and therefore is entitled to a similar financial settlement or that Snodgrass is not entitled to his improved deal because he was not solely responsible for promotion and therefore his new improved contract is invalid. And that’s just the start. It can’t work on so many levels. If Snodgrass gets promoted and gets his £25,000 a week contract, then where is the motivation then? He can sit on his arse and claim £25,000 a week for the next 2-3 years, leave on a free, join another club and Leeds can do nothing about it. Never going to happen. The Reaper 08 Colin, many elements of what TSS is saying are already in contracts, it can work and it does work. All different players have different types of contract & clauses, it’s actually very very common. When you sign a player for £50k a week you don’t have to prove you can pay it and you don’t with PRP, it’s in the contract. The club has to pay it or go bust or get sued. Football is very very different to normal work life. Colin Reaper, I’m pretty sure you can’t do the £5,000 and £25,000 example I described? Either way, Leeds wouldn’t do it. It’s financial suicide. £25,000 in the PL is okay, but if you relegated, Snodgrass is still on £25,000 and Leeds have to pay it. We’ve been down this route before me thinks The Reaper 08 In my opinion you are bang on about the financial suicide bit and I share the same opinion as you about the negatives on how this works. You can have a promotion related contract that triggers an increase in your salary if you are promoted. You can also have relegation clauses for if you go down. Colin Whether some people like it or not, Bates will not be held to ransom over finances and he has a plan and he’s sticking to it. Is it good or bad, that’s debateable, but it seems to be based fundamentally on keeping Leeds’ operating profit in the black. Plymouth Argyle – in the 3rd division, in the bottom of the league and in the shit, pay wages of £8.5m a year. Aston Villa, 12th in the Premier League pay an eye-watering £80m in wages a year. Bates has a team budget, and that’s what Grayson gets. He’s improving facilities in the East Stand, all while keeping the club in the black. Mark my words, it’s frustrating that we don’t splash the cash. But some big names in English football are going to go tits up. And Leeds won’t be one of them. Plymouth were regarded by the FA as worthy of a 45,000 seater stadium and a place on the England 2018 WC bid (Ha Ha!). Aston Villa can’t keep paying £80m a year on wages. Even Arsenal have posted a loss. It’s a house of cards out there and the FA and PL are shitting their pants. Just as well there’s a team that’s got it’s finances under control that can take advantage of that. Surely the FA and PL would be happy with Leeds taking advantage of that. Wouldn’t they? Colin Plymouth have nothing to worry about. They’ve got that football finance guru in, Ridsdale…. Administration it is then. tim campbell A Mr Ridsdale – Mr Chairman is most definitely not!!! lol All white on the night. Has anyone ever seen a players contract? I would love to actually bore myself to tears reading one through but somehow they seem sacrosanct. You would think the red top media would indulge us all with the finer details but they seem more concerned with who shagged who’s ex missus than to open our eyes as to the finer details of our lavishly paid idols. The best we get are a few “it is believed that…” is on £xxxM per week! My belief is that the lazy hacks are in the pockets of the agents and if they dare to start telling us some hard facts then their tittle-tattle “a source close to…” stories would dry up like an ‘owd nuns chuff. My point is we don’t have a clue what terms players are on or being offered and it suits all concerned to keep it that way. That said I would be surprised if players agents and clubs for that matter don’t already see the virtue of hammering out some performance based additions to their players contracts. Indeed, some close sources were once quoted as believing it to be so.