Football: Chelsea in Turmoil: How much is a manager worth?

Ruud Gullit's wage demands are not simply greed. City analysts say the whole business of football needs to change. Nick Harris reports

CONTRARY to his protests, Ruud Gullit's departure from Stamford Bridge had everything to do with money, City experts said yesterday. The consensus, however, was not that the Dutchman himself was at fault for requesting pounds 2m a year, but that the wage system as a whole needs restructuring.

Nick Batram, a City sport and leisure analyst, said that clubs were only just starting to realise that the wage spiral cannot be sustained. "Clubs are saying `We're not going to have a gun to our heads,'" he said. He added that salaries have expanded too fast, and that in business terms, they are unsustainable.

The issue of managers' wages, however, is clouded by the fact that they are generally lower than those of the highest paid players at each club, despite the fact that ultimate responsibly for success lies with the manager, and the manager is arguably more valuable for his team-building skills than any individual player is for his ability on the pitch. The loss of a player as influential as Roy Keane at Manchester United has not halted the champions' progress, but the loss of Alex Ferguson, the manager, would not easily be overcome.

The highest paid manager in England is Newcastle's Kenny Dalglish, believed to earn pounds 1m a year, while Ferguson is thought to earn pounds 750,000 at United. At the top end of the British players' salary levels, Paul Gascoigne is estimated to earn pounds 2m each year at Rangers.

Nick Batram said football is less a part of the business world and more an entertainment industry. As such, its big names are valuable as assets in themselves. "The producer of a motion picture is not going to earn as much as the main star," said Batram. That is one reason, he added, that players command higher wages than managers. Players also have fewer earning years and higher chances of career curtailment.

Managers, said Batram, should be paid on the basis of what they achieve (and hence a club can afford), not on the grounds of perhaps unrealistic aims. "Everything above [a basic salary] would be a performance-related bonus," he said. It would not mean that Gullit would be unable to earn pounds 2m a year, but it would be conditional on his fulfiling his potential. The Leicester City manager, Martin O'Neill, is believed to have a contract heavily weighted towards performance, although the extent of the practice throughout the game is not known.

John Barnwell, the chief executive of the League Managers' Association, feels managers should be aware that every club has its wage limit. "It would appear that Gullit's demands stretched Chelsea too far, and that's why they have taken the step that they have. That's their decision, but it's a warning to people that it's not a bottomless pit."

However, Barnwell is supportive of managers being paid what they are worth. "They help put the team together, and without them the product might not be as good as it is."

Alex Fynn, the sports industry consultant who wrote the commercial blueprint for the Premiership league, said that although pounds 2m is an excessive basic salary for a manager to demand, it is the chairmen of clubs who are ultimately to blame. "What is happening is that wages are rising faster than income and chairmen are having to find money.

"They [Premiership clubs] have mortgaged their future on the basis of success in which the players call the shots." Ultimately, he said that high wages were not a problem for anyone except the owners of the businesses. "No one minds the money they're paid - colleagues or fans. Perhaps the only people who do, balance the books at the end of the day."