Bad Management of Football Managers is Bad Financial Management

The administrators at Portsmouth Football Club have published their report this week. It states that Portsmouth have debts in the region of £58 million. There are plenty of other football clubs who have found themselves in administration including Portsmouth’s local rivals Southampton FC, Plymouth Argyle (my team!) and most recently Glasgow Rangers. So how have these clubs got themselves into such trouble?

The cost of dismissing the manager is one contributing factor. It is often very likely that if a sacked football manager was to make a claim of unfair dismissal they would probably have very good prospects of success. This means that more often than not they will be paid off by the club.

Football managers are very well paid and are usually on contracts for a fixed term of 3 to 5 years. If the club decides to dismiss a manager after only a short period they are potentially liable to pay the manager the balance of his contract. They can argue that the manager should try and minimise his losses by finding alternative employment and there is usually horse trading between the club and the manager as to how much the settlement should be but it is the case that such a settlement can run into hundreds of thousands of pounds. It is arguable that dismissing the manager can actually be doing the club more harm financially than keeping him on.

What is also often forgotten is that when a manager is dismissed the rest of the coaching staff (who have often come with the manager) will often be dismissed as well meaning that there will be potentially more compromise agreements being handed out. This means that a club with a lot of outgoing managers will quickly find that a lot of money is leaving with them.  

Since Harry Redknapp left Portsmouth in 2008 there have been ten managers at the club and since he left Southampton in 2005 there have been eight managers. This cannot have helped the either club’s finances. There are other reasons for clubs going into administration such as players’ wages and general financial mismanagement; however, having a high turnover of managers cannot have helped both for footballing and financial reasons.