This is an updated version of an article first published in 2022
Nine months ago, Liverpool paid £60million for midfielder Dominik Szoboszlai from RB Leipzig, a key part of the succession plan to revitalise their ageing midfield.
It reflects one of football’s curiosities that they offered less than seven times that sum in an attempt to replace the most important figure in the club’s recent history.
Today (Wednesday), The Athletic reported that Liverpool have begun negotiations with Feyenoord for manager Arne Slot to take over from Jurgen Klopp. The 2022-23 Eredivisie champions knocked back an opening offer of €9million (£7.7m, $9.6m).
It remains to be seen what any final figure will be if Liverpool get their man, but the disparity is not unique to this deal.
In 2022, Chelsea paid Brighton & Hove Albion £55million ($63.6m) for their left-back Marc Cucurella. The following month, they paid the same club less than half that (£22million) for their manager Graham Potter, the man charged with leading a bright new age at Stamford Bridge under the Todd Boehly-Clearlake consortium.
A few months before that, Aston Villa paid £26million for Sevilla’s Brazilian defender Diego Carlos. Villa returned to La Liga soon after to make a more significant capture — luring manager Unai Emery from Villarreal. This time, they paid the Spanish club £5.2million in compensation.
The figure Chelsea paid for Potter exceeded the £17.2m Bayern Munich paid RB Leipzig for Julian Nagelsmann when he became their head coach in 2021.
All three managers had strong reputations and enticing CVs, and faced big jobs — so why were they so much cheaper to secure than most elite players?
Why do clubs take and lose managers for much smaller fees than those commanded by the 25-or-so footballers they are entrusted with leading and improving?
The Athletic asked the experts what this all says about value for managers and players.
Although a head coach can have far more influence than a single player, it is perhaps over-simplifying things to conflate the two.
Sasha Ryazantsev is Everton’s former chief finance and commercial officer. He was also on the board of directors at Goodison until 2021 and while he believes the manager is the most important person at a club, he feels there is a “fundamental difference” between their value and that of a player.
Initially, there is the issue of reciprocity. “Clubs would love to have a release clause for a manager,” he says, “but any manager, or his agent, worth their salt would demand a reciprocal amount to be payable to him, should he be let go.
“Since it is far more likely that the club would sack the manager than him going himself, clubs prefer to keep any release clause as low as possible. Sometimes, the fee can be clearly stipulated in the contract and sometimes it has to be negotiated. If the release clause is subject to negotiation, then a good starting point would be the manager’s termination clause.
“In cases when that is not clear, it could be the remaining value of the contract, which can be quite expensive if the manager has just signed a new one.”
Szoboszlai cost more than seven times what Liverpool have offered for Klopp’s replacement (Paul Ellis/AFP via Getty Images)
There is another fundamental difference between players and managers when it comes to registration rights with UEFA. Clubs can only field players registered to them by European football’s governing body, whereas the manager’s registration rights do not exist.
That means that, unlike managers, players cannot be sacked before the end of their contracts, nor can they walk away from one because they would be unable to play for another club without registration.
It is these registration rights that transfer fees actually pay for.
Then there is the matter of the differences in resale value. “For the buying club, it is difficult to justify paying a significant ‘transfer fee’ for a manager,” says Ryazantsev. “If a player proves to be a flop, he can often be sold at least at a residual value.
“With the manager, the fee you are paying is likely never to be reimbursed by another club, as again, you are more likely to sack the manager than the manager being poached by another club in the future.”
The traditional structure of buying and selling players, via transfer windows, is another key issue affecting different values.
“With players, the selling club typically has quite a bit of time to put them in the shop window and prepare a deal for the transfer window,” adds Ryazantsev. “Then they can try to play two or more buying clubs off each other in a ‘competitive auction’.
“With the managers, there is no such thing. Once he wants to leave and has an offer from a buying club, it’s often during the height of the season and the club would rather take any money quickly than have a manager on their hands not focusing fully on the job.”
Ryazantsev also outlines some advantages in manager value versus players for clubs trying to shift highly paid and underperforming stars.
“Player transfer value drops over time and trends to zero — it can even be below zero for those on high wages still in contract and unwanted by current clubs — think of all those loan deals when the old club continues to pay some of the player’s wages. That’s essentially a negative ‘transfer fee’.
“On the contrary, the manager’s value can go up or down and does not depend on his age.”
When it comes to the crunch, some clubs can refuse to entertain a player’s interest in leaving until, and if, it suits them. They are ordered to get their heads down — to focus on training and playing.
But when a manager publicly acknowledges his interest in going elsewhere, it is different.
“At that stage, the trust can be broken,” explains Tim Keech, co-founder of MRKT Insights, which provides football consultancy to professional clubs in England and further afield.
“It’s much harder for clubs to say no when the manager has said, ‘I want to speak to this club’. From owner to sporting director to manager, they often have a very intense relationship. The bond of trust is impacted.
“Even then, if the club taking their manager quibbles over any compensation demand, it usually just goes down to negotiation.
“But with a player, it’s different. Say a club asks for £50million for someone. They may think it would cost them £30million to replace the player, and then there’s a £20million premium on top of that for losing that player.”
Not every transfer happens and Keech feels the damage done by an unsettled manager can be worse than a solitary disgruntled player.
“The average time a manager stays at a club is 15 months,” he says. “To demand higher fees for their managers, clubs would have to give them longer contracts and that brings more risk for what still wouldn’t reach the money you’d get for a top player.”
Salaries for modern-day managers do not lag behind players — although few earn significantly more. Keech says that in the Premier League, managers tend to have the equivalent wages of the squad’s highest earner.
“Managers earn good money,” he adds. “Maybe not as relatively high as senior people in other sectors. The head person at Google will usually earn far more than most employees — but managers do have that extra flexibility when bigger clubs come calling.
“There is an understanding generally in football that you should not really stand in the way of opportunity.”
Although resistant to the idea of losing Potter, Brighton eventually accepted his departure — in a sense, this is part of football’s food chain — while holding out for a high compensation figure.
Individual sponsorship deals for players can also add value to clubs, but that level of profile is rare among managers.
“Barcelona lost €70million in one sponsorship deal when Lionel Messi left,” says Dr Matthew Hindmarsh, a senior lecturer in sports business with media at Liverpool John Moores University.
“Top players have their own endorsements with brands and when they are at a club, it can attract more attention and other deals to their clubs. So when they are faced with selling them, they ask for higher fees to compensate for it.
“Players are also rarer commodities because they have a short career compared to a manager. A player might be in their prime for five years whereas a manager can be for 20.
“Then there’s the transfer window, which often influences how much clubs pay for players as a knee-jerk reaction. There is no window for managers.”
It might seem like a curiously large gap between player transfer fees and managerial compensation, but the absence of managers complaining about it perhaps underlines a status quo that suits everyone.
(Top photo: NESimages/Geert van Erven/DeFodi Images via Getty Images)
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