the current wage bill: salaries, sustainability and implications

[Ollessendro]

I’ve been doing a bit of thinking about the wage bill and it’s sustainability for a while now. It is a bug bear of mine and it seems appropriate to bring it up after broomhill’s post. I wrote the following last week whilst on a train, but one of the implications could be outgoing transfers (before the window) closes and hence I am bringing it up. . Most who read my posts will know that I have criticised the club for its poor financial approach and have called for a sustainable salary system. I realise that this was probably out of reach this season, but would like to see the club try to move towards a better system. Having a wage bill that is 60-70% percent of turnover is generally regarded as good practice. I’ve called for a system where we have a cap at 5k, but I realise in the short term that this is almost impossible. Some poor decisions have left us with players on big contracts, that we are unable to attract offers for.

I wanted to examine the wage bill more closely and think about its implications. Although we have moved on Yeates and Henderson, we have kept Monty, Quinn, SS , Evans and Cresswell who are all undoubtedly on big contracts. I hoped the club had learnt from its mistakes in the past, but has it. McCabe gambled on us getting back to the Prem under Robson and paid unsustainable salaries to players. This was ok whilst we had parachute payments, but proved to be our downfall when we did not get promoted. So have we learnt? Or are running an unsustainable wage bill and pinning all our hopes on going straight back to the Championship?

Rough calculations

I’ve attempted to do some calculations. Now this is (educated) guess work and I realise there is a margin for error. I could be out and am opening myself up for criticism. However I feel using estimates of minimum salary and maximum salary I think we can get a rough idea of what the club is paying on wages. This is far from exact, but I am aiming for a likely figure, I realise it could be a million or two out, but

I still think it could give us an indication of how much we are paying. See my estimates and calculations below.

Player Min salary (k) Max salary (k) Ollie’s guess-timate
SS -------10 --------- 14 -------------- 11.5
Aksalu -- 1 ------------ 3 ------------ 1.5
Long --- 1 ------------ 3 ------------ 1.5
Lowton --3.5 ------------ 6 ------------ 5
Maguire --1 ------------ 2 ------------ 1.5
Taylor -- 4 ------------ 7 ------------ 5
Ertl ---- 5 ------------ 10 ------------ 8
Lescinel --2 ------------ 5 ------------ 3
Morgan - 8 ------------ 14 ------------ 10
Collins -- 5 ------------ 10 ------------ 7
Kozluk -- 3 ------------ 5 ------------ 4
Flynn --- 4 ------------ 6 ------------ 4.5
Williamson 6 ----------- 10 ------------ 8
Montgomery 10 -------- 15 ------------ 12.5
Doyle -- 5 ------------ 8 ------------ 6.5
Quinn -- 8 ------------ 14 ------------ 11
McAllister 1.5 --------- 4 ------------ 3
Harriot -- 1 ------------ 2 ------------ 1.5
Tonne -- 1 ------------ 2 ------------ 1.5
Mendez-Liang 3.5 ----- 6 ------------ 4
McDonald 5 ----------- 10 ------------ 7.5
Cresswell 9 ------------ 14 ------------ 10
Evans -- 10 ------------ 18 ------------ 15
Bogdanovic 5 ------------ 8 ------------ 7
Porter -- 4 ------------ 7 ------------ 5

Total ------------ 107 ------------ 200 ------------ 147

Min salary 107k x 52 = 5.5m
Max salary 200k x 52 = 10.4m
Olle’s guess 147 x 52 = 7.6m

Realistically the wage bill is probably around £7-8 million per year. What does this mean?

Turnover

It is not surprising that Wilson had to go to McCabe to ask him for the extra cash for McDonald’s wages. We almost certainly have one of the highest wage bills in the division and any bids for any high earners will realistically be accepted. That is unless we are gambling on going straight back up. The wage bill is almost certainly unsustainable, (again) unless we gamble on getting promoted this season.
Does anyone have the figures for turnover for 2010/2011?

Automatic promotion?

Purely looking at the wage bill we should be going for automatic promotion. However things are rarely that simple and there are big question marks over the way that SUFC has handed out lucrative contracts to average players (allegedly). But maybe Wilson can get these players playing and if he is good at his job he should be able to take a team with one of the highest wage bills towards the top end of the table. I am reluctant to state that if Wilson does not get us promoted, then he has failed. But perhaps Swiss has a point when he says that Wilson should take us up this year: no excuses.

Offers (and transfer outgoings)

Realistically will we be able to turn down an offer for Quinn, Monty or Williamson? Half a mill of the wage bill would probably help. The high wage bill and the fact we seemed to have to ‘bust the bank’ for McDonald suggests any bid would be accepted. It might also free up a little cash for a potential short term loan signing. Perhaps Wilso has told he will get promoting with this squad (if left alone). It will be interesting to see what happens if there are any actual bids.

 

[Highbury_Blade]

Foxy can you enable <tables> so we can sort the above out so it's readable?

I think Evans is probably on 20+ as well.

 

[blade too long]

evans can be suspended from wages if hes under arrest

 

[broomhillblade]

Hopefully the Everton game will have a big crowd and SUFC will get a sizeable share of the gate money.

That may be taking the pressure off a little for now.

 

[SotonBlade]

I think it's 50% in the cup is it not??

---------- Post added at 07:12 PM ---------- Previous post was at 07:10 PM ----------

It's 45% after costs

http://www.carlingcup.premiumtv.co.uk/page/Rules - point 19.1

 

[Revolution]

I would agree that some players are being paid more than they are worth, and that we could get the same results with a cheaper squad.

It may also be correct that the wage bill is unsustainable in light of the club's income.

However, this is looking at things in a vaccuum. The wage bill is not unsustainable when McCabe's resources are taken into account, and given that he effectively is the club given his majority shareholding they should be.

Whether or not we need to sell, or are prepared to buy without selling, comes down to (a) whether McCabe has the resources and (b) whether he is prepared to use them.

 

[DuncDisorderly]

As Rev says I don't know how much value there is in this analysis other than keeping Ollie quiet for a while. How the club got to its current position is pretty well understood, and the costs of the failings can be provided for from KevMc's deep pockets, although I doubt he will be enjoying it.

I also doubt if he will be enjoying the dilemma of whether to stick or twist if a decent offer comes in for, say, Quinny on deadline day. The certainty of £1m of fee and savings on wages, or the (improved) possibility of promotion? I know how many will feel about it, but its not your million, is it?

Nope, not much to do but wait for the end of the existing contracts, imo. Sanity will take time to be restored...

 

[Revolution]

I also doubt if he will be enjoying the dilemma of whether to stick or twist if a decent offer comes in for, say, Quinny on deadline day. The certainty of £1m of fee and savings on wages, or the (improved) possibility of promotion? I know how many will feel about it, but its not your million, is it?

For me, Dunc, this is the toughest decision to make in terms of the three midfielders on high wages. A decent offer for Monty is easy to accept because of the presence of Doyle in the squad, and whilst I would like to keep Williamson he is so injury prone that it is logical to get rid if someone is daft enough to pay decent money. Quinn, however, is (a) not injured very often (b) offers more than Monty and (c) is likely to be the lowest wage earner of the three.

Certainly if offers came in for all 3 I would keep Quinn. If he is the only one who attracts interest...that's a toughie. If I were McCabe I would keep him if Wilson wanted it, but that's just me.

 

[stannyblade]

If your figures are somewhere near correct ollie. Then young Mr Maguire will be knocking on DW's door very soon along the lines of "Your paying Collins over 4 times what you pay me for the same job, pay me more or im off"

 

[Jim Chimmerney]

I also doubt if he will be enjoying the dilemma of whether to stick or twist if a decent offer comes in for, say, Quinny on deadline day. The certainty of £1m of fee and savings on wages, or the (improved) possibility of promotion? I know how many will feel about it, but its not your million, is it?

For me, Dunc, this is the toughest decision to make in terms of the three midfielders on high wages. A decent offer for Monty is easy to accept because of the presence of Doyle in the squad, and whilst I would like to keep Williamson he is so injury prone that it is logical to get rid if someone is daft enough to pay decent money. Quinn, however, is (a) not injured very often (b) offers more than Monty and (c) is likely to be the lowest wage earner of the three.

Certainly if offers came in for all 3 I would keep Quinn. If he is the only one who attracts interest...that's a toughie. If I were McCabe I would keep him if Wilson wanted it, but that's just me.

What we also don't know is who DW possibly has lined up as potential replacements. Just because they've done OK so far this season, who's to say Squinny / Monty / Willo couldn't be replaced with players better suited to DW's system and the division at half the cost ?

I still believe that a 'decent' offer for any of them would see them gone by the end of the month.

 

[stannyblade]

I also doubt if he will be enjoying the dilemma of whether to stick or twist if a decent offer comes in for, say, Quinny on deadline day. The certainty of £1m of fee and savings on wages, or the (improved) possibility of promotion? I know how many will feel about it, but its not your million, is it?

For me, Dunc, this is the toughest decision to make in terms of the three midfielders on high wages. A decent offer for Monty is easy to accept because of the presence of Doyle in the squad, and whilst I would like to keep Williamson he is so injury prone that it is logical to get rid if someone is daft enough to pay decent money. Quinn, however, is (a) not injured very often (b) offers more than Monty and (c) is likely to be the lowest wage earner of the three.

Certainly if offers came in for all 3 I would keep Quinn. If he is the only one who attracts interest...that's a toughie. If I were McCabe I would keep him if Wilson wanted it, but that's just me.

Not just you mate, I think that comment is what most of us think as well
I do like Monty BUT we can manage without him (unless he starts scoring as many as Brown did which isnt about to happen) I still think someone will come in for Monty and try and get him for next to nothing which we should take to free up the wage

---------- Post added at 08:22 AM ---------- Previous post was at 08:21 AM ----------

Well written by the way Ollie

 

[Jim Chimmerney]

If your figures are somewhere near correct ollie. Then young Mr Maguire will be knocking on DW's door very soon along the lines of "Your paying Collins over 4 times what you pay me for the same job, pay me more or im off"

And I'd say, hang on mate, Collins has been a part of a promotion winning team, played at a higher level etc etc etc and you've not played a dozen professional games yet.

 

[Selly]

I also doubt if he will be enjoying the dilemma of whether to stick or twist if a decent offer comes in for, say, Quinny on deadline day. The certainty of £1m of fee and savings on wages, or the (improved) possibility of promotion? I know how many will feel about it, but its not your million, is it?

I'm not sure an offer in August is that hard to justify accepting.

However if we are top-4 in the division in January and we get an offer...

 

[Ollessendro]

I would agree that some players are being paid more than they are worth, and that we could get the same results with a cheaper squad.

It may also be correct that the wage bill is unsustainable in light of the club's income.

However, this is looking at things in a vaccuum. The wage bill is not unsustainable when McCabe's resources are taken into account, and given that he effectively is the club given his majority shareholding they should be.

Whether or not we need to sell, or are prepared to buy without selling, comes down to (a) whether McCabe has the resources and (b) whether he is prepared to use them.

This applies to this year only Rev. Football League laws come in from next season stating that a club's wage bill must be 60% (maybe 70% - can't remember exactly) of annual turnover. So this analysis may be premature, but it is far from irrelvant. You could argue that the wage bill will look very different by next August, but just stating McCabe will bail us out does not hold water.

So my initial point comes into play again. The wage bill is (seemingly) unsustinable for staying in this division more than one season. McCabe's personal fortune is irrelevant. The point which I am trying to get across is do we gamble (i.e. keep the wage bill high and hang onto the big earners) or prepare for life in this league and employ a more sustainable approach?

As Rev says I don't know how much value there is in this analysis other than keeping Ollie quiet for a while. How the club got to its current position is pretty well understood, and the costs of the failings can be provided for from KevMc's deep pockets, although I doubt he will be enjoying it.

I also doubt if he will be enjoying the dilemma of whether to stick or twist if a decent offer comes in for, say, Quinny on deadline day. The certainty of £1m of fee and savings on wages, or the (improved) possibility of promotion? I know how many will feel about it, but its not your million, is it?

Nope, not much to do but wait for the end of the existing contracts, imo. Sanity will take time to be restored...

Actually Dunc, Rev did not say that. Still I had money on you being one of the first to poo poo this thread. McCabe's 'deep pockets' will count for little if we do not get promoted this season. The wage bill (whether it be anything from 6 to 10 million) will need to be decreased if we are in the third division next year. What I want to know is if people think McCabe is gambling on promotion (not learning from the Robson mistake) or just that his hands are tied and he is planning a more sustainable approach, but it is subject to offers, contracts ending etc.

If your figures are somewhere near correct ollie. Then young Mr Maguire will be knocking on DW's door very soon along the lines of "Your paying Collins over 4 times what you pay me for the same job, pay me more or im off"

(Jim makes a good point below). Maguire came straight from the academty team and is presumably still on a youth contact. He is 18 and played half a dozen competitive professional games. Collins is a seasoned professional (abiliy aside) that has played hundreds of games (many in a higher league). Hence I think my estimate is reasonable. Should young Harry carry on in the same form though, I would expect him to be knocking on Wilson's door asking for a better contract. I would also hope that Wilson ties him up on a long term deal.

And I'd say, hang on mate, Collins has been a part of a promotion winning team, played at a higher level etc etc etc and you've not played a dozen professional games yet.

 

[SwissBlade]

Good analysis Ollie, certainly got the debate moving for the right reasons

Simple answer is that the current wage bill is unsustainable at this level, but something worth adding is the other factor is that we HAVE to meet the Football league's salary cap next season, I believe that we have had a short term reprieve for this season and we couldn't meet the 60% of turnover threshold.

I think even with the latest accounts its very difficult to put an actual weekly wage beside the name of each player and do we even need to make such a precise guestimate? A better solution could be to categorise the wages as
Ultra High
High
Medium
Low

Critically, we also need to look beyond the weekly wage and look at contract duration, something which I think Foxy did in the summer, then we can see how sustainable it all is. These are really going to show us which players are crippling us or could cripple us next season if we don't go up, just like we found after we didn't bounce straight back to the PL.

Quite simply, we didn't plan to be in League 2, but we ended up here.

Its been said many times, but we seem unable to shift players on, but its not just us. Squads are getting smaller outside the PL top 4-6 and it seems to be proving difficult to attract offers for players unless they are a young potential superstar. I read Seth's blog on Alfie, I don't make a habit of reading his stuff, but he made a good point that PL isn't raiding the Championship, so the whole ripple effect just isn't happening, but thats another issue.

In many ways we have a perfect opportunity to bounce straight back to the Championship, on paper we have the talent and experience. But that too has to be done in a sustainable manner.

If we take a snapshot now, then sustainability isn't there, but look at the profiles of the 1st team now and it looks like we're working on it.

The club needs an overall policy for 2-3 years. We're kind of stuck with the high earners for now, until we are able to move them on, but we're not under an embargo, Wilson will have a budget. Its how this is managed

Is it right to cap wages at 5k? I don't think so, we need to run sensibly, but restrictions such as this aren't realistic. We may need a 20 goal a season striker and a left back for cover, but should we risk losing out on the striker because he wants 6k a week and the left back only wants 1k? Its about priority. Perhaps we need to look at capping in a particular way:
Spine of the team - 10k
1st Teamers - 5k
Fringe players - 3k.

This would fit in with the category above.

We also have to look at the market, what are teams at the top end of League 2/ bottom end Championship paying? What are similar leagues in Europe paying? Should we pitch ourselves way down because of our principles to run at 57.237% ? Or do we need to be competitive? Do we pay transfer fees? Do we look to frees only?

Finally, there is also the potential that players can bring. I remember when we got the legendary Glynn Hodges on loan, we knew that the club couldn't afford to buy him, but they ran a Grand national Sweepstake to fund some of his transfer, for me his signing made a difference not only to results, but to getting bums on seats (feet on terraces).

 

[Highbury_Blade]

Well the wage bill will instantly come down by a million when Ched's contract runs out.

 

[broomhillblade]

Quite simply, we didn't plan to be in League 2, but we ended up here.

.

Strewth! Did I miss something?

 

[Kenilworth]

Good post Olls. Shows why good cup runs are an essential this year - more so than ever.
The longer we remain in a competition the more it takes pressure off the wage bill and if we retain the size of squad we have then we should be able to manage both league and cup campaigns.

 

[stannyblade]

And I'd say, hang on mate, Collins has been a part of a promotion winning team, played at a higher level etc etc etc and you've not played a dozen professional games yet.

How many has Slew played? If we rate Maguire then we should be looking at tying him up to a better deal.

 

[Sothall_Blade]

Although we have moved on Yeates and Henderson, we have kept Monty, Quinn, SS , Evans and Cresswell who are all undoubtedly on big contracts.

In addition to Yeates and Henderson, we have also moved on Ward, France, Jordan, Nosworthy, Bent, Calve, Lowry, Mattock, Riise, Vokes, Wright and Kozluk.
That's 14 players out and at least 9 of those came from Premier League clubs and would have therefore been on very high wages.
By contrast, we've signed 5 new players (Porter, Flynn, John Francis II, McDonald, Mendez-Laing) and given improved contracts to 2 (Slew and Lowton).
So the wage bill has already been vastly reduced from last season's even without any further departures.

The bottom line is that United will undoubtedly offload any high-earners at the first opportunity but they can't as they haven't received any offers yet.
McCabe publically said on Radio Sheffield that "whatever needs to be sensibly funded will be funded" and I expect him to keep his word on that.
If they don't receive any offers then McCabe will HAVE to make up the financial shortfall this season.

In terms of recruitment, I think Wilson would love to wheel and deal for his own choice of players but McCabe won't consider that to be "sensible" funding unless someone leaves. If we could loan out or sell fringe players such as Bogdanovich and Aksalu that would help.
Our current squad has enough numbers in every position except defence. Even then that's only because 3 Senior Defenders are out with long-term injuries.
Although it's not desirable a 3 month loan of a utility defender would make sense to bridge the gap until Taylor, Ertl and Morgan are available again.

 

[stannyblade]

Sothall, Do you think we have enough depth up front?
We have Cresswell, Slew, Boggy, Porter and Evans(dont think we will ever see him again in a blade shirt)
Maybe add Philliskirk to that list
Dont think we can get rid of Boggy myself unless we get cover in. We need at least one forward on the bench IMO just incase. Lets face it in this league the way they are being kicked about then there may be a time that we only have 2 fit strikers

 

[super_pig]

>Then young Mr Maguire will be knocking on DW's door very soon
i have it from the horses mouth (albeit second hand) that this is the reason the kyles left

 

[Sothall_Blade]

Sothall, Do you think we have enough depth up front?
We have Cresswell, Slew, Boggy, Porter and Evans(dont think we will ever see him again in a blade shirt)
Maybe add Philliskirk to that list
Dont think we can get rid of Boggy myself unless we get cover in. We need at least one forward on the bench IMO just incase. Lets face it in this league the way they are being kicked about then there may be a time that we only have 2 fit strikers

I think we have enough "numbers" with the six you mention, plus Tonne who plays striker for the Reserves and Mendez-Laing who played up front against Hartlepool.
Even if Evans never plays again and Boggy was sold, Wilson would still have a choice of six potential strikers to choose from.
The new mantra is to promote from within rather than buy or borrow and to sign another striker at the moment would go against that.

 

[Highbury_Blade]

>Then young Mr Maguire will be knocking on DW's door very soon
i have it from the horses mouth (albeit second hand) that this is the reason the kyles left

They left because HArry was coming through? Give over

 

[super_pig]

no because they were (astonishingly) still on youth wages when spurs offered them a gazillion pounds a week.. do i have to spell out everything ;-)

 

[Bladesway]

Great post this one and I think your analysis is pretty well on the mark here.

Lets be totally honest, the squad with a couple of exceptions is up for grabs. The actual cash offers are far less important than getting the player off the wage bill in my opinion.

It shows the utter mismanagement of the clubs wage structure, shelling out for absolute pish. I feel that totally by mistake, McCabe has actually got the right man in Wilson to get us back on the straight and narrow. He will most likely be operating on a "nothing in until players go out" basis and he's quite right to do so. Wilson knows this level and what is required. If we can keep Quinn and Cresswell I feel the rest are pretty expendable on one condition, they are replaced with players Wilson wants to get in.

P.S, Chedders will still be being paid because while he has been charged he hasn't been found guilty of anything so he hasn't done owt wrong. Although had he been arrested for crimes against football then he would have been off the wage bill 12 months ago.

 

[JohnDenver]

Well the wage bill will instantly come down by a million when Ched's contract runs out.

Or when we render him down for glue. Whichever comes first.

 

[Oreyt]

Or when we render him down for glue. Whichever comes first.

Is Ched our Jeffers?

 

[Jim Chimmerney]

How many has Slew played? If we rate Maguire then we should be looking at tying him up to a better deal.

I'm sure we will, I was just replying about the 'him banging on the door demanding as much as Collins' scenario.

 

[axel smeets]

Interesting post. McCabe bears a massive amount of responsibility for the club being relegated, therefore it is only right that he funds a wage bill large enough to enable us to compete as this level.

The Evans wages need to be off the wage bill one way or another and also we could perhaps do with either Montgomery, Doyle or Collins leaving as well in order that it would give us a better chance of keeping Stephen Quinn at BL.