Back loading contracts

[EalingBlue2]

Is clearly something we need to do especially with the new tv deal and nike deal!
We are likely 50m - 70m better off next season after tv sponsorship, Nike and losing ade rsc, bridge etc

We should give contracts that back load ie first year 80k Pw rising 20k each season an incentive to stay and good for FFP - this is a very common practise in sports with salary caps! Ie we pay you 200k first season and 400k 2nd and 3rd. This could easily make 15m difference if we were to sign 4 new players

 

[Paul11/12]

Is clearly something we need to do especially with the new tv deal and nike deal!
We are likely 50m - 70m better off next season after tv sponsorship, Nike and losing ade rsc, bridge etc

We should give contracts that back load ie first year 80k Pw rising 20k each season an incentive to stay and good for FFP - this is a very common practise in sports with salary caps! Ie we pay you 200k first season and 400k 2nd and 3rd. This could easily make 15m difference if we were to sign 4 new players

Sounds good from our side but there is no salary cap, so any top player City go for wouldn't agree surely?

 

[oakiecokie]

Somehow I can`t see Agents "falling" for this.

 

[doggiesin08]

Agree with Paul.

A player would prefer the whole contract paid at the start and get some interest on their dosh. They're hardly going to slide down a tax bracket so would prefer more early.

Also we're having trouble getting rid of some players at the moment as it is. Image if Bridge was going to make even more next year, hardly an incentive to leave.

 

[EalingBlue2]

I am talking about new players not Wayne bridge - the incentive is that they could earn more overall ie it could make sense in FFP to offer a player 75k a year y1 140k y2 and 160k us 3-5 if it was this or 120k a year flat there would be a clear incentive. This strategy makes a lot of sense if a) profit is not our main goal and b) we know our financial situation is improving and we have future cash flows that are better.

Things like this could make a difference on FFP passing or not. I realise there is no salary cap but FFP is an operating profits cap in effect

 

[doggiesin08]

I am talking about new players not Wayne bridge - the incentive is that they could earn more overall ie it could make sense in FFP to offer a player 75k a year y1 140k y2 and 160k us 3-5 if it was this or 120k a year flat there would be a clear incentive. This strategy makes a lot of sense if a) profit is not our main goal and b) we know our financial situation is improving and we have future cash flows that are better.

Things like this could make a difference on FFP passing or not. I realise there is no salary cap but FFP is an operating profits cap in effect

No shit you weren't talking about offering Wayne Bridge a new back loaded contract. My point was that Wayne Bridge was a new player once too.

1. The player flops (ie Bridge) and the increases make it even more difficult to shift the player. He has an increasing incentive to not leave for game time elsewhere.

2. The player does really well and the club is hardly going to want to let the players contract get to its final years and be left in a situation like RVP at Arsenal. The increases in the later years of the original contract don't actually occur. In order to get the player on a longer contract they'll need to negotiate (most likely) a larger wage and the players will factor in that they've been relatively underpaid for the years they've already given.

Ideally what you're saying would be a good idea because you can pay the players more as our own revenue goes up. But along with the fact that agents clearly understand this, it simply wouldn't work in practice.

 

[Paul11/12]

I am talking about new players not Wayne bridge - the incentive is that they could earn more overall ie it could make sense in FFP to offer a player 75k a year y1 140k y2 and 160k us 3-5 if it was this or 120k a year flat there would be a clear incentive. This strategy makes a lot of sense if a) profit is not our main goal and b) we know our financial situation is improving and we have future cash flows that are better.

Things like this could make a difference on FFP passing or not. I realise there is no salary cap but FFP is an operating profits cap in effect

No shit you weren't talking about offering Wayne Bridge a new back loaded contract. My point was that Wayne Bridge was a new player once too.

1. The player flops (ie Bridge) and the increases make it even more difficult to shift the player. He has an increasing incentive to not leave for game time elsewhere.

2. The player does really well and the club is hardly going to want to let the players contract get to its final years and be left in a situation like RVP at Arsenal. The increases in the later years of the original contract don't actually occur. In order to get the player on a longer contract they'll need to negotiate (most likely) a larger wage and the players will factor in that they've been relatively underpaid for the years they've already given.

Ideally what you're saying would be a good idea because you can pay the players more as our own revenue goes up. But along with the fact that agents clearly understand this, it simply wouldn't work in practice.

The players we have bought in the past have been hit and miss to name but 3, Adebayor, RSC and Bridge, have played a handful of games between them, but with your idea of a salary cap improving by a % each year we'd surely be losing money hand over fist. It's hard enough trying to sell them , it's easy to put them out on loan while they get all of their salary. But would be impossible with a yearly increase! We could buy the next big thing for £50 mill pay him £150k rising to £300K over 4 years and it turns out he's not suited to the prem/ doesn't fulfill his potential/bad injury, so many things to go wrong IMO!

 

[EalingBlue2]

Fundamental difference is I believe we no sign silva's, yaya's and aguero's and will sign well and go forward . You are fearing signing bridges, Rockies and ade's! We either don't sign players so we can meet FFP or we look for ways to ensure we can. In truth it would only be year 1 of a 5 year contract we would need to do it for!

But if our transfer strategy is based on fear of roque bridge, Jo, ade etc then we would be best never signing anyone<br /><br />-- Sun Jul 01, 2012 3:05 am --<br /><br />I see such things a lot in business where artificial constraints are at play such as budgets, future cash flow changes etc and it can work well for both parties as it is pretty simple to net present value any deal to ensure it works

 

[Paul11/12]

You mention Silva and Yaya, I remember watching them both in there early city games(I sit next to the city dugout) as far as Merlin is concerned in his first 6/7 home games all i could hear around me after 50/60 mins was "get Johnson on" so the fans weren't impressed to start with, it took maybe 20/25 games for him to adapt, and how he's adapted, and it took Yaya even longer, people around me were slagging him off for being a lazy c**t after 12 months, but now we know every now and then he needs a breather cos he puts so much effort in when making his forward runs, Mario and Edin still not liked by lots of blues. Sergio a different class, but what i'm saying is if things had gone differently 4 of those 5 could of not worked out for us and they could be earning fortunes sitting on their arses!

 

[EalingBlue2]

If you ensure two contracts have the same or similar NPVs you pay the same over the contract life a d if you save y1 and then they can't shift them then yOu can incentivise them with the amount saved. It really is a no brainier and the only downside is the 5% loading you would havegot give as premium to get them to agree . But that 5% if it got you over the line for FFP or let you buy a player who scored Champs lg winning goslcould be worth 10x that!

You are worrying about later years but having already made the saving you are in credit and if they flop and go early you are sorted

 

[Glauber Berti]

the easy way to solve this is to have a performance based back-loaded contract ie: play 10 premier league games get your 2nd year payment. or do it on goals or something this negates the issue of free-loaders like bridge sponging the club for more money.