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Wednesday
Aug102016

Why comparing wage bills is too simplistic

In February 2012, Arsenal Truth was one of – in not the first - blog to release an entire club wage bill estimate, which caused quite a stir at the time. I remember the astonishment of receiving 40,000 hits on the day that particular blog post was published.

Nowadays, blogs and newspapers are regularly publishing wage bills in order to make the assumption that if club X spends more money than club Y on wages, it must have the best players and therefore the greatest chance of success.

The top-line wage bill figure is usually taken from a football club’s statutory accounts, but there is a problem in taking this solitary figure and using it as barometer of a club’s obligation to succeed because a club’s wage bill comprises a lot more than just player salaries.

Take Arsenal, for example. The latest wage bill approximation (according to our good friends at Swiss Ramble) is approximately £192m. However, only 50-60% of that figure is actually spent on first team player wages; you also have to take into account the salaries of the under-21 and youth teams, manager and directors, senior executives, coaching staff, scouting staff, medical staff, ground staff and temporary staff.

Another element that the media fails to take into consideration when examining wage bills is the vast sums of money spent on social security, player bonuses, loyalty payments, image rights and appearance fees. There can be huge disparities between clubs regarding those payments - some might include them in the wage bill, others not, therefore club X may have a higher wage bill than club Y, but actually be spending less on player salaries - the amount that is supposed to dictate who has the most expensive (i.e. best) team.

For obvious reasons, how football teams’ wage bills are constructed is a pretty secretive affair. If you want to come up with an estimate, the only thing you can really do is take a club’s published wage bill figure and try to retrofit how it is pieced together using whatever known information you can cobble together from its accounts and other trusted media sources.  

To make things harder, in their latest set of published accounts (interim accounts to November 2015) Arsenal have decided to stop publishing a wage bill figure. Why the club has chosen to do this is a mystery, although I would presume – in-keeping with the club’s ever-increasing lack of transparency, it’s to discourage people from publishing estimates or making comparisons between other clubs.

A further aspect of wage bill analysis that is overlooked is the fact that the wealthier a club is, the more likely they will be ‘forced’ to overspend on wages. The more money a club is perceived to have, the more inevitable it is that they are going to be held to ransom every time they try to negotiate with a club or an agent. This can distort the perceived ability of players, because salaries and transfer fees are less based on value for money rather than the vast sums of money that happen to be available to a club.

That’s why the quality of a player can never be fully defined by his salary and a club’s wage expenditure can never accurately define the quality of its squad. The only exclamation we can make with any legitimate certainty regarding the size of a club’s wage bill  is that the bigger it is the more opportunity a club has to employ the best managers, players, coaching staff and scouts in world football. If you’re cash rich, the opportunity is there to be the best of the rest, but only if the club is able to allocate its resources effectively and talent pool the right management structure.

The reason I initially published Arsenal’s estimated wage bill on this blog was not to compare the club’s wage bill against other clubs, but to demonstrate the amount that the club was wasting on player salaries and deconstruct Arsene Wenger’s so-called socialist wage structure philosophy.

Last season we saw the difference between how having lots of money at a badly run club, Chelsea, and relatively little money at a well-run club, Leicester City, can mark the difference between abject failure and startling success.

This year, I will probably publish another Arsenal wage bill estimate, but it will purely be used so supporters can analyse who is getting paid what and whether that should be perceived as value-for-money within the confines of the club’s own budget and expenditure.

Meanwhile, if the media really wants to make the mistake of cross-examining clubs’ wage bills and theorising about who is obligated to win what, they ought - at the very least - to divorce first team player salaries from the rest of the wage bill before doing so.

Note: Arsenal Truth is now on Twitter @TruthArsenal.

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Reader Comments (1)

I've always paid little attention to wage bills and whether a player's worth what they're paid compared to other clubs because we have a manager incapable of getting the most out of those players, if that's the case then you could argue that none of them are worth it but under a different manager they might be.

It's difficult to judge. Where it's easy to judge is when the club pays youngsters high wages on long contracts before having earned it (Bendtner, Diaby etc. etc.) or giving a player a huge pay rise again before having earned it (like Walcott). But comparing wages between clubs seems pointless to me. As you said, Leicester have shown that it's not about money but how it's run.

It's like investing in a sports car to race and putting a shit driver in the car and claiming it wasn't worth investing in that car.

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AT

Nice analogy.

August 11, 2016 | Unregistered Commenterhenry8
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