Sweaty palms for the relegation contract killers

There will be a few chairmen of Premier League clubs with sweaty palms this weekend. 

Don’t worry – I’m not going to turn this blog into the News of the Screws. I’m talking about the fight for survival at the bottom of the division, and more importantly the financial consequences it will have on both the clubs and the players involved.

So what are they? Well, according to Sheffield United, a cool £50 million.

That’s not just a guess; that’s the amount they sued West Ham for after a court of law agreed with them that the illegal signing of Carlos Tevez cost them their place in the league.

Bizarrely, the judge made this decision after predicting West Ham's results had Tevez not been playing in the fixtures. The 'outcome' was that they would have had fewer points, and even more interestingly, Sheffield United would have stayed up on goal difference.

Unfortunately in the real world, the Blades were very much a Championship team. Cue massive compensation claim.

Tevez scores at Old Trafford – for West Ham

So the cost of relegation is £50 million. Well, not exactly.

The Hammers argued that in order for Sheffield United to maintain Premier League status, every last penny of that income would have been spent on bonuses, new player contracts, transfer fees and general facility improvements. So the cost is somewhere between £50 million and zero.

What we can be more certain of is the implication that the threat of relegation has on the way players’ contracts are structured – and specifically, how clubs have adopted their approach to the potential impending income loss.

West Bromwich Albion have become more of a yo-yo club than most, and as such have positioned themselves well in this area.

Their aim is not to be saddled with huge wage bills should the worst happen and they find themselves in the Football League. This is achieved by having a tiered contract which pays different amounts in the two divisions.

Meanwhile, any big earners should either be on short-term or temporary (loan) deals.

It's not an approach adopted by teams such as Newcastle United, who didn't have relegation on their agenda when they were negotiating the majority of the player contracts they currently have in place.

This is one of the reasons that relegation would have a far greater impact on them as a club.

"This place will be rocking for the Peterborough game"

This is exactly the position Leeds United found themselves in upon their exit from the top flight. The players had no reductions in their contracts and the club found the massive wage bill crippling.

Indeed, Leeds were so desperate to ease this pressure that they even agreed to pay a percentage on a number of players’ contracts after they had sold them on to other clubs – the theory being that it was better to relieve at least some of the commitment than be left with the full amount.

At the time, my client Alan Smith was a favourite son of the Elland Road faithful.

Amid the chaos after Leeds lost at Bolton to confirm relegation, Alan and I were invited to a meeting with the then chairman (not Peter Ridsdale). We were informed that, along with a number of other players, Alan was on a list given to an agent to sell.

We asked why a club so heavily in debt had decided to pay an agent in order to sell a player that over half the Premier League wanted.

The chairman replied: “You have to understand something, fellas: I haven’t got a clue what I’m doing.”

For the record, we refused to co-operate with the agent.

"Sorry lads, Big Sam clicked on 'Buy It Now'..."

I’m sure the Baggies are far better positioned to cope with relegation. In fact they would probably start next season as one of the favourites for promotion.

However, the consequences for the likes of Newcastle and Middlesborough are far wider-reaching – and, as Leeds have proved, potentially long-lasting too.

Read Alex Black's blogs here on FourFourTwo.com. Find out more about his clients at Football First Agency.

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