Soccer Clubs Spend More on Players Than Managers: Exploring the Reasons

Nine months ago, Liverpool made a significant investment by acquiring midfielder Dominik Szoboszlai from RB Leipzig for £60 million, a strategic move aimed at rejuvenating their aging midfield lineup.

by Faruk Imamovic
Soccer Clubs Spend More on Players Than Managers: Exploring the Reasons
© Getty Images/Naomi Baker

Nine months ago, Liverpool made a significant investment by acquiring midfielder Dominik Szoboszlai from RB Leipzig for £60 million, a strategic move aimed at rejuvenating their aging midfield lineup. This transaction highlights the high financial stakes involved in football transfers, a fascinating aspect of the sport that often goes unnoticed by casual fans. In contrast, the club proposed a significantly lower offer, less than seven times the amount spent on Szoboszlai, to secure a managerial successor for Jurgen Klopp, which sheds light on the intriguing disparity between player and managerial valuations in football.

Liverpool's recent move to start negotiations with Feyenoord for their manager, Arne Slot, is a prime example. Despite Slot's successful track record in the 2022-23 Eredivisie season, Feyenoord rejected Liverpool's initial €9 million offer. This ongoing saga not only underlines the complexities of managerial negotiations but also raises questions about the valuation differences between players and managers.

The situation is not unique to Liverpool. Chelsea's 2022 acquisitions illustrate similar disparities. They purchased left-back Marc Cucurella from Brighton & Hove Albion for a whopping £55 million and subsequently secured Brighton's manager, Graham Potter, for less than half that amount (£22 million). Aston Villa's dealings also reflect this trend, having paid £26 million for Brazilian defender Diego Carlos and only £5.2 million to bring in manager Unai Emery from Villarreal.

Understanding the Valuation Discrepancy

The stark difference in fees paid for players versus managers is a topic of debate among football financiers and analysts. Sasha Ryazantsev, Everton's former chief finance officer, points out that unlike players, managers do not have the same type of contractual release clauses or registration rights with UEFA. This fundamentally changes how their transfers are negotiated and valued.

Players are bought and sold with registration rights, meaning the transfer fees essentially cover the cost of these rights, allowing the player to compete in official matches under new club banners. Managers, however, do not require such registration, which theoretically makes their acquisition less complex and potentially less expensive.

Moreover, the resale value of a manager is virtually nonexistent compared to players. If a player does not perform well, they can still be sold, possibly at a reduced price, but this is not the case with managers. Once a manager is hired, the investment is generally considered non-recoverable, as clubs are more likely to terminate a manager than to sell them to another club.

The timing of these transactions also plays a critical role. Players are often showcased and marketed by their clubs over time, creating a competitive auction environment that can drive up prices. Managers, on the other hand, are typically hired more urgently and without the luxury of time, leading to quicker, less lucrative deals.

Ryazantsev further highlights that the traditional player transfer structure and the ability of clubs to engage in competitive auctions do not apply to managers. This lack of a "managerial market" similar to player transfer windows contributes to the lower fees observed.

Everton FC v Liverpool FC - Premier League
Everton FC v Liverpool FC - Premier League© Getty Images/Michael Regan

The Impact of Managerial Changes

The role of a manager in a football club is pivotal and extends beyond the tactical and strategic guidance on the pitch. Tim Keech, co-founder of MRKT Insights, emphasizes that a manager's departure can often disrupt the club's dynamics more severely than the transfer of a player. Managers form intense relationships with the club's hierarchy, and any hint of their departure can break the trust essential for smooth operations.

Clubs are sometimes hesitant to demand high fees for managers due to the potential disruptions their departure might cause. Additionally, managers typically have contracts that reflect their strategic importance, often aligning their salaries with those of the highest players in the team. This emphasizes the recognition of their crucial role, even if their transfer fees do not mirror this importance.

The negotiation process itself is starkly different between players and managers. While clubs might hold firm on high transfer fees for players, hoping to cover potential replacement costs and leverage any premium for their loss, negotiations over managerial compensations tend to be more about cutting losses and moving forward.

Financial Implications of Managerial Transfers

The lack of registration rights for managers further simplifies the transaction from a regulatory standpoint but complicates it from a negotiation angle. Since managers can be dismissed or can resign without the need for a transfer window or similar regulatory hurdles, the dynamics of their hiring are more fluid and subject to immediate needs rather than long-term planning.

The Strategic Value of Managers in Football

Despite the financial disparities, the strategic value of a top-tier manager cannot be underestimated. A manager's ability to influence the team's playing style, morale, and overall success is profound. For instance, the managerial philosophies of Arne Slot and Jurgen Klopp are not just about directing play on the field but also about managing player development, game strategies, and club ethos.

Furthermore, the role of a manager extends beyond the tactical to include significant contributions to player acquisitions, development programs, and even the broader club culture. These contributions, while not directly quantifiable in terms of transfer fees, are crucial in elevating a club's stature and success rate.