Senior executive employees – do you feel sorry for David Moyes ?

As a lifelong Chelsea supporter, on pure football terms I am happy to see the stark decline of Manchester United, but I can’t help but feel sorry for David Moyes. Many senior employees in all types of business can face situations where they may take flak from internal stakeholders or perhaps public or even regulatory

Home » David Swede » Senior executive employees – do you feel sorry for David Moyes ?

As a lifelong Chelsea supporter, on pure football terms I am happy to see the stark decline of Manchester United, but I can’t help but feel sorry for David Moyes.

Many senior employees in all types of business can face situations where they may take flak from internal stakeholders or perhaps public or even regulatory stresses but there can be few who are such publicly pilloried as the current Manchester United manager. He looks to me like a guy seriously under stress.

Football contracts are always interesting, since they tend to be somewhat different even to other senior executive employment contracts. Such contracts are rarely tested in the courts and the way such contracts are reported may not be entirely accurate. If David Moyes does get sacked by Manchester United, many would say that any sympathy they have for what he is going through is significantly tempered by the likelihood that he will get a huge payout representing the remaining 5 and a bit years of his contract, reported to be worth perhaps £5-6 million annually. If correct, he would never need to work again.

But is it as simple as that ?

Well we don’t know, because it depends on the terms of his contract.

On the face of it, he has a fixed term contract and if it’s breached, he may be entitled to be paid out the balance. But what if there is a break clause, based simply on a set period of time, such as every year or 2 years in the contract enabling the club to terminate it early without paying a further balance ? What if the contract has performance targets which if not met give the club the right to terminate early without paying the balance of the fixed term ? Such a clause could be related top Champions league qualification as an example. The contract may have other provisions whereby even if the club terminate early, on the face of it in breach, the Manager does not as of right get paid out the full fixed term – damages could be fully or partially linked to whether the Manager gets another job quickly. There are many variables which we don’t know about.

When appointing David Moyes, Manchester United publicly made a point of stating the very long length of the contract. After Sir Alex Ferguson had been at the helm for nearly 3 decades, the club clearly wanted to make a statement, both externally and probably internally (to signal to the players the club’s wish for them to know the new Manager would be around for a long tome). It doesn’t look as though this has perhaps worked, or doesn’t seem to be at the moment. It is entirely possible that the 6 year contract is not exactly as it appears.

As an indication that fixed term management contracts may be more variable than initially appears, there are often reports of dismissed football managers waiting to accept new job offers until their old contract termination package is finalised. This indicates that there may be clauses in their old contract which do not simply allow liquidated (fixed) damages to be paid, but instead damages may be linked to mitigation of loss by the Manger i.e seeking alternative employment and only getting damages for actual loss whilst not employed. It is a common mistake in all types of contact to overestimate recoverable damages and/or to forget or fail to mitigate losses.

The above perhaps also explains why some football mangers who have previously been at big clubs don’t seem to get new jobs for a very long time. This may be linked to clauses which mean that on taking a new job they have to repay some of payments they received when being sacked previously.

David Swede - head of commercial law department
David Swede – head of commercial law department

So, in addition to having the weight of the world on his shoulders, we perhaps shouldn’t assume that if he gets sacked, Mr Moyes will be “quids in”. This may or may not be the case.

 

David Swede

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