Pay Cut for Ally McCoist? Does Rangers’ Boss Have Highest Basic Wage in Scottish Football?

Rangers* do not have financial problems. Their Finance Director made that clear last week. They have £10 million in the bank after all!

But the doubts are still there. When former Directors like Messrs Johnston and King talk of administration, that, especially to Rangers fans, should ring warning bells.

So it was against that backcloth that the press reported Mr McCoist’s willingness to consider whether or not to accept a wage cut, if asked.

Recent criticism of spending at Ibrox has mentioned the salaries of executives and management. Mr McCoist’s basic wage is understood to be £700,000 (plus bonuses). As that was his salary with the now liquidated Rangers, he was entitled to insist on keeping those terms when his employer changed from Rangers Football Club PLC to Sevco Scotland Ltd/The Rangers Football Club Ltd and thence to Rangers International Football Club PLC.

He deserves credit of course for agreeing, it is understood, to a significant pay cut during the period of administration in 2012.

However he also appears to have been richly rewarded, including the issue to him of 1 million shares, described by some commenters as effectively “reimbursement” for the significant financial compromise he made to help his employer in 2012.

So what did he actually say? The Sunday Mail reported, at the above link, as follows:-

McCoist last night admitted he’d be prepared to take a pay cut to stop Rangers’ finances hitting the skids again.

…

After a week when the club’s finances have come under severe scrutiny by the fans, McCoist’s salary of around £700,000 hasn’t escaped attention.

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McCoist said: “Has anyone asked me to take a drop? No. Would I consider it if asked? Yes.

…

“So if someone said to me your wage bill is too high or your staff is too high, then that’s fine I can react to that. But until that comes it’s not my gig.”

It is not my place to say that Mr McCoist does not deserve his salary. That is a matter for his employers and for the shareholders of his employers. And, as the Good Book says, “the labourer is worthy of his hire”.

But if the general issue being discussed is the financial prudence of the Rangers Board post-Craig Whyte, as it is, then consideration must be given to Mr McCoist’s position, as indicative of the wider attitude of the Board.

Unlike in American sports, the salaries of Scottish footballers are not formally published. Therefore it is hard, though not impossible, to work out what players and managers are on.

It can be said however that Mr McCoist is undoubtedly one of the top two highest paid football managers in Scotland and, based on press reports about Neil Lennon’s wages being increased from £200k per year a couple of years ago, Mr McCoist is almost certainly the highest paid, and by some margin. Indeed I have heard from good sources that his earnings exceed that of the Parkhead management team added together!

As far as players go, wages are also made hard to calculate as a result of bonuses etc.

However, the website, Sporting Intelligence, carries out an annual survey of average wages in major team sports. In January 2011 Nick Harris reported the following (and the full piece can be read at this link):-

Celtic got off to a flyer in 2011 today by beating Rangers 2-0 in the Ne’erday derby, but one sign of how dramatically Scottish football finances have continued to deteriorate in the past year is found in Celtic’s deal to sign Freddie Ljungberg until the end of the season.

Freddy Ljungberg in his normal position for Celtic when he was the highest paid player in Scotland

Ljungberg, who did not play today because he has a virus, earned £16,000 per week in Major League Soccer in the USA, most recently with Chicago Fire, and Celtic put together a deal that effectively matches it to sign the Swede, 33, until the end of the season. That pay packet is understood to give Ljungberg the highest guaranteed basic wage per week in Scotland currently.

So, as at January 2011 the highest weekly basic wage in Scottish football was around £16k per week, or £832,000 per annum. Since then all of the highest earners at Rangers (or at least those on the playing field) have departed. As for Celtic, I would be surprised if any of its new signings are on a salary at that level, and few, if indeed any, of its existing players will earn a basic close to that sum.

So, on the face of it, is it possible that Ally McCoist has the highest basic wage in Scottish football? Very much so!

Few managers, it is fair to say, have had the challenges to face which confronted Mr McCoist.

After all, for the group of players one manages to ply their trade one season in the top division and then, in the immediately succeeding season, be three levels down, is not an experience many managers round the world have had.

In addition he lost the services of his highly-paid star players, leaving him reduced to only a handful of full internationalists and youngsters who had represented their countries. Facing such a mountain, and being backed only buy the second or third highest wage bill in Scottish football, Mr McCoist managed to overcome the part-time teams which faced Rangers* and led them triumphantly to winning SFL3 (something no Rangers team had ever done before).

Mind you, whilst his challenges might have been unique, it still seems awfully extravagant for the man leading the challenge to be the highest paid person in Scottish football!

If I was given the chance to speak to Mr Stockbridge, or even Mr Green, about this I would ask them the following questions:-

• Was any consideration given to reaching an agreement to terminate Mr McCoist’s appointment prior to the Green takeover? (The answer is probably negative, as he was an integral part of the process of reassuring fans about the future, and selling season tickets in 2012).
• Was any consideration given to re-negotiating his salary at or following the Green takeover? (The employer could not insist on this under TUPE regulations, but could have sought to reduce the wage packet by agreement).
• Was any consideration given to asking Mr McCoist to reduce his wages at some stage, either to reflect the reduced income of Rangers, or directly to help keep the company financially afloat?
• Was the issue of shares to Mr McCoist intended as a quid pro quo for his wage cut during administration, or was it hoped that he would allow his contract to be re-negotiated, with 1 million shares acting as a “sweetener”?
• Do they think it is prudent financially to pay their manager what might be the highest wage in Scottish football to get the team up from the fourth tier to the third, and then from the third to the second?

And as for Mr McCoist, first of all I should make it clear that it is nobody’s right to tell him he is being paid too much – good luck to him!

However, being, as he is, an honest man and a devotee of Rangers, surely he would realise that there would be value to his employer in reducing his pay (even temporarily) to free up more funds for investment in the team or its infrastructure?

Why wait for an approach from the Board?

If he gets on as well as he undoubtedly does with his CEO, why not suggest a reduction, or a re-structuring, to him?

Bobby Bonilla – the King of Restructured Contracts

(Talking of restructuring, many of my readers will never have heard of Bobby Bonilla, but his example is the most ridiculous and yet most memorable contract re-structuring ever. Mr Bonilla was a star player for the New York Mets baseball team. In 2000 he was due to be paid $5.9 million. The Mets wanted him off the books to free up money to sign someone else. They therefore agreed that, if Mr Bonilla would defer his right to the $5.9 million, the Mets would buy him an annuity which would pay him $1,193,248.20 on July 1 every year from 2011 through to 2035. So his agreeing to defer under $6 million results in him receiving almost $30 million! His deal survived the Mets investing the annuity with Bernie Madoff and, unless the Mets go out of business Mr Bonilla will continue to receive over a million dollars every year up to and including the year he turns 72. He never played a single game for the Mets under this restructured contract. Mind you, as the re-structuring depends on the Mets staying in business, one might see why Mr McCoist might not want to take the same risk with Rangers*!)

Telegenic personality that Mr McCoist is, surely the shortfall in his own earnings could be supplemented by some guest appearances on a Question of Sport or Loose Women?

If Mr McCoist takes a pay cut – maybe he could get a guest slot back on A Question of Sport?

If Rangers need to watch the pennies just now, then, with the greatest of respect, they cannot afford the most expensive manager in Scottish football, can they?

If an employer cannot afford to pay an employee, then it is possible to agree a revised pay deal, or, in the absence of agreement, potentially to make them redundant. However I suspect that it would be seen by the fans as a betrayal if Mr McCoist, who boldly stated that he did not do “walking away”, was forced out on financial grounds.

(However if sacked for his performance, I suspect that a number of Rangers fans would have no problem with such a decision!)

The final question therefore is whether or not Mr McCoist is a luxury which a third tier football team can no longer afford.

Posted by Paul McConville

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