Managerial compensation and the process of hiring a contracted coach

A contracted manager changing clubs

When a club wants a head coach who already works somewhere else, it is trying to get that person released from a fixed-term employment contract. A manager is not registered the way a player is. No transfer certificate passes between national associations and no registration window has to be open. Legally, the coach is an employee with a contract that runs to a stated end date, and leaving early is a breach unless the employer agrees or the contract allows it.

BBC Sport reports that Eddie Howe is being linked with the Manchester United job, and asks what such a move would mean for him and for the club. The report gives no details of his contract, so its length, any release terms and any compensation figure are not known. The general mechanism is clearer. If a club pursues a manager in this position, it has to deal with three things: the current employer's consent, the money that buys out the remaining contract, and whether the coach fits the squad and structure they would inherit.

Origins of compensation culture

Managers in English football once had short or informal agreements, and clubs did not expect much payment when a coach left. As television income grew, contracts got longer and more valuable. Clubs started to treat a manager's remaining contract as an asset. If a rival wanted the coach, the club losing them expected to be paid for the years it was giving up, much as it would with a player.

Leagues also wrote rules against unauthorised approaches. Contacting another club's contracted staff without that club's permission, which is often called tapping up, became a disciplinary matter. That pushed the process into a set order: the clubs talk first, permission to speak to the coach is given or refused, and only then do personal terms come up. Managers' contracts got more sophisticated as well. Some now include release clauses that set a fixed fee for an early exit, while others say nothing and leave everything to negotiation.

The process today

Most approaches follow roughly the same order, though every case depends on the contract involved.

Permission to speak. The interested club asks the employer for permission to talk to the coach. The employer can refuse. It can also agree on condition that compensation is settled first.

Compensation. If the contract has a release clause, the fee is set and the employer has little room to block the move once the clause is triggered. If it has none, the figure is negotiated. It usually reflects the salary left on the contract, the cost and disruption of finding a successor, and how much each side wants the deal. The coach's assistants, analysts and fitness staff are often part of the same talks, since each has their own contract and the selling club may want payment for them too.

Licensing. Top-flight managers must hold the highest coaching qualification their confederation requires. For an established Premier League coach this rarely causes trouble, but the club still has to check it.

Personal terms. Salary, length of contract, bonuses and the coach's say over recruitment are agreed directly with the manager and their representatives.

Footballing fit. This part involves the most judgement, and it is what the BBC's question about challenges points at. A coach brings preferred systems, training methods and expectations of what players and staff will do. The incoming manager has to work out whether the existing squad suits that approach, how many players they would want to replace, and how decisions are split between the head coach and any sporting director or recruitment department. Domestic and European spending rules limit how quickly a squad can be rebuilt, so a manager who needs a very different group of players may need several windows to build it.

Common misconceptions

That managers are bought in transfer windows. Windows control when players can be registered. A manager can be appointed at any point in the season if the contract issues are sorted out.

That compensation goes to the manager. The fee goes to the club the coach is leaving, as payment for ending the contract early. The coach's own pay is a separate agreement with the new employer.

That a release clause settles everything. A clause sets the fee, but the club still has to agree terms with the coach, and with any staff who are not covered by the clause.

That a link means talks have started. Reports that a coach is being considered say nothing about whether permission has been asked for or given, let alone whether any figure has been discussed. In this case none of that is known.

That one coach can change a squad straight away. Squad building depends on contracts, sales, registration rules and spending limits. A new manager inherits all of these and cannot get round them.

Frequently asked questions

Do football clubs pay a fee to sign a manager?

Usually, yes, if the manager is still under contract. The money goes to the employing club as compensation for losing the coach before the contract ends. The figure is either set by a release clause written into the contract or agreed in negotiation between the two clubs. If the manager is out of work or out of contract, there is normally no compensation to pay.

Can a manager be appointed outside the transfer window?

Yes. Transfer windows control when clubs can register players, not when they can hire coaching staff. A club can appoint a new manager at any point in the season, provided the contract issues with the previous employer are resolved. This is why managerial changes often happen mid-season, while the players arriving to support a new coach still have to wait for a window to open.

What is tapping up a football manager?

Tapping up is contacting a coach who is under contract elsewhere, directly or through intermediaries, without the employing club's permission. League rules generally ban it, and clubs found to have done it can be punished. The proper route is for the interested club to ask the employer for permission to speak to the coach before discussing any personal terms.

Does a manager's backroom staff move with them?

Often, but not automatically. Assistants, coaches and analysts each have their own employment contracts with the club, so the new employer usually has to negotiate their release as well. The selling club may ask for extra compensation for these staff. Some may stay where they are, depending on the terms agreed between the two clubs.

What is a release clause in a manager's contract?

A release clause sets a fixed amount at which a manager can leave before the contract ends. If another club pays it, the employer generally cannot block the move, although the coach still has to agree personal terms with the new club. Not every contract has one. Without a clause, the compensation has to be negotiated and the employer keeps much more control.

Sources and further reading

• BBC Sport: the original report on the managerial link and the issues for coach and club
• Premier League handbook: rules on approaches to contracted players and staff
• The Football Association: regulations on coaching qualifications and intermediaries
• UEFA: club licensing framework and coaching qualification requirements