Viewpoints: Is a salary of £300,000 a week too much?

 
Gareth Bale and Florentino Perez, holding Bale's new Real Madrid shirt

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After a summer of speculation, Welsh forward Gareth Bale has finally completed a world record £85m (100m euros) transfer from Tottenham to Real Madrid. He will earn a reported £300,000 a week after signing a six-year contract. But are sky-high footballers' wages too much?

Bale's new contract means that he will double the yearly salary of UK Prime Minister David Cameron within just a week of work.

In return Real Madrid will be gaining one of the best players in the world, as they look to return to the summit of European football and win their 10th European Cup.

But at a time when many supporters struggle with rising ticket prices, are footballers' wages too high?

Steven Powell, policy director of the Football Supporters' Federation

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Steve Powell

At a time when income from broadcasters and sponsors has never been higher, tickets are in orbit”

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Gareth Bale's new employers Real Madrid will - if reports are to be believed - be paying him more than £250,000 a week. That's £13m a year. Put another way, the Welshman will earn in just seven days what many of those who'll follow him in the stands at the Estadio Bernabeu earn in an entire decade. Nice work if you can get it.

While the cost of watching Real Madrid in the Bernabeu in La Liga hasn't quite scaled the heights of big-time Premier League clubs yet, ticket prices have been rising rapidly in a country where most clubs are skint after decades of overspending. Unemployment in Spain afflicts one in four, rising to more than one in two for young people. And you thought it was bad enough here!

Steven Powell

  • Arsenal supporter for more than 44 years
  • Director of policy at the Football Supporters' Federation

As former Football League chairman Lord Mawhinney said: "Football doesn't have an income problem. It has a spending problem."

Too right. At a time when income from broadcasters and sponsors has never been higher, ticket prices are in orbit, yet record numbers of clubs are drowning in a sea of red ink.

Sky-high player wages put upward pressure on ticket prices. If you've paid an arm and a leg for a ticket and you see somebody playing for your club wandering around the park like love's young dream, apparently totally uninterested in getting his finger out and putting in some effort, this adds to an increasing sense of alienation amongst many supporters.

Football needs to keep ticket prices down, indeed cut them, if it is to remain the people's game.

Gareth Bale's contract: £85.3m over six years; £300,000 a week; £42,857 per day; £14.22m per year
Clarke Carlisle, chairman of the Professional Footballers' Association

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Clarke Carlisle

The football industry is a multimillion-pound industry worldwide, so the purveyors of that industry should reap the benefits”

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Footballers' wages are dictated by the market. Football, like any other industry, conforms to supply and demand. The football industry is a multimillion-pound industry worldwide, so the purveyors of that industry should reap the benefits.

Especially when you're talking about the upper echelons of football, [those guys] really are the minute percentage. And just like the minute percentage of actors receive [and] musicians may receive millions upon millions per album [or movie], the minute of footballers will receive the best wages according to the income of the industry.

My opinion is that the high wages may well create a disconnect between the fan and the player because there's a distinct lack of comprehension about the figures, myself included. I'm a former professional and I never escalated to the levels of what our current professionals earn at the high end.

So when you think of £20,000-£30,000 a week, that's beyond my comprehension, [and] when you factor that out by 10 and say £200,000 or £300,000 a week, that is way beyond my comprehension.

Clarke Carlisle

  • Former defender for clubs including Burnley and Queens Park Rangers
  • Chairman of the managing committee of the Professional Footballers' Association (PFA)
  • Due to be replaced following retirement from football at end of 2012/2013 season

But so is the income of £50m a movie, so is the income of Mr Bill Gates, so is the income of many other people. The thing that makes footballers' wages such a controversial subject is that football is tangible to every human being, whereas being the founder of Microsoft or Apple, or one of the greatest actors the world has ever seen, is not.

Football is a sport that has become an entertainment industry, where the consumer demands a standard of product but they consume that product to be entertained. It's no longer a sport.

[A footballer's career is also more fragile], the average career span of a footballer is eight years. A musician or an actor's [career] can be anywhere between a one-hit wonder and a full 30, 40, 50, 60 years in the career. Football at a maximum is between 16 and 20 years.

Karen Gill, granddaughter of Bill Shankly and honorary president of Liverpool Football Club Supporters' Committee

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Karen Gill

[The wages situation] seems to have spiralled out of all proportion and seems utterly absurd and ridiculous”

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Like most logical people, you realise that because [football is] a business, and [owners] make a lot of money out of football players, [it] then becomes like a vicious circle [of increased wages].

But it seems to have spiralled out of all proportion and seems utterly absurd and ridiculous, especially when people working very, very hard can barely scrape a living. It's obscene almost, and especially over the last five [to] 10 years where it seems to have become more and more ridiculous the amounts of money that people are willing to pay them.

It's almost provocative, in a sense, when the whole world is in crisis [that] you've people in the entertainment business who are just making so much money - and obviously that goes the same for other groups of entertainers.

We were saying yesterday that there should be a salary cap and somebody even suggested a wage according to performance - all of these are just suggestions but it shows that people are thinking about how absurd it seems and that something has to be done about it.

Karen Gill

  • Granddaughter of legendary Liverpool manager Bill Shankly and author of The Real Bill Shankly
  • Patron of the Spirit of Shankly and AFC Liverpool, honorary president of Liverpool Football Club Supporters' Committee

Sometimes ticket prices go up but facilities for fans get worse or are not very well maintained. Everything becomes more expensive for supporters, it's ludicrous really.

My granddad was so passionate about football that he would have played for nothing. He would have managed for nothing. He always said that you just need enough [to get by], he wasn't into luxuries or anything like that - that's the way he'd been brought up.

He believed that people who really wanted to play should feel the same way. Obviously there were arguments about money then as well but that passion to play is the most important thing.

Some players nowadays aren't really that interested about the game as a game.

Dr Peter Dawson, lecturer in economics at University of East Anglia

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Peter Dawson

Superstars command higher salaries because these individuals are in scarce supply and not because they are more deserving”

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Is Gareth Bale worth £250,000-£300,000 a week? To the average man or woman on the street the answer is likely to be a resounding no.

However when considering the earnings of individuals we should take account of supply and demand. In the case of supply factors, superstars (whether this be in sport, music, movies) typically command higher salaries because these individuals are in scarce supply and not because they are more deserving than, say, teachers or nurses. In general, the more unique the skillset the individual possesses the higher the potential salary.

Demand factors are also important. Why would a firm, or in this case a football club, be prepared to part with this kind of money? The obvious answer is that they will expect to receive some kind of return on their investment.

Essentially Real Madrid, and football clubs more generally, believe they will be more successful and their brand more lucrative (through merchandising sales, advertising and sponsorship deals) with star players such as Bale in their team. Overall, the combination of big demand and limited supply is what generates such high salaries.

Dr Peter Dawson

  • Research in the area of applied micro-econometrics, in labour economics, education economics and particularly sport and leisure
  • Member of the Royal Economic Society and the International Association of Sports Economists

Much has been written about Bale's contribution to Tottenham in the number of crucial goals he has scored and the number of assists - and his performances in European competitions over the last few years have undoubtedly increased his market value. At 24 years of age he is still relatively young (most footballers reach their peak around 28).

Real Madrid have a history of signing high-profile players (Galacticos). Bale has been purchased by Madrid to deliver on-field performance but his potential contribution off the field - and the revenue streams this is likely to produce - has also contributed to the size of the transfer fee and salary Madrid have willingly paid. Clearly Real Madrid are looking to Bale to achieve an impact similar to Cristiano Ronaldo.

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Pete Jenson

[Madrid] were top of the latest Forbes football rich list and Perez sees the acquisition of Bale as keeping them there”

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Pete Jenson, Spanish football expert

Now he is officially a Madrid player, the launch of brand Bale can really begin in earnest.

Madrid missed the opportunity to show him off to the world during Sunday's midday kick-off against Athletic Bilbao in what would have been prime-time in Dubai, from where their shirt sponsor Emirates would have been watching.

Emirates are now counting the days until January when they hope Madrid will play a lucrative friendly in La Liga's mid-winter break against them, with Bale as the main attraction.

"I think it is a commercial operation," said Real Madrid's former sporting director Arrigo Sacchi earlier this summer. "I think Madrid, through their sponsors, have decided to buy a British player."

Football and the working class

Are football's traditional links to the working class being undermined by sky-high wages, £50m transfer and match tickets up to £126?

BBC Consumer asks a fan, a fansite owner and a finance expert for their views.

Madrid certainly saw how, when Neymar signed for Barcelona, the Catalan club signed a new deal with Panasonic just days later.

The audiovisual giant was already one of the player's sponsors in Brazil and Bale will cede 50% of his image rights to the club. They will want him to keep pushing up the 512m euro income they registered at the end of the 2011-12 season - figures that keep Madrid inside Financial Fair Play regulation and prevent too many questions about an estimated debt of close to 600m euros.

They were top of the latest Forbes football rich list and Perez [Florentino Perez, the current president of Real Madrid] sees the acquisition of Bale as keeping them there.

 

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  • rate this
    +1

    Comment number 611.

    It is obscene. There's some disconnect when some on here are saying it's alright and indeed should be encouraged, yet will be the same people complaining their local school can't afford books and equipment for the want of a lot less than mentioned here. Football has nothing to do with a game any more; that fans still believe it says much about their naivety. England can't win anything, why?

  • rate this
    0

    Comment number 610.

    Yes

  • rate this
    +4

    Comment number 609.

    If they get paid that much, can they at least take a few knocks like men, instead of diving to the ground and crying over nothing?

  • rate this
    -5

    Comment number 608.

    for those of you who think its fine imagine your reaction if the article said single mother on benefits receives £3000 per week 100th of his salary, you would rightly be outraged but then again it is a footballers wage and one bad tackle can end his career.

  • rate this
    +2

    Comment number 607.

    That kind of wage is just ridiculous in my opinion. Yes, we all dream of being that rich but what is he being paid for..playing a game we all played on the playground at school?

    Society should value scientists and people who drive the worl - not some people who aspired to play games all their lives in a sport which is constantly used as an excuse to stab people and cause violence and damage.

  • rate this
    +2

    Comment number 606.

    593.TurkeysVoting4Xmas

    The reason is this: when people are asked to pay their footballers more via a hike in season ticket prices they begrudgingly hand over their money. When people are asked to pay their nurses more via a hike in taxes they clamour for revolution and vote for the other party. People can only be paid what other people are willing to pay for them.

  • rate this
    -2

    Comment number 605.

    Supply and demand .. blah, blah.
    For the deal to be sound financially, Bale must generate EXTRA profit equal to his cost.
    Over 6 years, he will cost around €200 million.
    1,000 new spectators at 100€ every home match is around 20 million.
    100,000 new shirt sales every year at 50€ is around 15 million assuming 100% mark-up.
    Yep, as we already knew, it's a vanity purchase.
    Good luck to the lad.

  • rate this
    +1

    Comment number 604.

    "385.Stevie

    Top Business people, Actors, Musicians etc... all get paid more than this a year. So why the outrage when a footballer does?"

    -------------

    Probably because it's 300k a week and not a year

  • rate this
    0

    Comment number 603.

    as each day passes his salary seems to increase? one day its £200k, then its £250k and now its £300k

    anyway.....salary's are reflected to the income of the sport, isn't a boxer whos paid £10m-£20m a fight on the same percentage of income, aren't tennis players etc?

  • rate this
    0

    Comment number 602.

    @544

    Simpy, RM pay TH an £85m fee for Bale's services and RM pay Bale £300k a week salary. It's more complex though with things like fee stage payments, payments for image rights, a chunk for Bale's agent, add ons for performance, sell on clauses etc. THFC were rumoured to be trying to get a clause for RM to pay £10m more if RM sold Bale on to a Premier League club within 4 years.

  • rate this
    +2

    Comment number 601.

    As long as people want to pay to watch these people kick a ball around then the wages are justified.

  • rate this
    -2

    Comment number 600.

    It's not like Bale is taking money from the British taxpayer, like the 'baled' out banks or erm the Royal Family.

  • rate this
    -3

    Comment number 599.

    No way, he should get whatever the club is happy to pay him, he deserves it for his skills/dedication, the market says so. Who are you to pick some arbitrary random figure like 500K?

    So what if he doesn't pay 50% either, whenever he spends the money it'll go back into the economy. left-wingers selfishly always think they're owed what others have.

  • rate this
    +42

    Comment number 598.

    at last ''someone'' is finally asking questions about these crazy salaries!

    i wonder how much tax these people actually pay!

    up until now only industry captains (who create jobs) and bankers (enough said) are the only people criticized, and they dont earn anything like these salaries!

    ''at last someone is shining a spotlight here'' - now investigate their tax loop-holes as well.

  • rate this
    +1

    Comment number 597.

    What's the point of arguing? He has the scarce skills that are highly demanded. The market has determined his salary.

  • rate this
    0

    Comment number 596.

    @ 544. Chris

    THFC get £86m. However £86m is the max they will get. Usually clubs do not just wack out the total. They pay over time. So the final figure arrives at £86m. There could be an initial up front fee of £20m etc. So it could be 60-70m then over 5 years the interest adds up to the £86m

    His wages are paid entirely by RM. Also THFC will get a dividend if they negotiated sell on clause

  • rate this
    +1

    Comment number 595.

    @ 29:
    "If you really want to change the footballing world stop paying the ridiculous costs"

    Why do people believe that there is no 'footballing world' outside the top level?? We're seeing a local non-league game tonight (FA Cup preliminary round replay). It's a fiver to get in; we'll be socialising in the cosy club house afterwards. And it's usually good fun to watch. Try it some time!

  • rate this
    +1

    Comment number 594.

    All this money swilling about comes from sponsorship and advertising revenue. If expenditure on advertising and marketing were not an eligible expense on company accounts. We would see a massive rise in tax revenue and a reduction in the excesses of the media and marketing industries.

  • rate this
    +2

    Comment number 593.

    564.DeeplyConcerned
    "Yes, a nurse is more valuable to society than a footballer. But which society are you referring to?
    A nurse will work in a hospital with a catchment area with maybe a 30 mile radius. Real Madrid have a GLOBAL audience. People in Malaysia now know of Bale...
    I don't even know the name of my local GP"

    So? I don't think the value of nurses lies in how well known they are

  • rate this
    0

    Comment number 592.

    Do away with TV football on subscription only - it should be pay per view only. That would be more like a real market - now it's just gouging the fans. I don't have to buy a season ticket for all clubs if I go to my team's ground - why should I for TV?

 

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