What is a Wage Structure?

Simply put, a wage structure is a system which gives each player in a team a salary that correlates to how important he is to the team.

For example, a key player may be eligible for a wage of £40,000 p/w whereas a squad rotation player will only be eligible for £20,000 p/w.



How do I decide upon my wage structure?


To decide upon your wage structure, you must first look at your wage budget, your finances, and your club stature and ability to attract players of a certain caliber.

Let’s say that your board has given you a budget of £1,000,000 p/w. Realistically speaking, this budget should maintain a squad of around 20-25 players, plus money to maintain the youth and reserve teams.

Your youth team and reserve team, should as a rule account for no more than 5-10% of your budget. Keep that in mind when signing hot prospects or demoting a player to the reserves – if he is costing you valuable wages that you can’t afford, you may be better off selling.

So set aside the money for your reserves and youth, and you are left with around £900k p/w.

Now comes the important part: breaking down a team into its necessary components. In my opinion, each team should have no more than 4-5 key players, 6-7 first team players, and 9-11 rotation/backup players, to amount to a squad size of 22(one player for every position).

This is to ensure an optimum allocation of wages, and to ensure that no players feel that they are being left out.

Your three classifications of players – key, first team, and rotation/backup, should each take up 1/3 of your wage budget. By that I mean, each group should earn in total approximately £300k p/w each.

That means, if you have 5 key players, each should be earning £60k p/w, 6 first team players would be earning £50k p/w, and your rotation/backup players should be earning on average 27k p/w.



Salary caps, the pros and cons

Now that we’ve established what your ideal wage structure should be, we must think about how it affects you in the transfer market.

In every instance of managing a football team, there will be players who wish to join your club, who you are able to pay, but who you cannot realistically afford to sign.

These players should be ruled out immediately. If you are paying your key players 60k p/w, and he wants 150k p/w, he is out of the question. This is the sad part of maintaining a wage structure, that you have to be responsible for the finances of your club and cannot freely sign players.

However, the benefits of having a wage structure, while not as obvious, are numerous.

First of all, players will be easier to sell. As a rule, a player who earns less is more likely to attract another club. Look at Man City this past season, and the difficulties they had in offloading players like Craig Bellamy, Roque Santa Cruz, and Jo. These players were being paid too much that put them out of other clubs’ reach. If you cap their salary, it increases the likelihood that another club will be willing to match that amount, and hence you will have a much easier time in the transfer market.

Second of all, there will be minimal occurrences of escalating wages. Often times, if you pay one player an astronomical amount, other players will want wage parity, especially if they are of similar ability. I had this problem in FM10 where I signed Yoann Gourcuff, and paid him 130k p/w. Miralem Pjanic, my other attacking mid was only on 70k p/w at this time, and when I wanted to renew his contract he wanted his salary to match Gourcuffs. You never want this to happen, as one player earning a high wage can lead to 5 players wanting to match that in a few seasons time, and if you cannot afford to pay all your key players that amount then they may not wish to remain at your club.

Thirdly, it will help to keep your finances in check. If you are at a successful club, your wage budget will increase over time as club attendances grow. Soon, because of your wage structure, you will be spending under your allocated amount. At this time you can decide to improve your structure to attract more expensive talent, or you can simply enjoy the benefits of your strict financial control – less money on wages means more money in the bank, which means bigger transfer budgets, improvement in facilities and stadium size, and ultimately a happier board.



How to maintain a salary cap?

When you scout a player, your scout will report the player’s desired wage. Sometimes, even the low end of this wage will be more than you can afford to pay for the role you are giving him.

Take for example Lacina Traore.





He wants at a minimum £65k p/w. If I sign him, I will be signing him as a key player, which at my club means I can only afford to pay him 50k p/w.

However, if I offer enough money as a signing-on fee, he may very possibly decide to accept my wage structure. Remember this when offering a signing on fee: for every £10k p/w that you save, you save approximately £500k per year.

If you are offering a 4 year contract, this works out to 2 million over 4 years. In essence, the contract value is still the same (wage * time + signing on fees) and we have simply lessened the wages while increasing the fees. Since I will be saving £15k p/w on Lacina Traore’s salary, in reality I save £3 million, which is the wage savings of £15k p/w, multiplied by 4 years. I will offer him this money as a lure.





You’ll note that initially Traore wanted £85k p/w. However, I offered some of the money savings as a fee to the agent – an extra £1.7 million, and he persuaded his client to accept our offer.


Final thoughts

To me, mainting a wage structure is one of the most crucial, and at the same time enjoyable parts of football management. I get a hard-on when I see my financial control stat at 20, see my club in the green every single month, and when I can afford to reward my players not by ludicrous wage increases, but by giving them a share of the club profits in the form of high season bonuses and high renewal signing fees.

I hope this guide will help your financial control.


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