Talking Tactics: Negotiating Contracts for Sporting Directors

1 . Termination Provisions and Severance Pay

Issue: All sporting director contracts will have detailed termination provisions and football clubs will often want to build in flexibility to terminate a contract with minimal liability (e.g. by including a wide range of grounds for dismissal).

Negotiating tips:

• Negotiate clear and narrow grounds for termination (e.g. gross negligence or gross misconduct determined by a formal disciplinary process) to limit the club’s ability to terminate without legitimate reasons.
• If engaged on a fixed-term contract, seek severance pay clauses that guarantee a lump sum payout in case of termination without cause, at least covering salary for the remainder of the contract and ideally any incentive payments or bonuses that would be due during that period.
• Similar to football managers, beware of any obligation to mitigate your loss (e.g. by actively looking for new work) and any reductions to severance payments if a new job is secured.

2. Notice Period and Garden Leave

Issue: Notice periods are often a key area of negotiation in these contracts. Whether the notice period is longer or shorter largely depends on the aims of the club and sporting director, but clubs will generally push for a longer notice period for senior football executives to ensure they cannot freely move to other clubs and there is time for a smooth transition to any replacement.

Negotiating tips:

• Negotiate a reasonable notice period (often between 6-12 months) that aligns with your objectives.
• If starting your first sporting director role, you may want the protection that a longer notice period brings, whilst an experienced football executive might push for a shorter notice period to allow them to move on to other opportunities quickly. What can be agreed will always depend on the relative bargaining power of the individual and the club.
• Additionally, if the club insists on a garden leave provision (which is standard), you should ensure you are paid your full salary and bonuses and retain your benefits, but are not required to perform active duties, giving you time to find a new job.
• Any period you are on garden leave should also reduce the length of any non-compete clause or post-termination restrictions.

3. Non-Competes and Post-Termination Restrictions

Issue: Post-termination restrictions are common in sporting executive contracts and, if they are properly drafted and enforceable under employment law, can severely limit future career options. These may include non-compete clauses preventing you from joining another club (e.g. in the same league) or non-poaching clauses preventing you from bringing staff with you to support you in your new role.

Negotiating tips:

• Ensure these restrictions are narrowly defined in terms of duration, geography and scope. For someone as influential as a sporting director, restrictions with a 6-12 month time limit with specific regional limitations (e.g. within the same league or country) may be considered reasonable and enforeable by law, but ideally these will be as narrow as possible. For example, the application of any non-compete might be limited to only the most direct competitors or specific roles (e.g. only executive positions at top-tier clubs).
• You might also negotiate a compensation clause during the non-compete period to provide some financial stability during the restricted period (although these clauses are more common outside of the UK).
• Non-poaching clauses should ideally include carve-outs that permit you to take staff members you personally recruited or brought to the club (e.g. your analysts or scouts).

4. Role Clarity and Defined Responsibilities

Issue: Although clubs bring in senior executives to perform critical (and often very specific) roles, their actual responsibilities are often vaguely or poorly defined in the contract. Ambiguity of roles and responsibilities can lead to disputes around the expectations of a sporting director and the scope of their role and can be used to force an individual out.

Negotiating tips:

• Ensure that the contract clearly defines your core role, responsibilities and duties within the club (e.g. managing recruitment/transfers, player contract renewals, overseeing the women’s team etc.).
• You will also generally give a warranty in the contract that you have the skill to perform your roles, which you will be less comfortable giving if your duties are not clearly defined and can be changed at the club’s discretion.
• There should still be some room for flexibility as your role develops given the fluid nature of the football industry, but any substantial changes to your role should always be agreed with you.

5. Board Positions and Operational Oversight

Issue: Some sporting directors sit on the board and those who do not are typically in attendance at, or privy to, board meetings. Being a part of the board or in attendance at these meetings can give you insight into club budgets and resource allocation. This also ensures you have prior knowledge of the financial and strategic direction of the club (e.g. how resources such as player wages and transfer funds are distributed) as you make medium to long-term sporting decisions and perform your responsibilities.

Negotiating tips:

• If you agree a board seat, this should ideally be an express right in the contract.
• If you do not have a board seat, then you should at least seek to include contractual rights to be privy to relevant board meetings (e.g. those at which budgets are discussed or decisions are made on player transfers/contracts) and have access to financial and operational reports.

Onside Law specialises in providing legal advice to clients in the sports and media industries. We are particularly experienced in the football industry and clients include players (such as Jude Bellingham, Eden Hazard and Eric Dier), clubs (such as AC Milan, West Ham, Leeds, Birmingham) sponsors (such as Kohler and Rollbit) and FIFA.

If you have any questions or simply want to find out more, please get in touch.

 

Alex Clarke	+ 44796 098 5667	alexander.clarke@onsidelaw.co.uk
Paul Musa	+44793 288 5170	paul.musa@onsidelaw.co.uk