Staff and Payroll
There are two areas to watch. The obvious one is that that the wages just don't get too high. The 2008 figure shows the club brought in players on higher wages in an attempt to gain a position in the Premier League. The wage increases through the previous seasons had been measured and reflected the rise through the leagues.
The second area to keep an eye on is the ratio of the wages to the income. Deloittes who do some in-depth analysis of football finances reckon the target for this ratio should be 50-60%. This allows the club to cope with the costs of running the business, buying the occasional player, running a youth development system, putting on games, maintaining the ground etc.
The Hull figures again point to a potential problem. The 2008 figure shows that 124% of the money coming in to the club was given to the players. This is clearly madness, and totally unsustainable.
In 2009 the number of people employed within the footballing side of the business comes to 76. This works out as an average of £442,000 each !! This covers everyone down to trainees, and all the coaches as well as the first team players. Being a bit kinder to the club would be to look at all the employees.
The graph below shows the number of staff employed by Hull. This has crept up fairly steadily of the years. If the admin staff are included in the average wage calculation then every employee of the club is still on an average £261k per year!!
The biggest issue facing the club with relegation is the size and profile of the wage bill. Clearly a lot of very expensive players were brought in on high wages. The hope has to be that the contracts for these players have a relegation clause in them that allows the club to reduce wages. No other club seems to have had this, so there is a good chance Hull won't be any better off. This is where Adam Pearson has his biggest challenge. If a dozen extra players have been brought in on (say) four year contracts and paid an extra £20m a year then contractually the club may be stuck with that. As with Newcastle and Geremi who was on a long-term lucrative contract that he clearly felt was worth just sitting on. Hull may well end up with similar problems. The other downside to these sort of contracts is that the club have to sell off their saleable players to raise money rather than the ones they would rather get rid of.
