Why Moyes “leaks” mattered for pay-off negotiations

Published 26 April 2014 | Authored by: John Mehrzad

In my blog in the immediate aftermath of David Moyes’ sacking on Tuesday, I set out an overview of the legal contractual and statutory remedies in a football manager dismissal scenario (see previous blog post1).

At that stage the press reported that United was contractually obliged to pay Moyes £4.5m, the equivalent of one year’s salary, under the terms of an agreed termination clause within his manager contract.2

 

Pay-off

A deal is reported now to be concluded3, the terms of which are almost certainly subject to a confidentiality clause, so we are unlikely ever to know the precise “pay-off” sum. The question is whether Moyes may have received more than the £4.5m termination payment?

As predicted in Tuesday’s blog, the League Managers’ Association stepped in to represent Moyes and a deal has now apparently been done without recourse to arbitration.

Whilst Moyes himself adopted a dignified stance, the LMA were hard-hitting, publically calling United “unprofessional” with reference to the extensive leaked reports confirming Moyes’ departure even before he was told.4

The LMA’s statement is perhaps indicative of where, beyond his agreed termination payment, the battle lines were drawn in pay-off negotiations between Moyes and United.

 

“Leaks”

When news surfaced that Moyes was going to be dismissed, United’s response was not to deny it but simply “no comment”5.

Around the same time, details also leaked out of alleged player discord. Apparently United substitutes had placed bets on how long Moyes would last in his job and, during the 2-0 defeat to Olympiakos, suggested he should be sent off as United would be “better off without him”6. He was mocked for reading self-help books7. Relationships with senior players, such as Rio Ferdinand, Robin Van Persie and Ryan Giggs, were questioned8. One of United’s younger star players, Danny Welbeck, even wanted to leave9.

 

Reputational damage

The significance of those “leaks” in legal terms is their impact on Moyes’ reputation and his consequent ability to find another job at a similar level within football.

Moyes would have been able to argue that United breached the trust and confidence owed to him by acting in a manner which has now given rise to a poor reputation10.

The “leaks” go further than a manager who failed to secure European football for United, they arguably showed a manager who was unable to motivate and lead world-class players.

Those apparent failings could make Moyes’ return to top-level football, at least in the short term, even harder. We all remember Steve McClaren having to resurrect his career in Holland after his sacking from the England post when the national team did not qualify for Euro 2008.

The issue of reputational, or stigma, damages to a former manager has arisen previously in legal argument. Kevin Keegan sought an award on that basis when he sued Newcastle United. He failed with that aspect of his claim since he accepted in evidence that the publication of the decision vindicating his resignation would restore his reputation. In any event, the Premier League Manager’s Arbitration Tribunal said that an award of reputational damages to him would be “very little11.

 

Commercial reality

With the Manchester United Supports Trust already criticising United’s handling of the situation12, Moyes’ sacking gives all indications of being a PR disaster.

Even if reputational damage in pure legal terms would amount to very little, the commercial and marketing reality of the situation is rather different. United will not have wanted to fight this out in public, revealing where and from whom the “leaks” came.

This put Moyes and his legal team in a strong position to argue for additional compensation to reflect his damaged reputation in excess of his £4.5 million contractual entitlement. 

His position would be that United’s handling of the situation will keep him out of a similarly well-paid job for years – even if that does not actually turn out to be the case in reality.

Accounting for income from a new managerial role in the meantime, the difference in salary between the sums paid to Moyes at United and a salary in a new role may well be millions of pounds. Given the amounts at stake, therefore, it would be surprising if the “leaks” were not used to Moyes’ financial advantage in pay-off negotiations.


The Sports Group at Littleton Chambers, which is recognised by the leading legal directories, has advised and represented managers and/or clubs in the majority of the high-profile manager terminations over recent years.  Members of Littleton have advised and appeared before the League Managers’ Arbitration Tribunal and Employment Tribunal, including in some of the cases mentioned in this article. For more information contact  or follow @Littleton 1 and the Head of the Sports Law Group @JohnMehrzadLaw

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About the Author

John Mehrzad

John Mehrzad

John is recognised as a leading barrister specialised in employment, commercial and sports law, practising from Littleton Chambers where he is the Head of the Sports Law Group.

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