How Much Do Football Clubs Spend On Managers?

When it comes to football clubs’ rising costs and financial challenges, the focus is often on players’ transfer sums and wages. Yet, there are also other staff costs, including that of the coaching staff. Although generally a fraction of the total wages, governing bodies include it in their evaluation of clubs’ finances.

So, how much do clubs pay their managers? How has this evolved over time? And with manager turnover high at times, what are the financial implications for clubs?

How much do coaches earn?

Like player wages, there exists variance between manager salaries. Factors such as quality, experience, achievements, availability, and which club is hiring, determine how much a coach earns.

Although contract details are often not public, rumored salaries give an indication of the size and disparity. Currently, the highest earner amongst club coaches is Atlético Madrid’s Diego Simeone. The Argentinian reportedly earns £29.9 million per season at the Metropolitano. Appointed in December 2011, Simeone is the longest sitting manager of the Big Five leagues with 12 years.

The second highest earner is Pep Guardiola. The Manchester City coach extended his contract in November 2022 until the end of the 2024-25 season, earning a reported annual base salary of £20 million.

While Liverpool manager Jürgen Klopp reportedly earns £15.7 million annually. Which puts him in third place.

Long period and successes

These managers are at the high end of the salary scale for a reason. All three have been in charge for a considerable period and have led their teams to major successes. Klopp has overseen the Reds since October 2015 and won, amongst others, the 2018-19 Champions League and 2019-20 Premier League. Guardiola won five Premier Leagues since taking over in 2016 and won the treble during the 2022-23 season. While Simeone has gone head-to-head with Spain’s powerhouses Real Madrid and Barcelona on a smaller budget. Winning two La Liga titles, two Europa Leagues and reaching two Champions League finals during his 12-year reign.

Juventus’ Massimiliano Allegri and Real Madrid’s Carlo Ancelotti earn £11.3 and £11 million respectively.

Premier League Top Six managers

Mikel Arteta took charge of Arsenal in December of 2019. In his first job as head coach, the Spaniard reportedly earned £6 million annually. He has led Arsenal to a FA Cup win in 2019-20, qualification for the Champions League and a strong 2022-23 season where they came up just short to Manchester City.

In April of 2022, the Spaniard signed a new contract, with his salary reportedly increasing by £2.3 million (38 percent) to £8.3 million.

Less than other Top Six managers like Jürgen Klopp and Pep Guardiola, but still significant.

Manager salaries of Premier League Top Six in 2023-24

Bonusses

Like with player contracts, managers often have performance related bonusses stipulated in their contracts. Pep Guardiola supposedly earned up to £750,000 from winning the treble with City, which he then divided amongst employees.

At the lower end of the table similar constructions are in place. When Everton appointed Sean Dyche in January of 2023, he had to lead the club to safety. Everton, one of six clubs to have played in every Premier League season since its commencement in 1992-92, avoided relegation by two points. Dyche earned a reported bonus of £3 to £3.5 million on top of his £5 million annual salary.

National team coaches

For national team coaches, salaries vary widely as well. When England manager Gareth Southgate took charge of the national team, he reportedly earned £1.8 million annually. After a fourth place at the 2018 FIFA World Cup and the UEFA EURO 2020 final, the FA boosted his contract to just over £5 million in 2021.

However, Roberto Mancini reportedly earns $25 million (around £20 million) as head coach of the Saudi Arabian national team. Mancini left his post at the Italian national team after winning the 2020 European Championship and failing to qualify for the 2022 World Cup. The former Manchester City-manager denied the lucrative contract offer from the Middle East caused him to quit. The switch has increased his annual salary significantly though. As Mancini’s contract with the Italian FA was reportedly worth €2 or €3 million ($2.3 – 3.45 million) annually.

New Germany head coach Julian Nagelsmann earns around €400,000 per month. His contract, currently set to finish after the 2024 European Championship in Germany, is worth significantly less than what he earned at Bayern and was still entitled to after being dismissed.

The difference with the women’s game is also apparent. Sarina Wiegman, who managed the England women to a European Championship and World Cup final, earns £400,000 (around €463,000) annually. A bit more than Nagelsmann earns per month and less than what Southgate earns monthly for managing the English men.

Premier League highest wages

Many factors determine salaries, including the league. Amongst the Big Five European competitions the average wage costs of the Premier League is the highest. In the 2021-22 season, the average wages of Premier League clubs were €215 million. 80 percent more than the €119 million average wages of La Liga clubs.

Although the bulk is spent on players’ wages, a part is reserved for coaches. And generally, Premier League coaches earn more than their Big Five leagues’ counterparts. Mainly caused by the Premier League clubs generating a higher revenue and thus having more budget to spend on players and staff.

Percentage spent on manager

Due to the variances in clubs’ salaries and wage costs, the fraction of total wages spent on the manager differs as well.

Guardiola’s annual salary of £20 million is 5.7 percent of Manchester City’s £353.9 million 2021-22 employee costs. While Liverpool spends around 4.3 percent of its total wage expenditures (2021-22: £366.1) on manager Klopp.

With 3.9 percent (compared to the £212.3 million of 2021-22 staff costs), a similar percentage is paid by Arsenal to Arteta.

Erik ten Hag’s salary of £9 million covers around 2.3 percent of United’s spending on employee expenses in 2021-22 (the season prior to Ten Hag’s arrival). Which is less than what Arsenal, Liverpool and City spent on their manager compared to total wage costs.

Manager salary compared to total wage costs

Players out earning managers

The bulk of clubs’ employee benefit expenses go to the football staff and especially to the players. It is not uncommon though for star players to earn more than their manager.

Arteta’s reported £8.3 million annual salary, for example, is lower than eight of his players. Guardiola currently earns around the same as City’s two highest paid players Kevin De Bruyne and Erling Haaland. While reported values suggest nine players earn more than United’s Erik ten Hag.

Disparity in player wages occasionally leads to unrest within the dressing room. Yet, player wages compared to a manager’s is a less debated topic.

Former United manager Sir Alex Ferguson notes in one of his books, how he signed a contract in 2010 ensuring he would earn more than any of his players. With rising transfer sums and wages, it is no longer always feasible for clubs to pay their manager more than star players. This could possibly lead to hierarchical challenges.

Increase of managerial salaries over time

Over time, average managerial salaries have increased, as well as that of the top earners. In 2012, José Mourinho was the highest earner amongst coaches with Real Madrid paying him a reported €14.8 million (around £12 million). Carlo Ancelotti (£11 million at PSG), Pep Guardiola (£7.7 million at Barcelona), and Arsène Wenger (£7.3 million at Arsenal) were other high earners at the time. Guus Hiddink earned €8.6 million (around £7.0 million) managing Russian side Anzhi Makhachkala.

In 2017, the top earner was Marcello Lippi with £18 million annually for managing the Chinese national team. 50 percent more than top-earner Mourinho earned five seasons earlier. During that period China invested heavily in football, and so several of the top earners were active in the far east. Apart from Lippi, André Villas-Boas managed Shanghai SIPG for an annual salary of £11 million.

By 2023, the highest earner Simeone (almost £30 million) earns 2.5 times more than Mourinho did over a decade earlier. And two third more than the highest earner in 2017.

Transfer fees for managers

Apart from salaries, clubs also need to pay more to acquire managers than in the past. In line with the football market’s general tendency of rising costs.

In the summer of 2021, Bayern Munich paid a record €20 million (around £21.7 million) to Red Bull Leipzig for manager Julian Nagelsmann. An amount that could rise to €25 million based on performances. It was Bayern’s second highest incoming transfer that summer, behind Dayot Upamecano for €42.5 million. The French defender also switched from Leipzig, just as the only other transfer the club paid a fee for that summer, Marcel Sabitzer (for €15 million).

Excluding fees for other staff, Nagelsmann thus made up at least 25 percent of Bayern’s transfer spending (€77.5 million) during the 2021 summer window.

The 33-time Bundesliga champions parted ways with the manager after 84 matches in March of 2023. While still being active in three competitions, the club replaced him with Thomas Tuchel.

Another major transfer fee was paid by Chelsea for Graham Potter in September of 2022. Despite paying a reported £20 million to Brighton and Hove Albion, Potter could not kick-start the team and Chelsea dismissed the Englishman before the end of the season. He took charge of just 31 matches. Just nine less than the 40 matches André Vilas-Boas managed during the 2011-12 season. A manager the Blues paid a reported £13.3 million for to Porto.

In 2010, Real Madrid paid Inter a reported £6.9 million to bring in José Mourinho. The Portuguese had just won the treble with Inter the season prior.

High transfer fees for managers

Impact of transfer fee

For clubs like Real Madrid, Bayern Munich, and Chelsea these amounts are generally just a fraction of their total budget. However, for smaller clubs a high transfer fee (or compensation fee) can have a bigger impact on their budget.

In 2019, Celtic received £9 million as compensation from Leicester City for Brendan Rodgers. Celtic had a total revenue of £83.4 million in 2018-19. So, the compensation fee equaled almost 11 percent of their total revenue. While Leicester City had £150 million in wage expenses that season, so the compensation was around six percent of their wage expenses.

This year, Celtic once again saw their manager with an ongoing contract switch to the Premier League. This time, Tottenham reportedly paid almost £5 million to take over the services of Ange Postecoglou. A similar amount was paid to buy out the contracts of Ronald Koeman (switching from Southampton to Everton in 2016), Maurizio Sarri (Napoli to Chelsea in 2018), and Brendan Rodgers (Swansea to Liverpool in 2012).

Compensation packages after dismissal

The fees are relatively small compared to what clubs pay for some players and overall. With Premier League clubs spending £2.36 billion on player transfer fees during the 2023 summer transfer window. However, there is a rising trend, especially considering that some managers, like Potter, are dismissed again after a short period in charge.

In addition to the transfer fee, clubs then must pay the remainder of a manager’s contract, or any other compensation amount agreed upon (generally taking effect after two seasons). Everton’s Dyche supposedly included a compensation clause into his contract that requires the club to pay out his whole contract in full in case of dismissal.

In case a dismissed manager, entitled to his full salary over the length of his contract starts a new job, this could mean cost savings for the former club. Tottenham, for example, likely saved £9 million when José Mourinho started managing AS Roma in 2021. While Julian Nagelsmann’s appointment to the German national team has saved Bayern Munich millions as well.

High manager turnover

Despite these high transfer sums and compensation fees, manager turnover is high. Since the 2010-11 season, there have been at least four Premier League clubs each season who have changed managers. Including interim managers, the least number of different coaches in a Premier League season was 24 during the 2020-21 season.

The highest number was in 2022-23, when 39 different managers oversaw a team on matchday. Moreover, there were 11 clubs who changed manager, more than during any other season since 2010. In 2013-14, 10 clubs changed manager, while that was nine in 2017-18 and 2021-22.

Coach turnover Premier League regulars since 2010-11

Seven clubs have played non-stop in the Premier League since the 2010-11 season. The traditional Top Six and Everton. Of those seven, only Manchester City has not played in all Premier League seasons since the league’s commencement in 1992-93.

The coach turnover during this period for these clubs varies greatly. Some clubs have found stability. Like Liverpool, Manchester City and Arsenal, who have had four different coaches each.

Roy Hodgson led Liverpool at the start of the 2010-11 season, before Kenny Dalglish took over in January 2011. In 2012, a period of over three seasons started in which the Reds were managed by Brendan Rodgers. In October 2015, current manager Jürgen Klopp took over.

While Arsenal was managed by Arsène Wenger since 1996. The club thought Unai Emery was the ideal replacement in 2018, but the Spaniard was dismissed during his second season. After an interim coach, current manager Mikel Arteta was appointed in December 2019.

Manchester City appointed success coach Guardiola in the summer of 2016. Since 2010, the club had had three different managers: Roberto Mancini, interim coach Brian Kidd, and Manuel Pellegrini.

High turnover for other top teams

Chelsea (14), Everton (11), Spurs (10), and United (nine) have had significantly more managers since 2010. Mostly because of results being below expectations and not finding the right fit. Sometimes it is also a matter of patience, as changing managers does not necessarily improve results. Early in Arteta’s tenure, there were calls for his dismissal as well, but the club kept faith in him and performance improved.

Cost of coach turnover

During the 2021-22 season, nine clubs had at least two different coaches managing the first team. Burnley dismissed Sean Dyche after almost 10 seasons and 425 matches in charge. While Leeds United parted ways with Marcelo Bielsa, who helped the club gain promotion in 2019-20.

Manchester United dismissed Ole Gunnar Solskjaer in November 2021. After Michael Carrick oversaw the Red Devils for three matches, the club appointed Ralf Rangnick on a temporary basis until the end of the season. The turnover of the first team management and coaching staff cost United £23.8 million. Which amounted to 5.8 percent of total 2021-22 wage expenditures of £408 million (without these expenses, wage cost amounted to £384.1 million).

Everton spent around £10.5 million on dismissing Rafael Benítez in January of 2022. Which came down to 6.1 percent of their total wage costs (£172.5 million) that season. After a match led by interim manager Duncan Ferguson, Frank Lampard took over the Toffees.

While three coaches managed Watford during their 2021-22 campaign in which they got relegated: Xisco Muñoz, Claudio Ranieri, and Roy Hodgson. The club spent £7.8 million on changes to their coaching staff, which made up nine percent of their £86.8 million in total wage costs.

So, while United spent the most on changing their technical staff compared to Everton and Watford, relative to total wage expenditure they spent the least. For Watford, the management changes had a bigger relative impact on their costs.

Curbing spending

Yet despite the costs, clubs are willing to spend money in compensation packages and transfer sums to attract a new coach and accompanying staff, if results are not up to expectations. This is caused by a desire for on-field success. The same reason why clubs spent more and more on players’ transfer fees and wages.

The difference between players and managers, however, is that clubs can only register (contract) new players during a league’s summer and winter transfer window, while managers can be dismissed and contracted at any time. Therefore, changing the manager is the only change the owners can implement mid-season to cause a difference. For example, in a bid to avoid relegation or to secure a European ticket.

Increased spending for players and managers, has led to new regulations and restrictions by governing bodies. In 2011, UEFA implemented financial regulations to better govern and secure the financial health of European football. In 2023, they added the squad cost rule as part of their financial sustainability regulations. The rule is gradually implemented and limits clubs’ spending on player and coach wages, transfer, and agent fees to 70 percent of a club’s revenue (2023-24: 90%, 2024-25: 80%, 2025-26: 70%).

Spending a lot on dismissing a manager, while research is unclear whether this improves long-term results, may therefore become less attractive for clubs as it will limit their spending on for example new players. While research does show a relative strong relationship between wage spend and performance, especially at the top of the Premier League.

So, although just a fraction of total wages, the cost associated with appointing, retaining, and dismissing a manager have risen in a similar way as player costs have. Clubs seem willing to pay more for the right coach, yet it is not always clear what that is exactly. Just as not all player transfers are right on target.