Reports suggest that Chelsea Football Club have lost their legal battle against former manager Antonio Conte and are being allegedly ordered to pay £9m in compensation by an arbitration tribunal. This has taken the club’s spend on compensation to former managers to the £90m mark.

Conte was sacked last summer with less than a month to go before the new Premier League season began. He believes this timing had a negative impact on his ability to get another managerial job. He also had a year remaining on his contract and believed he was entitled to be paid for the remaining time.

On the other hand, Chelsea were angered by Conte’s attitude and conduct during his last year in charge which saw a number of high profile fallings out with players. One in particular being Diego Costa, who ultimately went on strike, refusing to play for the club. He was then sold to Atletico Madrid for what the club believe to be less than market value because of what had occurred at Chelsea. As a result, the club refused to pay Conte for the year remaining on his contract.

The case was taken to an arbitration tribunal where it has now been reported the ruling went in favour of Antonio Conte. While Chelsea could challenge the decision in the High Court, they have allegedly decided instead to draw a line under it and allow both parties to move on instead.

If reports are to be believed, this latest payout takes the club’s total compensation payments passed the £90m mark since Roman Abramovich took over in 2003. In that time, Chelsea have had no less than eleven managers.

In today’s football world, managers are experiencing increasingly shorter tenures than their predecessors in times gone by. This can be perhaps put down to the expectation for success being higher than ever for many clubs, which leads to the dismissal of managers when it is felt the club could be doing better.

Compensation relating to football managers can be paid by clubs for a couple of reasons:

  • If the club wishes to appoint a manager from another club who is still under contract they must agree a compensation fee with the club from which the manager will be leaving.

  • If a club decides to sack their manager before the end of their contract, a compensation fee will be agreed which often takes into account how many years were left on the contract (unless a clause has been included in the manager’s contract which states they can be sacked for ‘underachieving’)

In both of these scenarios, it is deemed that a breach of contract has occurred and therefore, compensation is due to the affected party, whether that be the club or the manager.

Compensation payments to sacked managers in the Premier League alone have exceeded £130 million in just the last four seasons.

While the compensation given out by Chelsea, ranging from £5.2m to £23.1m, could very well be pocket money for the likes of Abramovich, other owners will be looking at the terms and conditions of their manager’s contracts very carefully over the next few years in order to avoid costly payouts when they part company with a manager or seek a new one.

If you are looking for legal advice on the drafting of employment or sports contracts, or for advice on contract disputes, contact Farleys whose experienced team can provide support and information tailored to your situation. Call 0845 287 0939 or email us.