Trænerkontrakter i den danske Superliga: Anvendelsen af tidsbestemte, frem for tidsubestemte, kontrakter og deres efficiens

Stefan Emil Søltoft

Student thesis: Master thesis

Abstract

Time determinate contracts are customary, when hiring coaches in the Danish league of football, the “Superligaen”. This is different from rest of the Danish business world, including other groups of salaried employees covered by the Danish law the “Funktionærloven”. Among these groups, mostly indeterminate contracts are used. This thesis analyses, why time determinate contracts are preferred by clubs and coaches, and whether this is Pareto-efficient or not. In order to analyse the contractual parties’ choice, the thesis sets three hypotheses. Considering the question of efficiency, the Coase-theoreme is assumed, just as mutual compensation, between club and coach. To understand the motives, which are crucial when signing and terminating a contract, interviews have been conducted. The most important differences between the two types of contracts are especially termination, protection against firing by sign-off fee, and the coach’s risk of human capital loss. Time determinate contracts provide the coach a higher protection against firing than indeterminate contracts. To analyse this, a parallel to CEO’s golden parachutes is drawn. This parallel helps to clarify if it is an efficient risk allocation, and whether time determinate contracts fit the principle of efficient breach of contract. Besides that the parties’ risk aversion and potential moral hazard behaviour are defined. It is stated that hiring on time determinate contracts signals a strong contractual bond, associated with loyalty and trust. This supports the coach in his daily work and relieves pressure from the Media. Time determinate contracts have a decreasing protection, unlike the indeterminate contracts. This is an advantage when hiring a football coach because they need protection to a higher extent in the early course of a contract. This is a result of the fact that implementing a game concept and structuring the squad, takes time. Just as in the English and German league, the scape goat-syndrome can occur in the “Superligaen”, but different from those it cannot be categorized as a problem at the moment. The high protection of the coach implemented in time determinate contracts prevents this. On the time of agreement, the Sports Director commits himself not to cause scape goating later in the period and as compensation to that, the coach is willing to accept a lower salary. As stated above, the three hypotheses list a number of reasons why the time determinate contract is preferred to the indeterminate contract. Furthermore it is concluded that the time terminated contract is proved to be an expression of principle of efficient breach of contract, efficient risk allocation and successfully preventing moral hazard behaviour by both parties. This improves that it is the Paretoefficient contract, and that the Coase-theorem is current

EducationsMSc in Commercial Law, (Graduate Programme) Final Thesis
LanguageDanish
Publication date2011
Number of pages83