This problem is very specific to football clubs: the tournament model means that at particlar points in the “ability-outcome” curve, a small increase in the squad’s skill might produce a discontinuously sharp increase in the club’s fortunes. The sharpest such point lies at promotion/relegation to either the Champions’ League or the Premiership itself. If as a player you get to occupy that point, then you get to capture a lot of that uplift. It might be rational for a club to pay an extra £2m to a player if they think it increases the chances of getting into a league worth £50m by 5% or so.

So not necessarily incompetence, though I bet Chelsea would benefit hugely from reading all this. It is just the footballers have a unique ability to monopolise a skill, the high value of which is largely a matter of the industry structure. They should be taxed, but trying to cap transfer fees or salaries would just produce flight and evasion.

let’s move onto executives.

Chelsea etc think that their top people are worth that money to them but they are wrong. It is only the fact of their common incompetence that keeps the salaries (and transfer fees) so high. Premiership pay is just another bubble.

See?
Terry demands £60m deal
Terry secures world-beating £35m contract
Roman Abramovich clears Chelsea debt
Latest figures show Premier League clubs owe £3.1bn

Crazy.

Are people going to pay to watch John Terry tap a ball about on his own week-after-week? How is he going to make big money unless he has access to TV revenues?

Or is there something other than just John Terry that brings in the fans?

Now consider what his never having existed would have done for the fortunes of his club – would you like to calculate the resultant reduction in today’s ticket price? The word infinitesimal comes to mind.

You have fallen for a very simplistic illusion.

I’m not as clear about your insanity as you seem to be about mine. In the course of a few blog posts, you now seem to latch on to the 500:1 ratio…rather than the 226:1…would 50:1 be okay? Or 100:1…or 25:1????

I think that to Chelsea FC, John Terry is worth 500 times the salary of the tea lady (at least).

I don’t even see why this would even be controversial.

I have yet to meet many Chelsea fans paying £80 a ticket who are doing so because they like the tea lady. I don’t think the Chelsea megastore sell many “Tea Lady” shirts – but they do sell thousands of Terry shirts. At a neat profit of c. £35 a pop.

This doesn’t make John Terry a more worthy human being than the tea lady. But it does make him worth at least 500 times what she is to Chelsea FC. And it’s a little quirky – possibly even verging on insane – to argue otherwise.

Redistributive liberalism – the least worst option. I’ll just go off and write it on a placard.

So, in my dull, non-moral way of seeing things, people get paid a varying factor of their “I’d rather not work” level of wages according to whether they do something scarce (head the ball 30 yards), monopolisable (Tube drivers IMHO), or that enables them to steal/demage their company (bankers. And tube drivers, again). Most are “fair” in a narrow sense: the negotiations are non-coerced at the point of signing the contract.

Football is still an interesting case: Steven Leavitt in Freakonomics calls them “tournament” models of pay, I think: he found that the footsoldiers in retail distribution of crack industry were paid very little, for quite a lot of risk (no sh1t sherlock), but were motivated by the small % chance of getting top dog position. Hence for every Tiger Woods there are 10000 golfing professionals teaching fat divorcees how to pitch and put in some county course. Perhaps, on average, footballers are paid not much; how it is then divided within the industry is a different matter.

I keep hitting the same conclusions: pay should be expected to be highly variable, it is seldom because of outright robbery/, quangos will not fix it, redistributive taxation is the least-worst solution.