Why this year’s quieter AFL trade period is a sign of things to come

Ryan Buckland Columnist

By , Ryan Buckland is a Roar Expert

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    As of close of business Tuesday, just ten transactions have been finalised in this AFL trade period. That’s down from 15 at the same stage last season. Why did this year, which promised plenty of wheeling and dealing, peter out to nothing special?

    It’s not just the low volume of deals in 2017, it’s the relatively modest impact. Some big names remain on the board – Bryce Gibbs (is maybe available) and Jake Stringer – but for the most part this year has been all about the incremental improvement of a handful of clubs at the fringes of their lists.

    The biggest deal has been, and probably will be, Jake Lever’s long-telegraphed move to Melbourne for a sizeable bounty.

    It seems likely 2017 will go down as one of the quietest trade periods in the post-expansion era. That title is currently held by the 2014 offseason, where five free agents shifted clubs and 19 other trades took place. 2015 and 2016 saw significantly more volatility; four free agents and 37 trades in the former, and four free agents and 39 trades in the latter.

    We will go nowhere near that mark in 2017. As best as I can tell, about ten players remain on the board, with little to no prospect of a flurry of pick-swap deals as we had grown accustomed to seeing in the past few seasons.

    Volume and value are related in this equation; their relative decline from recent years is driven by the same handful of features of the AFL landscape. It could also be the noise of recent seasons coming home to roost, as clubs feel content with where their list positions.

    But there are some elements of the league which are likely to have bed down this offseason that will colour the trade period for the next few years at least.

    Tired of the outsize volume of noise, relative to real trade action? Get used to it, because the flurries of years past are unlikely to materialise again soon.

    Oh cap space, my cap space
    Where salary cap space was relatively easy to come by in years past, it is now difficult to manufacture.

    This is because of the frankly silly way the league and its players decided to manage the new broadcast agreement bounty and its impact on the salary cap.

    Instead of doing something sensible, like smoothing the circa 25 per cent increase in total player payments over a few years, HQ and the AFL Players Association decided to hand it over in virtually one hit. A 20 per cent increase in one year, followed by piddling, not-even-inflation increases for the five years thereafter.

    Not only that, the delay to finalising the collective bargaining agreement meant the one year spike occurred in the past. The 20 per cent increase was payable in the 2017 football year, meaning it was notionally available to clubs and players to exploit as a means of player movement in last year’s offseason.

    It goes some way to explaining how the league set a player movement record last offseason. The AFL had told its clubs to operate under the assumption that they’d have an extra ten per cent to spend on players in the 2017 season – or about $1.1 million. Every club doing proper due diligence would have anticipated an additional increase in later years.

    That we ended up in a situation where last year’s working assumption was just half of the actual increase, and that it essentially became a one-time-only offer of bulk, league-wide cap space, meant the immediate impact was largely confined to last year’s offseason. That was made sure by a clause many clubs reportedly offered their players, where they would receive an automatic increase in their base payment and match fees in line with whatever the new salary cap looked like in 2017.

    Based on the trade period to date, it appears some clubs handled the spike better than others.

    Port Adelaide has been able to add three highly rated best 22 players in a single year, without trading much the other way. Indeed, Fairfax Media reported the Power were one of the few clubs who did not afford their players an automatic pay increase in line with the CBA. Essendon has also been busy, aided by the fact a few (likely) pricey veterans left the club to create some extra room.

    By contrast, it appears many teams used the spike as a means of keeping players. This year’s free agency pool was significantly diminished by the time we hit the window. Big fish like Nat Fyfe and Dustin Martin re-signed with their clubs on big-money deals. It was the same for many out-of-contract players or near-out-of-contract players; Josh Kelly re-signing for two years with the Giants, for example.

    Players with an expiring contract in 2018 that were not re-upped in the stupor of this year’s cap spike would seem like reasonable candidates to test the market next season. Clubs will have had the financial wherewithal to pay them their market value, but did not for some reason. But that’s another story for another time.

    Coming into the year, with an expired CBA and expectations of a salary cap bonanza, there was a piece a week penned with a quote from someone within the football diaspora lamenting the looming “bloodbath” of torn up contracts and unprecedented player movement. It did not materialise, because the league and its players – correctly or incorrectly, I’m not quite sure – inflated the salary cap in a way that ultimately muted its impact.

    The salary cap is set to increase by just 8.7 per cent over the next five years (1.7 per cent per annum), the longest period of low growth since the league records begin. The surging salary cap, which appears to have played a role in last year’s record off season movement, will not happen again until nearly the middle of the next decade.

    It will be up to clubs using the relatively new salary cap banking mechanism, whereby they can save up five per cent of the total player payment cap in one year to spend in the next three years, to create the same kind of cap space clubs had access to in 2016.

    Nat Fyfe Fremantle Dockers AFL 2015

    Liquidity crunch
    The cap boom came a year after the league permitted clubs to trade future picks for the first time. This opened up a whole new world of opportunities, increasing the currency clubs had available to facilitate deals by an estimated 50 per cent (it didn’t double, as clubs can only choose to trade their future first round pick or future second and subsequent round picks).

    Clubs took advantage. In 2015, four deals involved future picks. In 2016, that exploded to a dozen, or close to a third of transactions. This season, five of the ten transactions to date have involved a future pick, but none have involved a future first round pick.

    The lack of future first round pick trading would appear driven by the prevailing view the 2018 draft looms as much stronger than the 2017 class. I’m not sure any current year draft class is ever called ‘strong’, but this feels different. That fact alone has probably reduced the liquidity of the player exchange market; no one wants to deal out of the chance to take someone near the top of next year’s draft.

    The draft pick liquidity crunch has a secondary source: a real lack of academy or father-son prospects. Where in recent years the northern clubs have sought the crypto-currency AFL Draft Value Index points to pay for their academy prospects, there appears to be no real desire in 2017.

    Ditto the father-son system, with Richmond’s Patrick Naish the only progeny considered a likely bid candidate. The Tigers have the later picks to cobble together a bid match-up to a pick in the late 20s, and can go into deficit next season if a bid comes between their own first round pick (17) and the bid threshold.

    It means there is simply less liquidity in the system, less opportunity for clubs to make mutually beneficial deals with non-conflicting priorities.

    The parity party
    A final theory for the lacklustre exchange period is the broader meta-game of the league, in two ways.

    First, 2017 produced what is almost certainly the most even season in the post-expansion era. There were no outright awful teams, even as we moved into the typical time of year clubs look to make decisions that improve their chances of winning in the future, and the top eight was in flux for almost the entire season. For almost every club, there was a time where it looked as though a cheeky run at finals was on.

    That’s unlikely to change next season. The lack of manoeuvring may suggest the majority are relatively happy with the state of their playing list. Absent Port Adelaide and Essendon, one would struggle to think of a club that has made win-now moves to bolster the core of their playing group. Most of the change has been at the margin.

    Marginal improvement is the new black – or yellow and black as it were. The Tigers’ 2017 season, as we have discussed, extolled the virtue of keeping calm and carrying on. If Richmond, the club whose average head coach tenure between 1980 and 2017 was 57 games, can take a sensible approach to managing their team with a steady hand, then everyone can.

    The Tigers were also able to cobble together a premiership standard list – we’re working on actual data here people – with medium term, incremental improvement around an established core group of pedigreed veterans. Most teams in the league have an opportunity to replicate that high-level model, just in different ways.

    Dustin Martin Richmond Tigers AFL Grand Final 2017

    A sign of things to come
    Some of these factors are temporary. The northern clubs will seek Draft Value Index points again in the future, and help pump some liquidity into the system. At some point, clubs that haven’t been able to make the leap from good to great will bow to the traditional pressure to blow it up and rebuild from the ground up. A club will be banking phat salary cap space as we speak – looking at you, North Melbourne – and launch a daring raid on a high-profile player or players in a year or two.

    But some factors are not temporary. The AFL’s new landscape will be a substantial handbrake on the ability of most clubs to work their way into substantial salary cap space to make win-now moves as Port Adelaide has done this season, and other clubs have done in the past. This will be one of the dominant rules of the league’s economy, at least until the midterm collective bargaining agreement review in 2020.

    What impact will Richmond’s administrative stability have? It’s more questionable, as we’ve seen from many clubs’ recent administrative shenanigans. The most recent to join the club was Carlton, who parted ways with football lifer Steven Trigg just three years into a term as CEO. They have also appointed favourite son Chris Judd to their board.

    Some things will never change. For the frenzied two-week player exchange period, it looks more likely than not that the bonanzas of the past two seasons were an aberration. It appears we’ll return to more normal trading conditions, like those we experienced in the pre-expansion era.

    The solution? If there needs to be one, surely it is doing away with the AFL’s insistence on cramming an entire off season’s worth of list building into a 13-day window, five months out from the first centre bounce of the season.

    Ryan Buckland
    Ryan Buckland

    As an economist, Ryan seeks to fix the world's economic troubles one graph at a time. As a sports fan, he's always looking one or two layers beneath the surface to search for meaning, on and off the field. You can follow Ryan here.

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