As a businessman with a background in human capital advisory, coupled with a passion for sport, I am continually bemused by the sustained whinging surrounding free agency.
AFL – akin to other professional sports around the world – is a business, despite what Eddie McGuire believes.
“It should not be a business. We have become very business-oriented,” McGuire said back in August.
Say what you want Eddie, however when you sell jumpers for up to $130, it’s hard to see where you’re coming from.
The AFL is a huge business. Eddie knows that, I know that; the players, coaches, officials and fans all appreciate that. David Koch described the AFL in the same press conference as, “a billion dollar industry”.
The AFL on its website in February this year disclosed that the number of players earning $600,000 a year has transcended from 26 in 2012 to 41 in 2014, with 33 percent of the league’s 729 players earning more than $300,000. Additionally, five players were members of the millionaire’s club.
In August, Geelong coach Chris Scott in called for the ‘distasteful’ free agency to be scrapped in The Age.
As a fervent fan of the NBA and NFL, I understand the employment of and feel strongly for free agency, as well as the introduction of an in-season trade period, of which I wrote about in 2012 on The Roar. The latter is a debate for another time.
Much of the discussion on the topic of free agency has been that the strong teams will augment their arsenal while the weaker clubs will continue a downward slide. Simply arguing the aforementioned is short-sighted.
I hold the same view as the AFL Players’ Association CEO, Paul Marsh.
“The fear expressed by some clubs seems to be based on the view that free agents will look to leave weaker teams to join stronger teams because of the greater chance of success,” he was quoted in The Age.
“I find it interesting that so little of the debate is focused on why the gap exists between the stronger and weaker teams in the first place and what the industry should do to fix this fundamental problem.
“Would the fear of players leaving the weaker clubs be there if the gap between top and bottom was sustainably marginal rather than substantial? It is my genuine belief that free agency will showcase the need, and drive the change, for competitive balance in the game.”
As like most industries in business, disruption is at the fore. Free agency is the disruptive cloud in the billion dollar industry. Instead of whinging about players leaving one club in a quest of greater playing time, a new environment, a realistic chance to compete for premiership glory or purely for more money, clubs need to look in-house and analyse what’s wrong with the business.
The business appears to be a boys club with a merry-go-round of staff, and more importantly, there seems to be a clear lack of innovation and strategic thinking.
I agree with Chris Scott in that, “it [free agency] had a place in the game” however disagree strongly that a restriction should be placed on players based on the number of years they’ve been in the league. Scott said, “That’s the concern, that a club will invest five big years and develop him then lose him”. Chris, that’s business.
Melbourne is presently experiencing the free agency issue with defender James Frawley.
Demons CEO Peter Jackson remarked that the situation is an example of “the problem of free agency”. Jackson was referring to a player – in this case Frawley – leaving a lowly ranked club for another, higher positioned, one.
The 25-year old, who debuted for Melbourne in 2007, has pulled on the guernsey in 139 games. During that time, Melbourne have finished 14th (3 wins), 16th (5 wins), 16th (4 wins), 12th (8 wins), 13th (8 wins), 16th (4 wins), 17th (2 wins) and 17th this season (4 wins).
So I ask, what is wrong with the 2010 All-Australian seeking a change? Think about if we had restrictions on moving to pursue career opportunities in our owns jobs.
Free agency (without the restrictions) is a good thing for the game and is a great wake-up call for all clubs. Let’s stop the persistent whining.
Monstrous
Guest
Eddie is a deflector - when asked why the Pies fans didn't turn up last Friday he claimed it was AFL fixturing - so he didn't want to play Friday night>>>???
Ian Whitchurch
Guest
Gene, Very few players eligible for the Veterans Allowance were also worth top-end salaries, so the effective amount of cap enabled by it wasnt that high. On the other hand, Geelong's structure was to have a relatively large group of just-below-elite players all earning ~500k, thus maximising the amount of effective cap room the then-current Veterans List rules allowed. It was magnificent cap management.
Cat
Roar Guru
As I said a maximum of 2 @ 50% ... adding further players just reduced the percentage item 15: http://www.aflplayers.com.au/wp-content/uploads/2014/09/CBA-2012-2016-FINAL.pdf
Ian Whitchurch
Guest
http://www.afl.com.au/staticfile/AFL%20Tenant/AFL/Files/Images/collective_bargaining_agreement_2007_2011.pdf Check 13.3
Davico
Guest
How many times does it need to be said that Buddy approached the Swans? Also that Hawthorn and GWS offered him more per season than the swans? Do you think that just because he played for one team that he must pay servitude to that club for the rest of his career? That's a slippery slope. The fact is that players have a limited career in the sport and need to do what's best for themselves and their families. Anyone who say's otherwise is living in fantasy land and can come work for me under the conditions they are suggesting. I train you, you now work solely for me until your career in this industry ends!!!
Davico
Guest
Agreed Gene. Only thing I might question is that most US contracts are quite long term and also is it possible to send some of the lesser players sometimes used as trade bait in the US to places they may not wish to go in the AFL system? I have no idea, so genuine question if you know the answer.
Cat
Roar Guru
yes the old rules allowed a MAXIMUM of 2 Veterans @ 50%.
Ian Whitchurch
Guest
Gene, Old rules vs new rules. You'll find Geelong's totoal player payment numbers were pretty impressive. It was an excellent use of the rules, and I congratulate them.
Cat
Roar Guru
You got that mostly wrong Ian, The allowance – which allows clubs to pay 10-year players $118,380 outside the salary cap Last season, the veterans' allowance was cut to a fixed amount per veteran but clubs can now list all of their 10-year players as veterans. Up until the end of 2011, the rule allowed clubs to list just two veterans under the rule but were able to pay half their salary outside the cap. Some clubs were still paying players under that rule – as they were allowed to – last season. This year, Geelong boasts six veterans, which will enable it to pay its players an additional $710,280 above the salary cap this season. By comparison, Collingwood has two veterans. ^ from an article last April
Ian Whitchurch
Guest
Note under the AFL's 'no rules' salary cap, you have unlimited freedom to move money back and forward in time. Port Adelaide did this with Boak, and retaining him was one of the things that set the club up for their recovery.
Ian Whitchurch
Guest
Aransan, Regarding Geelong, if you read the small print in the AFL's salary rules, you'll see that until recently players with 9 years at one club had half their payment off-cap. Geelong had a lot of these players, and you'll note once the rules changed they began to move them on. The Alaistair Lynch deal is the way you deal with talls that take a while to develop.
Aransan
Guest
Radelaide, the market value of players at a bottom club will be significantly less than 95% of the salary cap regardless of what the players are being paid. Each year a number of players come out of contract, the trick is to get rid of those being most overpaid or renegotiate their contracts downwards. That plus the 5% shortfall will give you the money to buy in a player who will fill in a hole for you. Note that you can't build a top team around a number of players being paid over the odds.
Radelaide
Guest
With the salary cap floor at 95% of the total it would make it hard for a bottom club to find the big money to offer 1 or 2 players without having to get rid of a whole heap since they are paying only at the most $500,000 shy of the total, certainly there are some bugs that need to be ironed out.
Cat
Roar Guru
very small sample size so far, but yes, the current half baked system the AFL has implemented will continue to benefit the 'top clubs' more so than the bottom ones.
TomC
Roar Guru
So far it appears to be a mechanism for moving talent and ability from lower ranking teams to top ranking teams. It appears to contradict the spirit of equalisation, and make it easier for teams at the top of the ladder to remain there. My understanding was that it was intended to give experienced players more freedom to take more lucrative offers and set themselves up for life, or move themselves and their family to the location of their choice, at least if that option was available. What appears to actually be happening is that players are using it to chase premierships. Perfectly understandable, but not very good for the competiition.
Aransan
Guest
Ian, to be successful a club needs to be paying a number of players under their market value. Most successful players would prefer to stay at one club and many would be prepared to take somewhat less than market value -- after all what would they lose in tax anyway? Even taking that into account a team successful over a period will have players who have increased their value to the point that the club can no longer keep them and stay under the salary cap. On the other hand there will be clubs prepared to pay way over market value to fill a particular hole in their team and there are players happy to capitalise on that, I don't think loyalty comes into this. A club might be so fixated on mid-fielders that they neglect to develop taller players who take more time, rather than drafting tall young players and spending 5 years developing them they will attempt to seduce them from another club that has put in the development. That doesn't strike me as being fair and has nothing to do with loyalty from the club that has put in the development. Gold Coast and GWS are somewhat different with the draft concessions that they received, as the market value of their players increase with experience and development they will have to let a number of their talented players go. Geelong have to be admired for the way in which they have managed to keep so many players over a number of years while paying them under market rates.
Lazza
Guest
So what’s the solution? Prevent players from moving and increasing their salaries until someone decides to take it to court? I haven’t heard one lawyer who thinks the system would survive a court challenge. Then you’ll have a complete free for all.
Ian Whitchurch
Guest
Aransan, The solution is to re-contract early and often. Loyalty cuts both ways.
Lroy
Guest
The AFL rakes in more money year after year... but where does that money end up?? In the pockets of administrators wearing $2000 Italians suits thats where. I read something the other day about 5 retired NRL players who spent ten years at the top. All of them carry long term injuries, cannot run at all, kick a footy ect with their kids. Im sure AFL players suffer the same. Is it not reasonable, that a man who only has a limited shelf life, can earn as much as he can while he can? Who would begrudge these spartans getting what they can while they can? Its not the players fault your club is poorly run, has no members, cannot attract crowds or sponsorship. So why should they be prevented from earning what is rightfully theirs?? All this stuff about "poor clubs going to the wall" is tosh. West Ham United still bounce up and down from top league the same as they did for the last 50 years.. but they still are in business. As it stands.. the main people benefiting from the AFL's cash coffers are administrators working for the AFL. What is the current CEO being paid and how many AFL games did he play?? I rest my case ;-)
Bosk
Roar Rookie
I got the impression from your article you're a lot more devoted to business than you are to sport. There's no shortage of ways to make money these days pal. Do we really need to transform a sport that's basically a religion in Melbourne, one that's united and divided families for generations, into purely a moneymaking exercise so that the greedy AFL execs can cream off multi-million dollar bonuses while soulless fatcats like Kerry Stokes rake in billions from the ad revenue? Well perhaps that's a moot point seeing as it's already happened, but can you really blame fans for wringing their hands when they see Free Agency eroding the loyalty of their cherished heroes? Go ask one of the thousands of Hawk-supporting kids with #23 on their jumper how they feel about Free Agency.