Since You Asked: Trading away your AFL club's future?

Expert

29th April, 2015

1756 Reads

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Ryan Buckland

Expert

29th April, 2015

1756 Reads

According to a report in yesterday’s Herald Sun newspaper and online, the AFL is considering allowing clubs to trade away future draft picks, in a similar manner to most US sports.

We asked The Roar’s favourite economist to break this down for us.

The drive to free up player movement in the AFL just got a little more interesting, huh?
Absolutely!

According to a report in yesterday’s Herald Sun, there is a growing sense within Club Land in the AFL that the League will consider allowing clubs to trade future draft picks when considering the way they structure their lists.

It’s not a new idea. In fact, it’s been on the AFL’s agenda for a number of months, and probably longer.

This would be quite a radical step, and from my point of view would be a way to move further towards accelerating the equalisation drive the AFL has been embarking on for the past couple of years. More so than the introduction of a soft cap on football department spending, and more than free agency.

It’s certainly been a focus in recent years. So what’s the state of play now?
Right now, during the “trade period”, which runs for about two and a half weeks in October, teams are free to swap picks for the current trade period with other teams, for other picks or for players.

The article in the Herald Sun suggests that this restriction on teams only being allowed to trade current picks is set to be removed, and teams given the ability to offer the right to picks in future years for consideration in the current year.

Really? How would that work?
So rather than saying: I’ll trade you pick 23 in this year’s draft for Luke Shuey (overs!!), I can now say I’ll trade you pick 23 and Melbourne’s 2016 first round pick for Luke Shuey (double overs!!).

I need another example…
Well, say you’re a side that seems to perennially finish around the middle of the table. You’ve had the same coach for close to six years, and have built a list with very good top end talent but is middling to below average outside of the top five or six players.

You want to play like the league’s best, but don’t have the players that let you do so.

I think I know who you’re talking about.
Now now. We aren’t here to talk about particular teams. We’re in the world of hypotheticals.

Right…
Anyway, so in that situation, you’d like to try and build up your depth at the top as quickly as possible, to make a run at the top four or even for the flag. Free agency hasn’t quite worked out for you to this point, nor has trading for depth players that other sides have largely discarded.

There’s only so much you can do, right? Well, under this proposal, you would be able to double down on where your list is at and use your future assets to help build your side to where you think it can be in the short term.

That sounds great. But a deal has two sides.
Or three. Or four. Or five.

So what does it matter then?
Okay let’s introduce another hypothetical. Say you’re a team that’s just coming off one of the most successful eras in the history of the AFL. You won three premierships in the space of five years, off the back of a couple of incredible draft years, strong development and smart tactics on and off the field.

But the AFL’s inevitable growth and decline cycle is sucking you in, fast. Star players of yesteryear are getting injured more frequently, or are coming off the bench.

I think I know who you’re talking about here, too.
Hush. This is all hypothetical.

Continue.
Right so you are resigned to moving down the ladder and into a rebuild. But it will take a number of years, because there’s only so many moves you can make. Your veteran players will hang on, and the young players you have coming on that aren’t quite up to scratch will be biding time until you next strike gold.

You’ve just described how every offseason in the AFL has unfolded, ever. I thought we were talking hypotheticals?
I’m getting there.

So under this scenario, there’s a chance that Team Two might entertain a trade with Team One – maybe a first round pick and a second round pick from Team One to be traded for a player outside of the top 10 or 12 from Team Two.

That helps meet the needs of both sides, for sure. Now, let’s add the ability to trade future first round picks to this equation.

I’m listening…
Right so now, Team One, who remember thinks they are very close to contending for a flag, can offer Team Two its first round pick for this year and for next year, in exchange for a player.

All of a sudden, Team Two might be a bit less averse to trading out one of its higher calibre players, because it means they are drafting higher in the draft, more often.

And Team One doesn’t mind giving up its first pick in the draft both in the current year and next, because the player they receive will help them out with their most pressing needs.

I see what you mean! So rather than hindering equalisation, it actually allows for clubs to accelerate their push for the pinnacle, while also helping sides on the down swing.
Yeah exactly. I mean, there’s some risks and challenges.

There’s always a catch, isn’t there?
One of the risks is that a team throws away its future, and consigns itself to a hard landing if its strategy busts.

I’ll bring in an international example to illustrate this, even if its an old one.

So this rule has been in place in the NBA in the US for some time. In the 1980s, the owner of the Cleveland Cavaliers traded away a whole bunch of current and future draft picks for players who were pretty average. This led to a period of immense hardship for the franchise, as they lost all ability to bring in new, young talent.

I can see how that would be an issue.
Yeah absolutely. There are massive incentives for the current generation of club administrators to effectively mortgage their team’s future with a hope of winning it all in a short period of time.

Fortunately there’s a relatively simple and elegant solution. Cleveland’s woes saw the NBA introduce the ‘Stepien Rule’, which says NBA teams must have a first round draft pick every second year.

That, plus the NBA Head Office has the power to veto trades that it believes are against the best interests of the broader competition – as it famously used in disallowing a trade between New Orleans and the LA Lakers in 2011.

Are there any other issues?
I mean there’s nothing stopping clubs from making stupid mistakes, so if you think the quality of your team’s administration isn’t up to valuing current and future assets then I guess that’s a risk. But otherwise, I reckon the AFL is on to a winner here.

Really? There’s no other issues at play here?
Well I guess we can talk about the empowerment of players, the devaluing of contracts, the AFL’s next enterprise bargaining agreement, longer draftee contracts, more TV money, a higher salary cap…

You know what, that all sounds really interesting, but I think we’ll leave it there…
But I…

Thanks for your time.

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Ryan Buckland

Expert

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.