Isaac
Years ago

AFL advised that salary cap and draft not enough

The AFL's research and advice from the major sporting leagues of the US is suggesting that their salary cap and draft is not enough to encourage parity.

But as the AFL notes, the premiership race is being increasingly influenced along EPL lines of the "haves" and "have nots", the American architects of the salary cap and draft have told Australian football's leaders to find new triggers for equality.

"The salary cap and draft won't do it all," said Thomas.

"In fact, over time, it will accentuate the problem (of the rich clubs commanding the premiership race).
"Big clubs like the Boston Red Sox understand they have to tip $80 million into Major League Baseball's revenue sharing pool to even the competition.

"They accept an even competition adds value to each club - that the games are more compelling to the fans if they are not sure of the result before a game starts."
Full article at Paywall Ltd

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Anonymous  
Years ago

*NH:

Reply #431237 | Report this post


Benno  
Years ago

I know people pretty high up in some afl clubs and both clubs sent people over to the US, to learn from NFL clubs about free agency and the systems they use!

Reply #431248 | Report this post


Anonymous  
Years ago

they should just introduce a points system for players and take away almost a full quarter of game play then we can all pretend the comp has parity between teams

Reply #431251 | Report this post


Anonymous  
Years ago

I like the USA leagues and how they have a shared revenue system. It adds to the value of the leagues and ensures relative stability for franchises. It will be interesting to see if the AFL adopts a similar model. I personally think that 50% of the revenue generated by the league (including clubs) should be shared amongst the 18 clubs. The rest of it is for keeps.

Reply #431256 | Report this post


Isaac  
Years ago

*NH:
Actually, I think this is of direct interest to any NBL fan as clubs look to become more financially stable, and potentially consider the future of the points cap.

Other sports have considered similar caps and an alternative like partial revenue equalisation could be one alternative.

I've mentioned before the concept of combining a luxury tax with the points cap as it would give richer clubs an option to load up with a very tangible cost and way of sharing that money with smaller teams. It would also isolate the issue of team strength (players themselves) from other revenue.

Reply #431262 | Report this post


Libertine  
Years ago

problem is the AFL is not run strictly on a franchise / franchisee model ala American sports.

the Melbourne clubs are all membership-based associations, for a start.

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Anonymous  
Years ago

In that case, remove the "NH:" from the bake-off thread at the bottom of the page. It's probably best practice to do so.

Reply #431278 | Report this post


KET  
Years ago

Anon just read the title and make an educated guess, it's not that much of an issue.

Reply #431298 | Report this post


HO  
Years ago

#431256

"I personally think that 50% of the revenue generated by the league (including clubs) should be shared amongst the 18 clubs."

Interesting viewpoint and not a bad idea.

The problem with Australian versus US sports is where does the league finish and the sport start?

An example would be the revenue from NAB. You can cutely say that the NAB (Auskick) money is all about grassroots but the Auskick deal alone, never mind draft and rising star, is complex.

Why are NAB in Auskick? For the grassroots program - sure. For the ability to activate at AFL games - sure. For the association with Australia's biggest sporting brand - sure.

Then do that exercise against dozens of deals the AFL has. Calculating the league revenue would be incredibly complex, and stakeholders in the sport would be screaming for more of their share of the cash all the time. The Auskick department would be saying - "but we generate the product that gets the sponsorship so give us all the NAB money" - onversely, the league department would be saying "but you only get that cash because we build the brand".... and on and on.

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Anonymous  
Years ago

HO, you make some great points. At the very least, 50% of revenue generated by the clubs need to be shared equally. Like the US leagues as well, if I were the AFL, I would be looking at standardising the uniforms and trying to get an exclusive supplier which will create more parity in the league too.

Reply #431350 | Report this post


Isaac  
Years ago

HO, does a soft cap and luxury tax (or similar scenarios) solve this?

Does the AFL currently have a hard cap?

Reply #431360 | Report this post


HO  
Years ago

I suspect Isaac that the luxury tax type initiatives are what the US guys are talking about, beyond the draft and hard-cap.

My view is that the AFL currently has a hard cap, with some wrinkles, including the cost of living stuff for Sydney for example.

The interesting thing for AFL is that football department spending, as much as player salaries, is now seen as a major determinant of ongoing success. FD spending has boomed in the big clubs recently.

My guess is that equalisation for AFL has to factor this in as well - the luxury tax scenario might focus on this first.

I also suspect that they will look at some form of supporter/ticketing rationalisation formula around the uneven fixture - they would already know for example the benefit to Melbourne of playing Richmond, Collingwood, Carlton, Essendon, Hawthorn for example as opposed to a Melbourne home draw dominated by games against Port, GC, GWS, WB etc.

They will move to ensure all teams are paying 100% of cap, as a minimum, and the AFL meeting that. Suspect the lions' call for that help this morning is based on knowing this is a likely outcome.

Reply #431374 | Report this post


Bear  
Years ago

Relating this back to the NBL, are we looking at the richer clubs giving back more of a % of their profits to the league to distribute evenly so we don't lose clubs for financial reasons?

This would be a bonus for the competition, but worries me if the same 'poor clubs' so to speak, don't improve year in year out...

Seems the way to go though!

Reply #431401 | Report this post


Isaac  
Years ago

I think it would allow a team like Perth to spend up and entertain their huge crowd, while allowing the Hawks or Taipans to remain financial (and hopefully thus competitive) on more of a budget.

Soft cap (with enforcement) and luxury tax could help. The idea of a points cap where richer teams could "buy" extra points from clubs not using theirs might work.

Reply #431409 | Report this post


DL  
Years ago

The problem with sharing REVENUE is that it doesnt take into account the COSTS associated with generating the REVENUE.

For example for Perth to generate its revenue which would be far greater than say Woolongong revenue, it would cost them significantly more to rent the Arena, advertise and pay for entertainment etc.

So you would really want to look at a PROFIT share arrangement, but then the smart teams would find ways to direct expenditure into other areas, such as fitness training, support staff etc etc (ala tax minimisation)to bring down the on paper profit.

Sports like the AFL have the luxury of mega millions of dollars TV broadcast payments, its easier to divide that kind of Revenue rather than game ticket and club generated Revenue.

Reply #431411 | Report this post




 

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