I'd probably take it myself. Go and play in the VFL full time and try to impress an AFL club from there (while being fully paid), which is pretty much what you'd be doing any way on the Melbourne list. I guess you don't have the benefit of AFL level training though.
I'd try to negotiate a rookie spot maybe.
But I guess if they start playing in the development league, tell him he's not wanted around the place, and offer him an extra $50k on top of next years salary to walk, he would need to consider it.