AFL calls for supporter feedback on the draft.

[Malibu#27]

I'd prefer that anyone able to put on the veterans list, should also be able to be a free agent.

I said the same thing - if you are able to be vet listed then you could be a free agent. It would give the players club a chance to match any financial offer because they would only have to list a percentage of it under the salary cap, while the club trying to attract the player would not be able to.

 

[RussellEbertHandball]

I think it would be interesting to see the comparison between the sports and their income and expense streams as I'm sure the money the AFL receives for it's broadcasting would be pretty small in comparison to the major soccer leagues.

It would be minute compared to say what the premier league gets, but it would be interesting to compare what % of their respective incomes is actually going to the players.

I didn't think the difference would be that big but it would be interesting to see the average from all clubs as Collingwood have had the most income out of AFL clubs for a number of years now.

I would think it would be closer to 40% which is still below the soccer clubs but it's a lot better than what it was 10-15 years ago…. it would be interesting to look at what % increase the average player in each comp has received over that time period as I'm guessing the AFL increase would be at least on par with soccer in that regard and players will continue to enjoy healthy pay increases in coming years.

When I read this on the weekend I thought I would do some research before I go with what I could remember. My research confirms my original thoughts.

AFL
The AFL Players Association started getting tough with their 1998 CBA negotiations, and by the time the 9/10/foxtel rights deal was signed they stated their aim was for the players to receive 25% of all revenue generated by the game. Brendon Gale said that the players were receiving about 22 to 23% of revenue when the new TV rights were awarded and stated it was the AFLPA's aim to increase the players return.

This percentage will drop because the increase in Total Player Payments as announced in August will only increase by about 27% by the 5th year (TPP 2011 $131.38m ($8.21m/club) - 2007 $110.85m ($6.93/club) on a 2006 base of $103.6m ($6.47m/club). However over the next 5 years the players will receive a base TPP of $611.25m as opposed to $518m if the 2006 TPP was paid for next 5 years. The TV rights went from $500m to $780 and when you take out contras it's still around 50% increase and other revenue streams of the AFL will also increase faster than salary increase.

The AFL received $203m in revenue in 2005 and in it’s Next Generation document it states how it will spend $1.4bil it expects to earn over the 5 year period 2007-2011. So it’s revenue streams will outpace player base TPPs. What the clubs will do, who knows, but the AFL have covered the increases in TPP. In 2005 all distributions to clubs total $91.96m. Over the next 5 years they expect to distribute $650m to the clubs, be it, base, additional, special, other, prize money and strategic partnership distributions.

So trying to work out some figures for the AFL, I looked at what happened in 2005.
2005 AFL Annual Report

Finance & Administration section
Revenues $203.7m (• Sponsorship and broadcasting –$113.3 million (up $6.8 million))
Operating Expenses $69.4m
Distributions $128.7m
Interest $3.8m
Net Surplus $1.7m

The AFL’s distributions grew by $6.4 million
to $128.7 million, an increase of 5.2 per cent. In 2005, AFL distributions comprised:
• Payments to clubs –
$92 million (up $2.4 million)
• Payments to AFLPA –
$7.8 million (up $0.1 million)
• Game development grants –
$19 million (up $0.5 million)
• Ground Improvements –
$5.1 million (no change)
• Facilities Development Reserve –
$3 million (up $1.5 million)

Payments to clubs grew by $2.4 million to $92 million, an increase of 2.7 per cent, and have more than doubled since 1999. In 2005, they comprised:• Base distribution – $68.3 million• Other payments – $23.7 million (Other payments include prizemoney, finals allowances, ground buy-out agreements, annual special distributions, AFL club membership support packages.)

From the Football Operations section

[B]Gross player payments[/B]			              	[B]110,960,485[/B]					
Finals/relocation, living and other allowances		2,096,184
Development allowances					1,291,500
Veterans’ allowance 50% deduction			5,326,653
Other deductions					   338,705

Total deductions					9,053,042

Player payments less deductions			        101,907,443
Injury allowance					4,708,517
Gross player payments less injury allowance		97,198,926

TPP LIMIT					        100,800,000

Gross player payments less injury allowance		97,198,926
Margin/(excess)					         3,601,074

[B]Additional Services Agreements (ASAs)[/B]		         [B]6,071,450[/B]
Average gross					Listed
player earnings					$187,251
(including					Played
ASAs)					$213,952

From the AFL's 2005 Club Financial Review

This power point presentation provides a review of the 16 clubs 2005 financial results. Unfortunately it doesn’t name the clubs in the graphs so it lacks full disclosure. From the slides the following info is revealed

Aggregate club revenue $415.9 million - Average per club $25.99 million
AFL sourced revenue $5.281m ie x 16 = $84.50m. I don’t know where the other $7.5m the AFL distributed to the clubs is included.

Aggregate club expenses $405.3 million - Average $25.9 million
Remuneration expenses $7,774m ie x 16 = $124.38m.

Remuneration includes all associated on-costs (such as superannuation, workcover, payroll tax etc.) This suggests on-costs of $7.3mil which seems a bit low if insurance and payroll taxes and other costs included. I think the CBA might cover insurance premiums in the TPP. Super is part of TPP, so if it’s just payroll taxes then it looks about right.

Therefore as a rough guide
Player remuneration $117.03m TPP plus allowances plus ASA’s
Club revenue $415.99m
% Salary of club revenue = 28.13%

Player remuneration $117.03
Club + AFL revenue $527.69 (415.99+203.7-92)
% Salary of industry revenue = 22.18%

I think the $7.5m difference is due to the AFL providing for the distribution in their accounts, and the clubs only accounting for it when it is received. I checked Port’s distribution of $4.875m and saw that in it’s accounts it showed $4.802m.

If that’s the case the percentage of salary to revenues decreases to 27.63% and 21.86% respectively.

From the slides we can see that club turnover varied from almost $40m to just under $20m in 2005. When Sydney announced their 2005 profit they said their turnover was almost $28m and in an article in July last year, about clubs negotiations for increased distributions from new TV monies, it said Sydney in 2005 spent a record $9.368m on player payments, therefore around 1/3 of revenue. I’m not sure if this includes the ASA’s payments or not. This was $1.8mil above the average club spend.

Year	TPP 	club % Inc
1991	22.50	1.50	
1992	24.00	1.60	6.7%
1993	26.20	1.75	[U]9.2%[/U]
1994	27.70	1.85	5.7%
1995	36.80	2.30	[B]32.9%[/B]
1996	40.00	2.50	8.7%
1997	46.40	2.90	[B]16.0%[/B]
1998	52.40	3.28	[B]12.9%[/B]
1999	68.00	4.25	[B]29.8%[/B]
2000	76.00	4.75	[B]11.8%[/B]
2001	83.00	5.19	[U]9.2%[/U]
2002	89.00	5.56	7.2%
2003	95.00	5.94	6.7%
2004	97.80	6.12	2.9%
2005	100.80	6.30	3.1%
2006	103.60	6.47	2.8%
2007	110.85	6.93	7.0%
2008	118.72	7.42	7.1%
2009	123.12	7.70	3.7%
2010	127.18	7.95	3.3%
2011	131.38	8.21	3.3%

CRICKET

When Tim May took over the Australian Cricketers Association and forced Cricket Australia to open their books, he also stated the aim was that players would receive 25% of total revenue. The figure I remember being achieved on the first deal was about 23%. It’s hard to work cricket out as different state associations have different assets and revenue streams and Cricket Australia don’t publish figures including keeping the TV rights value with Channel 9 a commercial secret.

NORTH AMERICAN SPORTS

When the National Hockey League players went on strike and eventually caused the 2004-05 season to be abandoned because of salary disputes between players and owners, I remember reading reports that NHL salaries were 75% of revenues and the other 3 North American sports, NFL, NBA and MLB paid their players between 60% to 65% of total revenues. So I researched this history.

NATIONAL HOCKEY LEAGUE - NHL

2004-05 NHL lockout

Issues
The NHL, led by Commissioner Gary Bettman, attempted to convince players to accept a salary structure linking player salaries to league revenues, guaranteeing the clubs what the league called cost certainty. According to an NHL-commissioned report prepared by former U.S. Securities and Exchange Commission chairman Arthur Levitt, prior to 2004-05, NHL clubs spent about 76 percent of their gross revenues on players' salaries – a figure far higher than those in other North American sports – and collectively lost 273 million dollars ($US) during the 2002-03 season

Confirmation of these facts I found for the next season at
http://www.andrewsstarspage.com/NHL-Business/03-04revenue-expense.htm

2003-04 League Revenues & Player Expenses
Total Hockey-Related Revenues $2,082.5
Total player costs $1,511.3
Total operating costs $795.3
Player and operating costs $2306.6
Revenues minus costs (224.1)

The individual clubs reported combined profits of over $100mil at the end of the 2005-06 season after the wages were cut and the lock out finished. Average Salaries paid changed a bit as a result of the new deal
2002-03 $1,790,209
2003-04 $1,830,126
2004-05 Lockout
2005-06 $1,460,000

There’s lot of info about Salary’s and revenues etc at
http://www.andrewsstarspage.com/NHL-Business/index.htm


This page explains how the new revenue sharing part of the new CBA works in the NHL.
http://proicehockey.about.com/od/thenewnhl/a/salary_cap_expl.htm

The Salary Cap
· The salary cap is set at $39 million per team in 2005-06. There is also a floor, with each team required to spend at least $21.5 million on player salaries in 2005-06. The cap figure covers salaries and bonuses.
· The salary cap is defined as the amount of real money a team pays out in a single season.
· Clubs are not permitted to exceed the mamximum or drop below the minimum. But a team can exceed the cap to replace a player with a long-term injury (a minimum of 24 days and 10 games).
· When the injured player is reactivated, the team must get back under the cap.

· The 2005-06 cap is based on projected NHL revenues of just under $1.8 billion for the season. In future years, the players are guaranteed 54 percent of "hockey-related" revenues, with the salary cap adjusted each year to meet that figure. The players' share increases if revenues rise. They get 55 percent when NHL revenues hit $2.2 billion, 56 percent at $2.4 billion, and 57 percent at $2.7 billion.

[Due to better-than-expected revenues in 2005-06, the cap was raised to $44 million and the minimum amount will be $28 million, which is up from $21.5 million. for the 2006-07 NHL season. also see http://www3.telus.net/public/dreyes/nhl/ for 2006-07 season teams and how they perform against the cap.]

Individual Salary Restrictions · Performance bonuses can be earned by the following players only:
- players on entry-level contracts
- veteran players (400 or more games) signing one-year contracts. after returning from long-term injuries (100 or more days on injured reserve in their most recent year).
- players who sign a one-year contract after the age of 35.
· No player can earn more than 20 percent of the team salary cap. In 2005-06, that means a maximum individual salary of about $7.4-$7.8 million.
· Contracts can be bought out for two-thirds of the remaining value for players over the age of 26, and one-third of the remaining value for players under 26. Players who are bought out cannot return to the old team for at least one year.
· When a player aged 35 or older signs a multi-year contract, his average salary is counted against the team's salary cap during every year of the contract, even if the player retires before the contract is up.
· The minimum player salary rises from to $450,000, and will continue to rise until reaching $525,000 in 2011-12.The previous minimum salary was $180,000.

NFL
The NFL is considered to have a hard cap which is a little tougher than the NHL which is also considered a hard cap.

Salary cap
The salary cap is defined as the maximum amount that a team may spend on player compensation, (see above) for all of its players combined. Unlike other leagues, for example the NBA (which permits certain exemptions) or Major League Baseball (which has a "soft cap" enforced by "luxury taxes"), the NFL has a "hard cap:" an amount no team under any circumstances may exceed.
The NFL salary cap is calculated by a formula. It is defined by the current CBA to be 59.5% of the total projected league revenue for the upcoming year. This number, divided by the number of teams, determines an individual teams maximum salary cap. For 2006, this is approximately $102 million per team. For 2007, it is projected that this will rise to $109 million.[14]

This page gives some pretty good answers to questions about the cap.
http://askthecommish.com/salarycap/faq.asp

Question 1.1
How much does each team have to spend against the NFL Salary Cap?
Answer: In 2005, it was set at $85.5 Million. Last year it was originally set to be approximately $94.5 Million. However, an extension to the CBA brought with it a new formula, which saw an expansion to approximately $102 Million. The cap in 2007 is set to be $109 Million.

Question 1.2
How is the NFL Salary Cap determined?

Answer:The Cap is determined through a complicated calculation system, which has changed with the latest extension of the CBA. The Cap is based on income that the teams earn during a League Year. Originally that "pot" was limited to what was known as Defined Gross Revenues (DGR), which consisted of the money earned from the national televison contract, ticket sales, and NFL merchandise sales. Under the new agreement the "pot" has been expanded to include total revenue. Thus, other sources of revenue, including such other items as naming rights and local advertising, have been added. As was the case with the original DGR, the expanded revenue is divided equally amongst all 32 teams for purposes of claculating the salary cap. For all of you nerds out there, here is the actual mathematical calculation:

Projected revenue x CBA Percentage = Players Share Total Revenue

Players Share minus Projected League wide Benefits = Amount Available for Player Salaries

Amount Available for Player Salaries / Number of Teams = Unadjusted Salary Cap per TeamUnder the old DGR model, the CBA Percentages were as follows:

1998-2001 63%
2002 64%
2003 64.25%
2004 64.75%
2005 65.5%
2006 64.5%
2007 Uncapped Year


However, when the model was changed and the DGR expanded, the players and owners agreed to a smaller set percentage of the larger pot. The $102 M figure in 2006 was based on a 57% share of the 2006 projected Total Revenues as was the $109 M figure for 2007. In 2008, the percentage jumps to 57.5%, and the same percentage applies to 2009 as well. In 2010 and 2011 the percentage will be 58%. Note that if the projections see a shortfall in 2006 or 2007, when the dollar amounts were hard-coded in the CBA, then the 2008 and 2009 caps will be adjusted accordingly. Note: The actual dollar amount of the Salary Cap can not be less than the actual dollar amount of any Salary Cap for the preceding year. So, for example, if Total Revenues should decline from one year to the next, the players are protected against a smaller associated Salary Cap. However, the Projected Benefits, plus the amount of the Salary Cap multiplied by the number of Teams in the NFL, can not exceed 61.68% of Projected Total Revenues.


NBA

"Soft" vs. "Hard" Caps

Unlike the NFL and NHL, the NBA features a so-called "soft" cap, meaning that there are several significant exceptions that allow teams to exceed the salary cap to sign players. This is done to allow teams to keep their own players, which, in theory, fosters fan support in each individual city.

There are so many exceptions to the cap that I won’t list them and let you read them.

http://www.insidehoops.com/nbasalaries.shtml
July 12, 2006: The NBA salary cap for 2006-07 is officially $53.135 million. The mid-level exception is $5.215 million for the 2006-07 season and the minimum team salary, which is set at 75% of the Salary Cap, is $39.85 million.

But if you look down this page you will see salaries varied from $103 mil to $23mil in the 2004-05 season. That’s because of all the exceptions mentioned above. It’s a very very soft cap.

http://www.insidehoops.com/nba-salary-cap.shtml
This page lists the history of the cap values.

http://www.insidehoops.com/nba-collective-bargaining-agreement.shtml

· A. Salary Cap ·
The Salary Cap for the 2005-06 season is $49.5 million (which is based on 49.5% of Basketball Related Income).
· In the new deal, the salary cap increases from 48% of BRI currently to 49.5% of BRI in 2005-06 and 51% of BRI for the remainder of the CBA.

B. Annual Increases and Decreases
The permissible year-to-year increases in multi-year player contracts are as follows:
· Bird and Early Bird Contracts may increase by up to 10.5% of year-one salary (down from 12.5%).
· Other contracts may increase by up to 8% of year-one salary (down from 10%).

A. Escrow Level
· The escrow level will be 57% (same as the 2004-05 season). This percentage will be guaranteed to the players, so that if total player costs before deducting escrow monies from the players are less than 57% of BRI, the difference will be paid by the league to the players.

· B. Tax ·
A team tax trigger will be set at 61% of BRI (the league-wide tax trigger for 2004-05 was 63.3%). The tax will be in effect each season, and will apply to any team with a payroll that exceeds the tax trigger. The tax trigger for each season will be established before the season based on a projection of BRI. For the 2005-06 season, the tax level is set at $61.7 million.

MBL - Major League Baseball

MBL don’t have a salary cap but have a luxury tax to try to control
Luxury Tax in Major League Baseball

Major League Baseball has instead implemented the so-called luxury tax, an arrangement by which teams whose aggregate payroll exceeds a certain figure (annually revised) must pay into a pool designed to help the less affluent teams pay higher salaries. However, critics point out that the luxury tax has had little effect on maintaining competitive balance and on overspending by affluent teams. For the 2004 season, only the New York Yankees, Boston Red Sox and Anaheim Angels paid any luxury tax; such teams had superstar players whose yearly salary was close to the entire payroll of weaker clubs. Despite this fact, teams have been able to compete with low payrolls. The Florida Marlins contended for a playoff spot in 2006 with a payroll less than what Yankees 3rd Baseman Alex Rodriguez was paid, and the Oakland Athletics went to the ALCS in the same season despite a low payroll.

I haven't been able to dig up specific figures but MBL is around 60% like the other 3 sports. They don't have the TV rights deals across the board to ensure it can outpace the others.

Edit: This page mlb4.com wiki pages has links to plenty of different articles including revenues, salaries, luxurt tax, revenue sharing

The big difference with Australian sports and North American sports and the big soccer teams of Europe can be summed up into 2 areas. Firstly private owners, and secondly development of the game.

When you have private owners they are their to make money so the players take the same attitude and want their share. In Australia the major codes spend a higher % of their revenues to develop the game than their o's counterparts. In the US the administration of the professional leagues don't spend anywhere near what Australian bodies do in administering and running the whole game across all levels. College football for example has several teams that have home attendances of 100,000+ per game.

A similar story happens in Europe but varies slightly across leagues and the fact that there are so many leagues below the major one.

 

[Crow-mo]

sorry to be picky, after such an excellent post. but your conclusions are not necessarily as simple as that.

When you have private owners they are their to make money so the players take the same attitude and want their share.

particularly in europe, it's called the free market economy. where players and owners strike a free and unimpeded bargain.

In Australia the major codes spend a higher % of their revenues to develop the game than their o's counterparts.

actually that's an assumption based to a large degree on how much money doesn't go the players. or at least, the implication that game benefits from the extra cash is assumed. I'm not sure anyone really knows the tru benefits here.

In the US the administration of the professional leagues don't spend anywhere near what Australian bodies do in administering and running the whole game across all levels. College football for example has several teams that have home attendances of 100,000+ per game.

College football is the largest, richest sport in America. much has been made of the exploitation and corruption within the NCAA programs. not such a good example.

A similar story happens in Europe but varies slightly across leagues and the fact that there are so many leagues below the major one.

really, what you're saying - and I can understand your point - is that there is a lot of money left over after paying the players, it must be good for the game. we can't make that statement. not least of all, because you have made an assumption about the obligations of the highest level of professional sports to every level below - and how well these are carried out. not sure it's that clear cut.

 

[RussellEbertHandball]

sorry to be picky, after such an excellent post. but your conclusions are not necessarily as simple as that.

I admit my conclusions are relatively simple as I got sick of re reading such a long post and wanted to keep the ending short, but I stand by the two basic reasons for the difference. In particular private ownership, the size of the markets in North America and Europe and the economies of scale will be an important difference as to why Australian sports stars playing in Australian leagues will not get close to 50% of revenues as their salary base for a long, long time.

particularly in europe, it's called the free market economy. where players and owners strike a free and unimpeded bargain

Basically what I meant without saying it specifically. No major European league can put on a salary cap on without the others major leagues doing so and not suffering loss of players to the uncapped leagues. If the SANFL had put a salary cap on the in the 70's or early 80's we would have seen a faster exodus of players to Victoria. The Champions League, TV money etc has seen big clubs (G14 in particular) leap ahead of the rest and salaries have followed.

actually that's an assumption based to a large degree on how much money doesn't go the players. or at least, the implication that game benefits from the extra cash is assumed. I'm not sure anyone really knows the tru benefits here.

Yes this is an assumption on my part but it's based on observation as well as talking to friends in other countries about what their professional league does for game development. The fact that Australia is split in 2, with Aussie Rules and Rugby League, will see the AFL spend more rescources developing the game at grass roots in the non traditional markets than their o's counterparts. Ice Hockey would be similar to Aussie Rules, ie traditionally not played everywhere, but from what my mates in Canada tell me, the NHL relatively don't do as much work as the AFL at the grass roots level in these non traditional areas. The NHL and the other leagues don't co-ordinate the equivalent of, Aus-kick, and to the same extent as the AFL does with assistance of the state leagues. Aus-kick is the AFL's baby it loves to promote it, quote the participation numbers etc. School footy has suffered and as the AFL can't really control it, it pours it's rescources into Aus-kick.

College football is the largest, richest sport in America. much has been made of the exploitation and corruption within the NCAA programs. not such a good example.

What I was getting at here is that the NFL don't have to work with College administrators to develop the game like the AFL does with the SANFL or WAFL or VFL or AFLQ, AFLNSW, AFLNT etc. The AFL funds development officers, gives grants to these state bodies, invests money in their stadiums etc. As you pointed out, College Football is so big, the NFL doesn't have to share it's rescources with them. Crikey, Standford Uni hosted the Superbowl in 1985. I can't see my old team Adelaide Uni hosting the AFL grand final one day.

really, what you're saying - and I can understand your point - is that there is a lot of money left over after paying the players, it must be good for the game. we can't make that statement. not least of all, because you have made an assumption about the obligations of the highest level of professional sports to every level below - and how well these are carried out. not sure it's that clear cut.

I admit that this is anecdotal as I haven't seen all the figures from all the leagues etc. I suspect that as soccer is so big in Europe and doesn't have many other sports to compete against it for rescources, a lot of development is done by schools, semi professional associations, private academy's coaching etc. This would be interesting data to get hold of.

 

[Crow-mo]

Interesting.

if i get a chance, I will reply in more detail tomorrow.

one thing though, European sports don't have a salary cap as this would be illegal under euopean law. in this sense, soccer is the most, if not only, free market sports industry in the world.

 

[Count Zero]

NFL
The NFL is considered to have a hard cap which is a little tougher than the NHL which is also considered a hard cap.

Fantastic post REH. I will be bookmarking this one for sure. Thanks for the effort that you put into it.

It's only a small point but I do not think that the NFL cap can be described as tough. It is going up to 109 Million USD (about 140 Million AUD) per team. It is reported that only 2-3 NFL clubs are having any difficulty with the cap, while all the rest are millions of dollars in the comfort zone. In this context the NFL cap is designated as "hard" to distinguish from the "soft" baseball cap, which I am sure is how you meant it.

 

[dreamkillers]

Thanks for that REH.......it's going to take me a day or two to get across it all but I appreciate the effort you've made.

 

[Tarkyn_24]

I suggest picks 1-8 in the National Draft are awarded by lottery. The issue of tanking games late in the season is removed because each team that finishes in the bottom eight has a chance of securing Pick 1. Top eight teams get awarded picks 9-16 as usual.

16th- 8 balls
15th- 7
14th- 6
13th- 5
12th- 4
11th- 3
10th- 2
9th- 1

Once a clubs ball is drawn, all their other balls are removed from the draw until the first 8 picks of the draft are decided. This way, there is no point in tanking games because each team has a chance of getting pick 1.

Sure, as luck works, a club may get pick 1 after finishing ninth but so what! The issue at the moment is clubs being rewarded for poor performance by getting the best players in the country.

Would make for extra excitment at draft time too!

Good Idea.

 

[Troy Wingate]

Good Idea.

Funny. I've brought up that idea many many times, and everyone is like, meh, whateve. Someone else brings it up, and it's like, hey, that's a good idea.

 

[Tarkyn_24]

lol. Sorry mate. It IS a good idea but I don't go on Port forums, and this was the first time I've seen or heard of it.

 

[Peninsula Boy]

Interesting.

if i get a chance, I will reply in more detail tomorrow.

one thing though, European sports don't have a salary cap as this would be illegal under euopean law. in this sense, soccer is the most, if not only, free market sports industry in the world.

I think there has been talk of a salary cap in Europe recently by Platini who might be coming up for elections in the near future. I'm not sure. Maybe I'm tripping.

I personally would love a salary cap in European soccer. I'm very bored by the same names with hte big money because they live in a big city or have a billionaire owner.

Baseball is pretty close to not having a cap, maybe it's a Clayton's cap. The big teams spend like crazy and the little guys make do.

 

[Portia]

Funny. I've brought up that idea many many times, and everyone is like, meh, whateve. Someone else brings it up, and it's like, hey, that's a good idea.

If you're going to get all snitty about it, you might at least credit the NBA for coming up with the idea before you. Also its not a great idea because it has ridiculous extremes that statistically never happen, but probably will.

For example, Collingwood finishing 9th and getting the #1 pick. Imagine if that happened in the first year of this new system? Do you reckon it'd last a second?

AFL fans like to bitch about every component of administrative systems more than fans of any other sport, I'm sure of it.

 

[dreamkillers]

If you're going to get all snitty about it, you might at least credit the NBA for coming up with the idea before you. Also its not a great idea because it has ridiculous extremes that statistically never happen, but probably will.

For example, Collingwood finishing 9th and getting the #1 pick. Imagine if that happened in the first year of this new system? Do you reckon it'd last a second?

AFL fans like to bitch about every component of administrative systems more than fans of any other sport, I'm sure of it.

I think the reaction would be much worse if Collingwood actually finished 16th and ended up with pick 8..............

 

[Toots Hibbert]

And this would be increased by quite a margin if Brisbane finished ninth and got pick one in the same draft!

 

[Crow-mo]

I think there has been talk of a salary cap in Europe recently by Platini who might be coming up for elections in the near future. I'm not sure. Maybe I'm tripping.

all good and well to talk about it, but it will still be illegal under european law. Platini knows this, as does everyone else.

Baseball is pretty close to not having a cap, maybe it's a Clayton's cap. The big teams spend like crazy and the little guys make do.

Baseball has never had any form of salary cap. Last year the New York Yankees had the highest payroll in sports history - over USD 200 Million in player payments for te 2006 season. and No, they didn't win.

 

[Macca19]

The salary cap re: soccer in Europe isnt a salary cap in an AFL sense where every club has the same amount of money to spend on players.

edit: The idea is having a salary 'limit' of about 60% of a clubs annual turnover. The idea is to stop clubs like Real, Chelsea etc. from spending whatever they want on whoever they want and having ridiculously high salaries. The idea is to bring them back to the pack a bit more. Not sure if it will exactly work the way it seems in theory. Those clubs will still be able to spend 2-3-4 times the amount of other clubs anyway.

 

[Crow-mo]

The salary cap re: soccer in Europe isnt a salary cap in an AFL sense where every club has the same amount of money to spend on players.

edit: The idea is having a salary 'limit' of about 60% of a clubs annual turnover. The idea is to stop clubs like Real, Chelsea etc. from spending whatever they want on whoever they want and having ridiculously high salaries. The idea is to bring them back to the pack a bit more. Not sure if it will exactly work the way it seems in theory. Those clubs will still be able to spend 2-3-4 times the amount of other clubs anyway.

sorry macca, you're missing a key point here:
it doesn't matter what the calculation basis is, it is an impediment to the free market. if in a free market, Michael Ballack can earn GBP 6.7 million per year in wages, and the new regulation limits his ability to do so, then it will not survive a challenge in the European courts. It is the same principle that governed the Jean-Marc Bosman ruling: that soccer is NOT different to any other competitive industry. you do not have a salary cap on bin men, teachers, lawyers or financiers - the market will pay, what the market chooses to. anything elese is anti-competitive.

it does not matter what the restriction is, it is of its nature: restrictive.

 

[Crow-mo]

An interesting quote:
"the great trouble with baseball today is that most of the players are in the game for the money that's in it - not the for the love of it, the excitement of it, the thrill of it."

 

[Crow-mo]

that quote was from Ty Cobb, one of the greatest Baseball players in history. He made that comment in 1925!

 

[RussellEbertHandball]

one thing though, European sports don't have a salary cap as this would be illegal under euopean law. in this sense, soccer is the most, if not only, free market sports industry in the world.

sorry macca, you're missing a key point here:
it doesn't matter what the calculation basis is, it is an impediment to the free market. if in a free market, Michael Ballack can earn GBP 6.7 million per year in wages, and the new regulation limits his ability to do so, then it will not survive a challenge in the European courts. It is the same principle that governed the Jean-Marc Bosman ruling: that soccer is NOT different to any other competitive industry. you do not have a salary cap on bin men, teachers, lawyers or financiers - the market will pay, what the market chooses to. anything elese is anti-competitive.

it does not matter what the restriction is, it is of its nature: restrictive.

Ok, time for me to be a little picky Crow-mo. Is it illegal, because of a specific clause outlawing it, or is it illegal because of interpretation of case law? About 18 months ago on the Adelaide board when discussion about Port’s 2004 flag turned to a discussion about how Port had tampered with draft in 1995 to stop players from entering the draft, I called the draft illegal because of the 1991 NSW Rugby League case about their draft being overturned by the Federal Court. You pointed out, correctly I think, that the draft probably is illegal, but as the draft hasn’t been ruled on by the courts yet, then it can’t be officially called illegal. I think the salary cap in Europe fits the same bill as the draft, i.e probably is, but not officially yet illegal.

When I looked at information on the different codes distribution to players, I read the following wiki page about the Salary Cap for different codes.

It stated that in the UK, Rugby Union’s Guinness Premiership and Rugby Leagues Super League have a salary cap. So I looked them up to check.

http://www.guinnesspremiership.com/199_224.php?PHPSESSID=16028
WHAT IS THE SALARY CAP?
Each club must comply with the PRL Squad Capping Rules and Regulations. For the Squad Cap Year 1 July 2006 - 30 June 2007, the Senior Ceiling is £2,118,617 and the Academy Ceiling is £185,400.

An additional allowance of £250,000 will be available for each Guinness Premiership club within the salary cap regulations for the 2006/07season.

I couldn't find anything on the SL homepage but it was corfirmed at this BBC Sports page.
http://news.bbc.co.uk/sport2/hi/rugby_league/super_league/5252930.stm

Friday, 11 August 2006, 16:15 GMT 17:15 UK
Wigan back in mire after penalty
Wigan were dealt a new blow in their fight to avoid relegation when they were docked two points for breaching the Super League salary cap.
The club were also fined £50,000 for spending more than the permitted 50% of their income on salaries in 2005.

I saw your reference to the Bosman case and had a look at an old article that I read last year. I was of the opinion that Bosman was more about overturning restrictions on where you could ply your trade, not on how much you would get paid for your trade.


THE BOSMAN CASE, EU LAW AND THE TRANSFER SYSTEM

The last paragraph is interesting
WHAT IS THE FUTURE FOR FOOTBALL UNDER EUROPEAN LAW?
Recent attempts to exempt football from European Competition and Employment law have failed. Football is an "economic activity", and as such it is an area of E.U. ‘competence’ (although a declaration made with the Treaty of Amsterdam that acknowleged the specificity of sport). Therefore the football industry must comply with European Union Law a similar way to any other industry. It is clear now that the Bosman case was just the tip of the iceberg with regard to E.U. law’s affect on football, a point backed up by the stance of the European Commission on this issue. Furthermore, the application of EU Competition Law to the industry is already having an important effect with regard to the sale of television rights (for the UEFA Champions League and the FA Premier League for example).

EU Employment Rights for footballers are also being extended to many non-E.U. states in Eastern Europe and North Africa that have association agreements with the E.U.. Recent cases involving Valery Karpin and Igor Simutenkov (both Russians playing in the Spanish League) mean that Football Authorities cannot discriminate against non-EU nationals (most notably through the imposition of foreign player quotas). Furthermore, it is probable that employment rights arising from the 'Cotonou Agreement' between the EU and a large number of African, Pacific and Carribbean states are also directly applicable to football, meaning that it would be unlawful for a Governing Body or club to discriminate against a player from these nations who is lawfully employed within the EU.


This article is written by Dr Geoff Pearson from Liverpool University Business School. They have an MBA (Football Industries) program and have set up a Football Industry Group to do research on the industry. My first thought was to laugh at a football MBA, but I guess it’s no different to a hospitality, or health or transport MBAs, lots of core general subjects, with a few specific choice subjects. The industry is big enough. Anyway Geoff's speciality is Football and the Law. Last night I sent him an email about salary caps in the Rugby codes, the potential of one in Football, European Law and the legality of a cap. This is what he sent back.

In my opion a salary cap in football would be illegal as it would fall foul of either Article 81 or Art 82 of the EU Treaty - anti-competitive practices. If clubs got together and agreed on a salary cap they would be acting as an illegal cartel. Likewise, a salary cap 'imposed' by a governing body could be seen as Abuse of a Dominant Position. Salary caps in Rugby aren't necessarily legal, they just haven't been challenged in the court. Salary Caps could only be legal if they were seen as necessary for the survival of football - ie a sporting rule rather than an economic one (which is where Bosman comes in - the transfer regs were seen as economic rules and therefore illegal - the EU has no power to contest sporting rules).

I hope this helps.

Cheers,
Geoff.

So maybe Platini does have some ground to move to introduce salary caps into European football.

This BBC Sport web page has a good article summarising the 10 years post Bosman.
http://news.bbc.co.uk/sport2/hi/football/4528732.stm
Reading this I now have a better understanding why Leeds sold so many of their players. At the time I didn’t really get it.

I visit sportsbusiness.com every now and then as a reference source for what’s happening around the globe. I reckon these comments by the editor a couple of years ago are a good summary on a salary cap in Europe.
http://www.sportbusiness.com/news/155971/the-week-that-was

In every walk of life money talks. In rugby and football it seems to be particularly fluent in Franglais.

More than anything, these issues draw attention to the role and applicability of salary caps in sport. Aside from any legal issues – and there are plenty of lawyers straining at the leash in anticipation of making a challenge – all the evidence is that they simply don’t work where there is an international labour market. In principle a salary cap is an equaliser, a means of establishing and maintaining competitive balance by ensuring that clubs have the same ability to attract and retain players.

Now that may be fine in the United States and Australia where players in the NFL or AFL simply have nowhere else to go. But in the liberal sporting free markets of Europe a salary cap may be necessary for a limited period to help establish a sport gather the strength of appeal to have commercial clout, but beyond that they are redundant.

From a historical point of view it’s interesting that there is a salary cap in England/UK functioning. For those old farts like me who can remember the BBC “On the Ball” football program show on the ABC on Monday nights which had highlights of the previous weekends soccer matches in the UK, you might remember the host Jimmy Hill. Jimmy Hill was president of the Players Association and in 1960/61 he took the FA to court about their maximum wage of £20 per game any footballer in England could be paid. The court overturned the maximum wage rule and English football was changed forever. Up until then clubs from small towns like Barnsley or Preston North End could compete with the big clubs from Manchester and London etc and won League titles and FA Cups or at least had the chance to win them.

If you had this rule in the AFL where the maximum wage for a footballer was say $500 per game as his only payment, and we had a promotion and relegation system in the AFL, then it's conceivable that the Nuriootpa Tigers (HG Nelson’s team) could win the AFL flag.

 

[Toots Hibbert]

Thanks REH. A fascinating read.

 

[Macca19]

sorry macca, you're missing a key point here:
it doesn't matter what the calculation basis is, it is an impediment to the free market. if in a free market, Michael Ballack can earn GBP 6.7 million per year in wages, and the new regulation limits his ability to do so, then it will not survive a challenge in the European courts. It is the same principle that governed the Jean-Marc Bosman ruling: that soccer is NOT different to any other competitive industry. you do not have a salary cap on bin men, teachers, lawyers or financiers - the market will pay, what the market chooses to. anything elese is anti-competitive.

it does not matter what the restriction is, it is of its nature: restrictive.

Hey I never said it was a good idea. I agree with all of that.

 

[Crow-mo]

cheers. but I think you provided your own answer, but maybe came to a different conclusion to what the key points perhaps point towards.

a few things:

Ok, time for me to be a little picky Crow-mo. Is it illegal, because of a specific clause outlawing it, or is it illegal because of interpretation of case law?

as we discover via bosman, football is seen as any old industry, and there are anti-competitive laws.

You pointed out, correctly I think, that the draft probably is illegal, but as the draft hasn’t been ruled on by the courts yet, then it can’t be officially called illegal. I think the salary cap in Europe fits the same bill as the draft, i.e probably is, but not officially yet illegal.

it's a little different, because in the US these sports operate because they have been defined as less an industry but more like a company in nature. i.e. the NBA is a single employer, and it's constituent members are not actually competeting with each other economically. thus it was fair and reasonable for them to collectively bargain certain restructions - much like in any workplace agreement. Australia probably fits somewhere close to this model, if it does at all. the legal frameworks are not the same, so there is no guarantee of this.

the EU soccer countries work a little different, because it would be difficult - in fact the opposite has happen - to not view them as a competitive industry. different unrelated leagues, countries etc.

It stated that in the UK, Rugby Union’s Guinness Premiership and Rugby Leagues Super League have a salary cap. So I looked them up to check.

gotta say, i didn't know this. but i do know there is stuff all money involved, so it's fairly small beer as far as challenges etc go.

I saw your reference to the Bosman case and had a look at an old article that I read last year. I was of the opinion that Bosman was more about overturning restrictions on where you could ply your trade, not on how much you would get paid for your trade.

not quite, it's about the status of the industry.

THE BOSMAN CASE, EU LAW AND THE TRANSFER SYSTEM

Recent attempts to exempt football from European Competition and Employment law have failed. Football is an "economic activity", and as such it is an area of E.U. ‘competence’ (although a declaration made with the Treaty of Amsterdam that acknowleged the specificity of sport). Therefore the football industry must comply with European Union Law a similar way to any other industry. It is clear now that the Bosman case was just the tip of the iceberg with regard to E.U. law’s affect on football, a point backed up by the stance of the European Commission on this issue. Furthermore, the application of EU Competition Law to the industry is already having an important effect with regard to the sale of television rights (for the UEFA Champions League and the FA Premier League for example).

This article is written by Dr Geoff Pearson from Liverpool University Business School. They have an MBA (Football Industries) program and have set up a Football Industry Group to do research on the industry. My first thought was to laugh at a football MBA, but I guess it’s no different to a hospitality, or health or transport MBAs, lots of core general subjects, with a few specific choice subjects.

ps. not sure there is any such thing as a credible MBA in hospitality, health or transport. fwiw.

]
In my opion a salary cap in football would be illegal as it would fall foul of either Article 81 or Art 82 of the EU Treaty - anti-competitive practices. If clubs got together and agreed on a salary cap they would be acting as an illegal cartel. Likewise, a salary cap 'imposed' by a governing body could be seen as Abuse of a Dominant Position. Salary caps in Rugby aren't necessarily legal, they just haven't been challenged in the court. Salary Caps could only be legal if they were seen as necessary for the survival of football - ie a sporting rule rather than an economic one (which is where Bosman comes in - the transfer regs were seen as economic rules and therefore illegal - the EU has no power to contest sporting rules).

I hope this helps.

Cheers,
Geoff.

seeing as the EU has already ruled that football is essentially an ordinary, economic industry, can't see what sort of chicken little, the sky is falling, scenario could possibly invoke the economic/sporting imperative. particularly as there has never been more money in the game.

So maybe Platini does have some ground to move to introduce salary caps into European football.

actually I think everything, including the info you dug up, points towards that he does not.

 

[Peninsula Boy]

all good and well to talk about it, but it will still be illegal under european law. Platini knows this, as does everyone else.



Baseball has never had any form of salary cap. Last year the New York Yankees had the highest payroll in sports history - over USD 200 Million in player payments for te 2006 season. and No, they didn't win.

So it doesn't have a salary cap. That isn't the point. The point is, like a salary cap, their is still a massive disparity in the amount of resources each team has and can acquire. I think I heard recently that A Rod earned more money than all the Tampa Bay Devil Rays.

More money doesn't necessarily mean instant win but it helps a whole lot. How many AL East pennants have they won in the last 10 years. Indeed, if you look at the AL East, it stays the same.

The only real difference as to why baseball has different winners is becasue they play finals, unlike European soccer who only play a major round. Obviously, you can get hot in finals and run amok and steamroll a team with a huge bank account but average form. Its all about the sample size.

By the wya, I'v ebeen told that Platini is president of EUFA and I will be championing his cause till the Cows come home.

 

[Crow-mo]

So it doesn't have a salary cap. That isn't the point. The point is, like a salary cap, their is still a massive disparity in the amount of resources each team has and can acquire. I think I heard recently that A Rod earned more money than all the Tampa Bay Devil Rays.

ah, but that's the point. there is a massive disparity between what the big market teams, NY Yankees, Boston Red Sox, La Dodgers etc. can spend. But it has not always meant success. the Yankees haven't won a world series this century, god knows they spent the money! this years lineup was thought to be the 'best on paper' lineup in history, until they were spanked by the smaller market detroit team.
the Red Sox have one WS in 85+ years - that was in 2004? Dodgers haven't been in the world series since 1988.

this year the title was won by the St Louis Cardinals - a very small market team. Baseball is one of the few games, where the smarter - pure baseball oriented programs - have a disproportionate amount of success relative to their market sizes.

More money doesn't necessarily mean instant win but it helps a whole lot. How many AL East pennants have they won in the last 10 years. Indeed, if you look at the AL East, it stays the same.

does it?

The only real difference as to why baseball has different winners is becasue they play finals, unlike European soccer who only play a major round. Obviously, you can get hot in finals and run amok and steamroll a team with a huge bank account but average form. Its all about the sample size.

I'm not sure there is any evidence of this? teams like Oakland, Florida, etc. very small market teams have had a great deal of regular season success too. in fact, the other issue you've not mentioned in Baseball is that rosters are built for the post-season. some lineups are naturally suited to the finals format, which has more to do with executive decision making than luck in the finals.

but really, this off topic.

By the wya, I'v ebeen told that Platini is president of EUFA and I will be championing his cause till the Cows come home.

ok.