Front ended contracts

[HeHateMe]

What has an OOC player like Frawley got to due with this thread?

Anyway....

Clubs need to write a safeguard into the contracts imo.

Say player 1 is on:
Yr 1 700k
Yr 2 700k
Yr 3 400k
Yr 4 400k
Avg 550k per year.

If player 1 breaks contract after year 2, being paid 1.4m not 1.1m.
The receiving club can reimburse the difference.

Receiving club pays player
Yr 3 550k and 150k to former club
Yr 4 550k and 150k to former club

Or is this to simple?


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[Brutalitops]

Theyre a contracted player so the club can outright refuse to trade them unless they get a deal which suits them. This generally works out better for the club who holds the contract as its accepted they will get a better offer for the player than they would if he was out of contract.

 

[BF Tiger]

How do you get money from a player who's already been paid? Clubs might be made to repay the money but the player isn't giving back s**t.

Then don’t release the player. In the Gibbs case his choice would then be to continue playing with Carlton on reduced coin, or not play at all on no coin. A player might fit out a year, but not two.

Further to that I don’t think a player should necessarily need to pay back all the difference in money. As older players (eg GAJ) move through their contract they could reasonably argue that a portion of the higher pay is because of higher (expected) output in year 1 (as a 31 year old) as opposed to year 3 (as a 33 year old).

 

[Kappa]

How do you get money from a player who's already been paid? Clubs might be made to repay the money but the player isn't giving back s**t.

Exit clauses are super common in contract law, clubs will have a way to protect themselves from players trying to grab and run. You can definitely put it in the contract something like an early-termination fee.

 

[Kwality]

Bryce Gibbs last contract at Carlton was around 5 years, was heavily front ended according to what i read, he serves 3 years on inflated coin then wants out when the squeeze hits, apparently Dayne Beams contract with the Lions was front ended as well, now there's strong rumours he wants out.

I'm sure there are other examples as well, my question is, should this be allowed? Doesn't sit well with me anyway.

Beams (as an example, and i'm saying he's leaving) could earn over 200kpa more if he leaves Brisbane after receiving the vast majority of his contract already.

Should it be buyer beware, or do the clubs deserve a safety net?

A safety net to protect clubs from poor commercial decisions, WHY? You front load a contract for your own reasons, no one holds a gun to your head, so you should accept the consequences if you dont build in provisions to protect both parties if or when things go pear shaped.
Its not Einstein stuff for a proficient lawyer.

 

[Isaac Cumming No 1]

Exit clauses are super common in contract law, clubs will have a way to protect themselves from players trying to grab and run. You can definitely put it in the contract something like an early-termination fee.

Actually you absolutely couldn't in a contract with a person. With a company you could.

 

[Boxhead_31]

But should the player requesting a trade after reaping the majority of his contract repay the money?

You mean like Ablett did with the GC?

 

[HavUEvaSeenTheRain]

Exit clauses are super common in contract law, clubs will have a way to protect themselves from players trying to grab and run. You can definitely put it in the contract something like an early-termination fee.

What has an OOC player like Frawley got to due with this thread?

Anyway....

Clubs need to write a safeguard into the contracts imo.

Say player 1 is on:
Yr 1 700k
Yr 2 700k
Yr 3 400k
Yr 4 400k
Avg 550k per year.

If player 1 breaks contract after year 2, being paid 1.4m not 1.1m.
The receiving club can reimburse the difference.

Receiving club pays player
Yr 3 550k and 150k to former club
Yr 4 550k and 150k to former club

Or is this to simple?


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The problem is the club still never get the benifit they would've from front loading contracts. Eg Carlton and GC never get the benifit of having their gun players in Ablett and Gibbs on say $200k instead of $600k while being able to spend the extra $400k to improve their side. That salary cap space is lost forever.
Getting money back I doubt would be able to be added to the salary cap. Unless is comes off the team recruiting the player which could be a possibility

 

[unplugged]

I've always wondered why the players don't just get the average amount each year over the length of the contract, ie 5 million over 5 years is a million a year to the player, even if the club has it as 1.5, 1.5, 1, 500k, 500k.

Whether it's front or back ended should only affect the club's TPP etc. IMO. What difference would it make?

 

[HavUEvaSeenTheRain]

I just realised how poorly that was worded. A possible change of say..

Ablett signs a 3yr $3million dollar contract.
GC pay Ablett $2.5mil over the first two years before asking for a trade.
Geelong than lose $500k from their salary cap because GC had already front ended that much of his pay.
GC get $500k extra.

 

[LordLucifer]

Bryce Gibbs last contract at Carlton was around 5 years, was heavily front ended according to what i read, he serves 3 years on inflated coin then wants out when the squeeze hits, apparently Dayne Beams contract with the Lions was front ended as well, now there's strong rumours he wants out.

I'm sure there are other examples as well, my question is, should this be allowed? Doesn't sit well with me anyway.

Beams (as an example, and i'm saying he's leaving) could earn over 200kpa more if he leaves Brisbane after receiving the vast majority of his contract already.

Should it be buyer beware, or do the clubs deserve a safety net?

100% agree with you.

The Suns were looking for some form of financial compensation from Geelong over the Ablett deal due to the nature of his front-loaded contract status.

I do not like front-loaded contracts but understand why they exist, however, there certainly needs to be some sort of policy from the AFL that compensates a club if they lose a player after the 'big' years of a contract.

 

[HavUEvaSeenTheRain]

I've always wondered why the players don't just get the average amount each year over the length of the contract, ie 5 million over 5 years is a million a year to the player, even if the club has it as 1.5, 1.5, 1, 500k, 500k.

Whether it's front or back ended should only affect the club's TPP etc. IMO. What difference would it make?

Money is always better early, to invest ect so players would much prefer it early

 

[unplugged]

Money is always better early, to invest ect so players would much prefer it early

Less money in 5 years when your circumstances have possibly changed isn't necessary better, though. Goes both ways.

 

[00Stinger]

Just would get taxed more, pass

No they wouldn't.

Almost every player would be in the highest income tax bracket anyway so it would make no difference

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[Blackas87]

Clubs need to uphold their contracts, players signed they deal with it.

 

[Suma Magic]

Just would get taxed more, pass

Wouldn’t the same amount be at the highest bracket regardless of loading? Once it’s above 250k or whatever it doesn’t matter if it’s 500 then 300 or 400 then 400.

 

[Suma Magic]

Can just put a clause in that players pay clubs back if they leave early?

The flip side is back-ended contracts. But I suppose players can stay til the end if they really want.

 

[Taylor]

I don't see what the issue here is.

Players and clubs go into contracts with their eyes open, both can hold the other to their agreement unless both consent to terminate the deal early.

 

[HavUEvaSeenTheRain]

Less money in 5 years when your circumstances have possibly changed isn't necessary better, though. Goes both ways.

But you've already given the money anyway. Nothing changes except you have the ability to make extra $$ on the money because you are getting it earlier.
For example I had a client the other day tell me he bought a house four years ago for $1.3mil and he has now put it on the market and they are expecting $2mil plus. That's why they won't money early because it opens up more of these possibilities.

 

[blue harvest]

Has a player ever bailed early on a heavily back ended contract?
Say for example Buddy, he was getting something like 700k-800k for a few years and now it's up over a million and soon jumps to something like 1.4M.

 

[Scotland]

Mal Michael springs to mind, but that was 10+ years ago so I could be wrong.

I'm a long time critic of front/back ended contracts. They make a mockery of the salary cap. No club should be able to sign Tom Lynch for example for $1m a year over however many years unless they can stump up the money each and every year. If we are paying Kennedy and Darling $1.5m between the two and sign Jesse Hogan for $1m a year on a long term deal that is basically 'OK you'll get not much then Kennedy's salary and then some of Darling's' that kind of defeats the purpose of having a salary cap. The whole point of it is that if we want to sign Hogan for $1m a year is that we create that $1m worth of cap space or are out of the running while teams at the bottom end of the ladder remain in the hunt (for a hypothetical player who is not up for sale).

I also believe contracts should be enforceable and tradeable. I don't have an issue with someone like Lachie Weller requesting a trade to Gold Coast, but the remainder of his contract should have gone with him. Tim Kelly is a good example. I assume as a draftee he signed a 2 year x $100kish deal. If we want to trade for him we should be obligated to pay him the final year of that contract and then beyond that is a new and separate contract. We shouldn't be able to 'buy' him with $500k a year when he's contracted for much less.

 

[Tigers123]

But you've already given the money anyway. Nothing changes except you have the ability to make extra $$ on the money because you are getting it earlier.
For example I had a client the other day tell me he bought a house four years ago for $1.3mil and he has now put it on the market and they are expecting $2mil plus. That's why they won't money early because it opens up more of these possibilities.

The time value of money my friend

 

[The Nostradamus]

raises a good point

imagine a 1 million dollar deal over 3 years, front ended for first year to get 800k the following 2 years get 100k

player pockets the 800k and at end of year 1 they leave and get say a 3yr deal with another club for say 1.2mil, 400k each year

im actually surprised no player has exploited this yet

 

[Belnakor]

Has a player ever bailed early on a heavily back ended contract?
Say for example Buddy, he was getting something like 700k-800k for a few years and now it's up over a million and soon jumps to something like 1.4M.

no but Carlton tried to bail on Kouta's one when they were paying him iirc about 250k when he was at his peak, on the understanding his last contract would be much higher. Then Carlton basically went to the press and cried about the contract and guilted Kouta into giving some of his money back (money he had rightfully earned).

probably why not many players agree to back ended contracts these days.

 

[Tbonefreo]

Just would get taxed more, pass

This.


How much tax would the average $500k pa pay?