The 95% salary cap rule - Gocatsgo and others

[Dan26]

I noticed on another thread there was some complaint about the 95% salary cap rule. Basically the rule states that all clubs regardless of talent must pay a minimum of 95% of the salary cap.

The feeling amongst some of the posters on this web-site was that this was unfair. Why should Fremantle and Collingwood pay the same amount as Essendon, was the argument? A lot of people have been saying stuff like : "Why not make the minimum 80%"

Let me just state a couple of facts here :

• Last year, even though the minimum was 95%, every single one of the 16 clubs paid in excess off 98%.
  
• I believe that 14 clubs all paid the maxiumum, 100%.

This tells us that even if the minimum payment was 40% (hypothetically), clubs would still pay the maxium 100% anyway. So, there is no point complaining about this rule. Even if the rule wasn't implemented, all clubs would pay at, or close to the 100% anyway as clubs did last year. No club paid the minimum 95%. I just wanted to state the facts here, because it seems some people think that their clubs are being financially disavantaged.

Well, those clubs, who are being "supposedly" financially disadvantaged, are still electing to pay the full amount of their salary cap allowance, when they don't have to. I wish that supporters could see this, and stop complaining.




[This message has been edited by Dan25 (edited 01 May 2001).]

 

[WCE2000]

i think it should be a club's option as to how much the will pay.

If a club thinks "Oh, we'll just **** our players up and only give them half-pay."
But then the players will strike and the club will be in turmoil.

To get the best players they will still use just about all of their cap.

But struggling clubs like the Kangaroo's and Richmond, may want to take just settle for a less talented list for a couple of years, and concentrate on putting some money back into the club.
Then when they get abit of money back into the club, they would go after some better players, and put more emphasize on their on field results.

Obviously, the on field results are the most important thing in a club, but i think for struggling clubs, they may prefer to have 2 or 3 poor seasons, and put the salary cap money back into other areas of the club, then get their on field results back on track.

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[WCE2000]

As i finished writing that post i realized people are going to say:
"Why the **** would a club want to go bad on field. On field should be the most important thing."

I think the on field restults are the most important, but some clubs may prefer to have a coupl of bad seasons, to get their finances back on track.

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[CJH]

What this proves is some clubs are overpaying their players!

As a rule of thumb clubs are either challenging for a premiership or rebuilding.

Most challenging clubs (Hawthorn, Essendon, Port, Richmond) should be at or about 100% as they should have a good spread of experience and talent.

Clubs that are rebuilding would be expected to have a greater proportion of kids who are being developed. (Collingwood, Freo) It is these clubs who should be at the salary cap minimum.

THis is a generalisation, but the point should hold true.

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I See Sunshine On a Cloudy Day The joys of knocking off Collingwood!
How the West was won - West Coast Review

 

[CJH]

Originally posted by WCE2000:


...

But struggling clubs like the Kangaroo's and Richmond, may want to take just settle for a less talented list for a couple of years, and concentrate on putting some money back into the club.

...

WTF????

How on earth do you pick us for a struggling club? Hell, we are very well positioned financially, have a heap of supporters (the reason why we are included in the Big Victorian 4) and have a list that should be challenging for a premiership.

On the other hand, I know what a team with no talent looks like - I saw them go round last Friday night!

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I See Sunshine On a Cloudy Day The joys of knocking off Collingwood!
How the West was won - West Coast Review

 

[WCE2000]

Up here in Sydney, we get very little media coverage.

The only coverage is through afl.com.au and generally i can't be bothered to read through it.

Therefore, i sometimes just make an educated guess, which is sometimes right, and sometimes not.

I wasn't sure if Richmond are struggling or not (which is why i had the question mark next to them) but i thought i heard their name thrown around abit in the debt basket a few times.

Apologies to Richmond and their fans

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[WCE2000]

Originally posted by CJH:
On the other hand, I know what a team with no talent looks like - I saw them go round last Friday night!

Really, i though Remantle played on Sunday

...

Oh, wait, i worked out who your talking about

...

Your talking about Richmond, right ??

 

[CJH]

Originally posted by WCE2000:
Really, i though Remantle played on Sunday

...

Oh, wait, i worked out who your talking about

...

Your talking about Richmond, right ??

Yep, and we used our lack of talent to scoot out to a 48 point lead...

Then we got word that ratings were sliding and would we mind making a game of it...

So we let you catch up....

Then to prove it was no fluke we again scooted out to a 39 lead.

God help you if we actually had to try!

P.S.

One thing that Richmond is proud of is that our level of borrowings is a big fat ZERO. We lost $600K last season ($200K has since been compensated to us from the AFL) which was caused mainly to the huge injury run and a slip in membership.


------------------
I See Sunshine On a Cloudy Day The joys of knocking off Collingwood!
How the West was won - West Coast Review

 

[Same Old's]

Originally posted by Dan25:
I noticed on another thread there was some complaint about the 95% salary cap rule. Basically the rule states that all clubs regardless of talent must pay a minimum of 95% of the salary cap.

The feeling amongst some of the posters on this web-site was that this was unfair. Why should Fremantle and Collingwood pay the same amount as Essendon, was the argument? A lot of people have been saying stuff like : "Why not make the minimum 80%"

Let me just state a couple of facts here :

• Last year, even though the minimum was 95%, every single one of the 16 clubs paid in excess off 98%.
  
• I believe that 14 clubs all paid the maxiumum, 100%.

This tells us that even if the minimum payment was 40% (hypothetically), clubs would still pay the maxium 100% anyway. So, there is no point complaining about this rule. Even if the rule wasn't implemented, all clubs would pay at, or close to the 100% anyway as clubs did last year. No club paid the minimum 95%. I just wanted to state the facts here, because it seems some people think that their clubs are being financially disavantaged.

Well, those clubs, who are being "supposedly" financially disadvantaged, are still electing to pay the full amount of their salary cap allowance, when they don't have to. I wish that supporters could see this, and stop complaining.

[This message has been edited by Dan25 (edited 01 May 2001).]

Why did the AFL make this rule in the first place if ALL clubs go over the 95% of the salary cap anyway?

 

[Hit The Boundary Saints]

The 95% rule was the AFL's attempt to finally push Fitzroy out the door. Fitzroy were headed down the path of paying significantly under the salary cap in order to try and straighten out their finances, so Ross Oakley quickly put a stop to it by introducing this rule.
It is an absolute joke.

 

[Roylion]

I disagree with the 95% salary cap rule for two main reasons.
1) It contributes to the inflationary rise of player salaries year by year, putting extra financial pressure on certain clubs.
2) I find it difficult to come to terms with that a club with a young list and perhaps on the bottom four or five rungs of the ladder for a couple of years and who is a 'rebuilding' phase is forced to pay that list at least 95% of what a club who may have might be consistent finals performers, have some of the top players in the competition and who may have even won a premiership. This contributes to Point 1.

I don't agree that the rule was put in to specifically put Fitzroy out of the competition. I do agree that it was introduced so that clubs would not offload experienced players and become uncompetitive in order to survive. This is exactly what Fitzroy did at the end of 1994, in order to ease their financial woes. Had Fitzroy been able to continue in it's own right after 1997, they would not have been able to do so for long becuase there is abosultely no way they would have been able to pay their players 95% of the salary cap.

As player payments continue to rise sharply, more and more financial pressure will be bought to bear on poorer clubs. The existance of this rule is one of the main reasons why I am sceptical of 10 AFL clubs remaining in Victoria in the medium to long term. If it's continued, then at some point there will be a breaking point and a couple of clubs will go to the wall.

 

[Dan26]

Originally posted by Roylion:
I find it difficult to come to terms with that a club with a young list and perhaps on the bottom four or five rungs of the ladder for a couple of years and who is a 'rebuilding' phase is forced to pay that list at least 95% of what a club who may have might be consistent finals performers, have some of the top players in the competition and who may have even won a premiership.

But Roylion, if you read my first post, you would notive that all clubs pay well over the 95% anyway (even though they don't have to), and nearly every club pays the full 100%, even though it is not compulsory to do so.

 

[BUBBALOUIS]

Originally posted by Dan25:

But Roylion, if you read my first post, you would notive that all clubs pay well over the 95% anyway (even though they don't have to), and nearly every club pays the full 100%, even though it is not compulsory to do so.

Dan i agree with you, the point then is if all clubs pay more than the 95% anyway, why have the rule? Why not just let the clubs decide how much of the salary cap to pay to players? If its pointless complaining about the rule 'coz everyone pays the max anyway, then my point is we have created a rule for no reason then, cancel the rule and everyone will be happy

 

[choppy]

Originally posted by WCE2000:

But struggling clubs like the Kangaroo's and Richmond, may want to take just settle for a less talented list for a couple of years, and concentrate on putting some money back into the club.

Struggling, we shall see whos struggling at the end of the year.

 

[Roylion]

Originally posted by Dan25:

But Roylion, if you read my first post, you would notive that all clubs pay well over the 95% anyway (even though they don't have to), and nearly every club pays the full 100%, even though it is not compulsory to do so.

The difference between 95% and 100% of the cap using the 2000 figures as the basis, is $237,500, which really is small change in the context of the multi-million dollar turnover of a modern AFL club. The minimum a club could pay in 2000 for example was $4,512,500 and the maximum 4,750,000. The average gross player wage in 2000 was $126,996. 301 players were paid $100,000 or lower. I'm not surprised a club would pay close to 100% of the salary cap, when they are compelled to pay at least 95%, if by doing so they perform better on the field thereby attracting extra sponsorship, membership etc, which would cover the extra $237,000 easily. However if the perceived benefits of on-field performance were outweighed by saving money, then that club should would be unlikely to pay 100% of the cap, if they could pay significantly lower.If for example a club was allowed to pay 80% of last year's salary cap, because they had a young list etc, they would have paid 3.8 million and saved $950,000. Voluntarily shelling out an extra $950,000 is much different to doing the same with $237,000.

This year the salary cap is $5,185,000 per club..a rise of 9% (or $435,000) from last year. The clubs this year have to pay a minimum of $4,925,750... a difference of $259,250. However 80% of the salary cap is $4,148,000, which is a difference of $1,037,000. If the clubs were allowed to pay less than 95%, not only would they have an increased ability to manage their finances as they see fit, but it would also have the effect of slowing (not stopping) the inflationary rise of player payments.

I understand your point and it is a valid one. The weakness in my argument is of course that the richer clubs would continue to pay close to 100% of the salary cap..because they can..and attract players from the poorer clubs, who are paying less which might eventually produce a lopsided competition. However I would be confident that other equalisation policies such as the draft would keep the competition relatively even.
Keep the salary cap, keep the minimum that clubs can pay, but reduce the percentage of 95. I hope you can understand the point I am trying to make, as I'm not sure I've explained it carefully enough.

 

[Dan26]

Roylion,

I understand your point perfectly, and for one of the first times on here, I bow to your judgement.

Yes I see what you mean. If a club is already compelled to pay 4.5 million, why not just pay the whole 4.75 million. It's pretty much the same anyway.

I was basically saying that all clubs would continue to pay the full 100% even if there was no minimum. But now I start to see your point. If the minimum was 0%, then perhaps there would be some clubs who elect to save, say, a million dollars by paying, say, 3.5 million. They can't do that now as they're not allowed.

You also say that the 5% difference equates to 250,000 dollars. That is not to be sneezed at. It's the difference between a profit and a loss for a lot of clubs, remember that.

Anyway, my main point was that people are complaining that their club with a weak list is paying too much to players, yet these people are unaware that their club is paying the full 100% when they don't have to. That was my point. As you said though, that could easily change if there was no mimimum.



[This message has been edited by Dan25 (edited 03 May 2001).]