Ramifications for all Australian Football Leagues

[DrJon]

Players have to understand that the salary cap/draft = even competition = increased interest = increasing revenue.

Take this plank away, the big clubs will take all the best talent, overall support will decline as competitiveness is affected and the game will be in the ropes again like it was in the 1980's. I know the football was good but the finances were terrible, unless you were the Blues.

 

[Father Jack]

Re: Salary cap about to be destroyed

The AFLPA aren't stupid. They know why the salary cap is in place, and they know how important it is to the long term viability of the competition, and thus to the players themselves.

I can't see this affecting the AFL, unless of course an individual player was greedy enough to take it on on his own.

 

[The Passenger]

Re: Salary cap about to be destroyed

I can't see this affecting the AFL, unless of course an individual player was greedy enough to take it on on his own.

the thing is we wouldn't know until it happens. you never know what some players may or may not be thinking, especially in the light of this SBW case.

 

[SimonH]

Re: Salary cap about to be destroyed

The AFLPA aren't stupid. They know why the salary cap is in place, and they know how important it is to the long term viability of the competition, and thus to the players themselves.

I can't see this affecting the AFL, unless of course an individual player was greedy enough to take it on on his own.

Dead right. The AFLPA wouldn't challenge the salary cap in a million years. If the NRL falls on its arse badly in the Williams case, it will use the leverage to demand more and more generous deals, not just in raw $ but also in terms of the rules of the comp (e.g. allowing a broader category of players than just 10-year, 30+ yo veterans to have their salaries discounted when counting the cap).

The real question is: who would act as a solo rogue to take the salary cap down? Forget what would happen after months or even years of protracted litigation: just the act of filing the case in court would send the AFL into meltdown. Chances are very good that a few weeks after filing, the case would be withdrawn and the player would announce a nice new contract for an undisclosed sum. And exactly how much it was, who was paying for it, and how much of it counted towards the still-in-place salary cap, would never be spoken of again.

Similarly, it's very much in everyone's interests in the Williams case for both parties to negotiate or someone to back down-- SBW can peel off a few euros from his thick wad of cash, and hand it to the Bulldogs for compensation. The NRL and Bulldogs might want to bluster and injunction it up right now while the presses are running hot, but they do not want to take this through a contested hearing and final decision. They are unbelievably stupid and deserve everything they get, if they do.

And, indeed, unless Mr Gallop takes a chill pill, there might not be much limit to their stupidity:

The clear assumption is that he has received advice that his best chance is to secretly and furtively leave the country and avoid service of a summons.

Only problem with that theory, Dave, is that you've already had loss #1: the Judge ruled against you on substituted service, where if he was satisfied that SBW was trying to evade service, the application for substituted service would have been granted. So what you're trying to do is undercut an existing decision, in an ongoing case. Sailing pretty close to the wind of contempt, for mine: and you're blustering about seizure of assets, contempt and gaol if SBW theoretically ignores some theoretical legal victory that you're yet to have? Des-pe-rate.

 

[mcgarnacle]

Re: Salary cap about to be destroyed

Dead right. The AFLPA wouldn't challenge the salary cap in a million years. If the NRL falls on its arse badly in the Williams case, it will use the leverage to demand more and more generous deals, not just in raw $ but also in terms of the rules of the comp (e.g. allowing a broader category of players than just 10-year, 30+ yo veterans to have their salaries discounted when counting the cap).

correct............the AFLPA will have more leverage in any collective bargaining agreement, etc. The AFLPA will have more power to argue the amount of revenue generated by the AFL, and ensure a fair amount of this is passed onto the players.

If SBW suceeds in any challenge to the cap, then it sets a precedent for any player union or individual player in any code to challenge the cap in their respective football code. I agree with many here who believe that the AFLPA would not bring such an action against the AFL. But it may affect the operation of the salary cap with the most obvious being a significant increase in the value of the cap, but also other aspects such as certain concessions for established or veteran players (the latter already exists), and other initiatives which give players a better deal in general.

 

[Scotland]

My only problem with the AFL salary cap is that it punishes the successful.

It's great that we can't just buy Ablett or Franklin, but it sucks if we have to lose a player we have developed because a club with weaker playing stocks can afford to pay them $50-100k more a year. Given the draft is in place I doubt anything will change, as you can't really argue any team deserves to keep a player, particularly one drafted with an early pick which was only given because they were shit at the time. I wouldn't mind seeing a rule in place where players who have given a club say 6-10 years of service being allowed to be paid extra outside the cap provided they stay at that club.

 

[zero]

i too believe that the AFLPA wouldnt in a million years challenge the salary cap, it puts a significant amount of their members jobs under threat, and they are very close to the AFL with regard to pay increases anyway (although that may change if we have successive slow increases in the TV rights). and we dont have foreign leagues putting big upward pressure on salaries, and in fact have naturally increasing revenues to give players sizable increases every 5 years.

but the THREAT that they might would be a part of every single negotiation with the AFL from then on. thats the power of a precedent.

so the salary cap would be safe... but the draft and trading system? dont be so sure. it wouldnt surprise me if the AFLPA used the threat of challenging the cap to eliminate player movement rules. that is something that will not seriously damage the competition but would benefit every single one of their members.

and it will start skewing results toward the rich and prestigious, just in a less onerous way than the elimination of the cap. plus we would have the same problem with third party payments that the NRL has

EDIT: i totally agree with the above, macgarnacle and simonh

 

[Valve Bounce]

Ch 10 just reported that the rogue Sonny Bill Williams will challenge the validity of the salary cap..........this could open up a can of worms and no doubt the AFL will be interested in its development.

Both QANTAS and VIRGIN are reporting unprecedented demands for flights to Ireland.

 

[RUNVS]

Both QANTAS and VIRGIN are reporting unprecedented demands for flights to Ireland.

Yes but the chances of a Qantas plane reaching Ireland without crashing is not good.

 

[Ice-Wolf]

Yes but the chances of a Qantas plane reaching Ireland without crashing is not good.

FFS it didn't crash a bit exploded and pieces came off.

 

[Pied Avenger]

SBW new manager Khoder Nasser is non accredited with the NRL. I.E. can't represent him in negotiations.
He is also Loudmouth Mundines manager.
Gavin Orr SBW former manager still gets his slice of SBW's contract confirmed Yday on Sydney radio.
Ergo khoder Nasser The new manager tells SBW go to France, play rugby for $1 mill a year, oh by the way you owe me 5%.
Toulon said thay would pay out the contract.
Let him go,he's a Myth, the most over rated athlete ever to play sport in Australia.
Can't understand how the contract could be written with a loop hole after the Terry Hill/Souths saga years ago?

 

[SimonH]

Let him go,he's a Myth, the most over rated athlete ever to play sport in Australia.

Sonny Bill Williams doesn't really exist? Or stories about Sonny Bill Williams have been passed down in Polynesian culture for hundreds of years? Either way, a bit of a surprise.

Can't understand how the contract could be written with a loop hole after the Terry Hill/Souths saga years ago?

No loophole in the contract (or at least that's what the Dogs are saying). There's apparently no explicit get-out clause. It's just that when it comes to a person's employment the courts are very very slow to order specific performance even if there's a breach of contract. Discussed in at least the Fairfax press this morning.

If you sign a contract agreeing to work for IBM for 5 years, and you walk out after 1 year, then you've breached your contract. But what remedy does IBM have? They can sue you for whatever damages flow from you not being around (but seeing that they can almost certainly hire someone else to do your job, the amount wouldn't be huge); but the law is pretty slow to create indentured labourers. It doesn't want to force people back into situations where there is bad blood, and doesn't want to be a referee deciding whether you're genuinely putting in your best efforts, or whether you're loafing because you hate your employer for forcing you back. More likely, IBM will just say 'good riddance', cop it on the chin and hire someone new to fill yr shoes.

Now, if you leave IBM after 1 year and run off to do the same sort of work for Hewlett Packard, IBM may also have the remedy of seeking an injunction preventing you from working for any competitor for the duration of your contract with them. Depending on what the contract says. And depending on restraint of trade arguments you might want to run. That's where it gets really messy and uncertain.

 

[RussellEbertHandball]

It seems stupid doesn't it? Sports shouldn't be completely changed for one player. But hell, look at Jean-Marc Bosman, his case completely changed world soccer - for the worse a lot will argue.

The Bosman case is worth looking at. It was about the basic issue of transfer of a player between clubs in different countries yet the final ruling opened up a Pandora's can of worms.

On the Port board a 18 months ago we looked at different sports and salary caps around the globe and it all end up with looking at the Bosman case.

http://www.bigfooty.com/forum/showthread.php?t=293463&page=3

This is a quick summary of what happened after the case.
http://news.bbc.co.uk/sport2/hi/football/4528732.stm

Wednesday, 14 December 2005
10 years since Bosman
By Tom Fordyce

THE BOSMAN RULING EXPLAINED
*On 15 December 1995, the European Court of Justice ruled that players should be free to move when their contracts had expired
*It also ruled that EU clubs could hire any number of European Union players

Ten years ago this Friday, the European Court of Justice passed a ruling that presaged a revolution in European football.

The desire of Jean-Marc Bosman to move from Club de Liege to Dunkerque inadvertently triggered a change in the law that altered the face of football forever.

Little did the low-profile midfielder from Belgium realise what his court action was about to do ...

POWER TO THE PLAYERS
Before Bosman, a player could not leave unless his club agreed to let him go.

After the ruling, a player was free to leave as soon as his contract expired.

Result? The player became the boss.

Free-agent players moving clubs could demand huge signing-on fees and salaries, on the basis that the club they were joining had not had to pay a penny in transfer fees.

Clubs became powerless to stop their best players leaving at the end of their existing deals.

And players under contract could ask for bigger and better deals for staying put - because they could threaten to leave for free if the club failed to accede to their demands.
<snip>
Ironically, Bosman himself was left bereft by his far-reaching court action.

He started his case in 1990 when he was 25 and in the prime of his career, was left in limbo for five years and then, one year after he won, he had to leave third division Vise because he said he could not make a living out of it.

He is now reduced to living off his court indemnities
<snip>

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.

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 acknowledged 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.


Anyway Geoff's speciality is Football and the Law. When I originally was discussing this topic I sent him an email about salary caps in the Rugby codes in the UK, the potential of one in Football, European Law and the legality of a cap. This is what he sent back.

In my opinion 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.

I have no idea what Williams will argue ultimately, his lawyers will be a lot more knowledgeable one would think, but they would have to prove the salary cap doesn't serve its purpose, it limits the earning power (especially from things like sponsors), and basically that its not legal. Why has it taken so long? Because these things need a catalyst. As I said theres never been a reason to try and exploit this, until now really.

I'm not a Trade Practices lawyer, I have studied Trade Practices law, but unless you know the law and case law to the nth degree and know if our law is similar to European law and if our courts respect European decisions you would be foolish to completely ignore the impact of the Bosman case.

In the USA the employment rules of players has been exempt from Anti-Trust laws for over 100 years in baseball's case. So if laws in each jurisdiction allow or disallow certain activities then its clear cut. If not then it will be how well you argue your case in court.

I believe that the draft is on very shaky grounds and the main reason it hasn't been challenged is the cost and not wanting to rock the boat.

This is where the AFL Players Association becomes important. If Sonny Bill wins his case in the federal court, firstly you would expect an appeal or possibility of it and secondly the AFL might bend to the AFLPA. If they challenged the draft then the AFL is fundamentally changed. If the draft falls over then the salary cap could as well. The players want a bigger slice of the pie and free agency. Like in the UK the RL and RU comp have a salary cap but it hasn't been challenged. If Sony Bill wins, then the AFLPA are the ones most likely to challenge the AFL. They may well strike a deal on other issues and sign an agreement not to challenge.

Could be an interesting couple of years.

 

[nesski47]

This sounds like bullshit to me.

What legal grounds does Williams have to challenge the salary cap?

Restraint of trade? That's a massive stretch. There is nothing illegal about the salary cap. The NRL has every right to administer their league in this way. Williams will be pushing shit uphill to find a loophole in that one.

And why would the AFL give a shit? It's not's like they're going to have players walking away from contracts to take up other sports.

having studied sport and the law as part of my undergrad degree, my lecturer, who happens to be heavily involved with the AFL did stipulate that if challenged the salary cap could be found to be in restraint of trade. players aren't able to negotiate to their total worth. If SBW is successful, precedent would be set in the courts and similar challenges by AFL players would follow suit. The reason that salary caps still exist in these codes is because noone has bothered to challenge them in court.

 

[SimonH]

... The reason that salary caps still exist in these codes is because noone has bothered to challenge them in court.

Yes, but 'bothered' implies it's just because they're too lazy to hire a lawyer. The real reasons are:
a) the players are happy for the AFLPA to collectively bargain the general rules of the competition on their behalf; and
b) no individual player has felt sufficiently aggrieved that he got short-changed due to the salary cap, for it to be worth his while challenging it.

The first of these things won't change. A case might crop up that meets the second criterion-- but then again, it might not for 15 or 20 years.

 

[seanoff]

The Bosman ruling has some relevance here but it has nothing to do with the salary cap really and more to do with FREE AGENCY.

I'm pretty sure if a players want free agency they'll get it and the AFL know that once a contract has expired the player should be able to move where ever they wish.

the salary cap doesn't inhibit player movement as such and it doesn't restrict single player payments. You can if you want pay a player $3M per season, but you obviously give up any hope of a decent and even list.

on that basis i suspect a case for free agency would succeed but an action to blow the salary cap would not.


Lets face in a commercial world the AFL is a CARTEL, with price fixing, collusion etc etc etc. So lets not get too carried away.

 

[polly63]

Shows what kind of bloke $BW is.

-------------------------
Rugby League has a (recent) history of players putting their greed before their clubs and even the game itself. Footy players seem less inclined to do so, for many reasons. I like to think (please don't disabuse me of this, i really want to keep thinking it) that it is because the game reflects the (old?) Australian mores of mateship and sticking together etc.

Hope SBW takes up the cudgel but I think it's a lot of hot air. Love to see a lot of his $precious poured into the bottomless pockets of QCs.

 

[mcgarnacle]

Yes, but 'bothered' implies it's just because they're too lazy to hire a lawyer. The real reasons are:
a) the players are happy for the AFLPA to collectively bargain the general rules of the competition on their behalf; and
b) no individual player has felt sufficiently aggrieved that he got short-changed due to the salary cap, for it to be worth his while challenging it.

The first of these things won't change. A case might crop up that meets the second criterion-- but then again, it might not for 15 or 20 years.

c) the cost
d) by the time a ruling is handed down, a player will most probably be in the twilight of their career, or it might even be over, and so will not be able to receive any potential benefit.
e) being known as the player who could potentially change the 'sport' for the worst.

 

[medusala]

Re: Sonny Bill Williams vs. The Salary Cap

Can't see how the SWB and the salary cap problems of rugby have anything to do with AFL. There is no other viable alternative for AFL players to pursue unlike Rugby and Overseas offers.

How many players were Essendon forced to get rid of due to the salary cap?

 

[GhostofJimJess]

Removal of the salary cap would be a very bad outcome, and I say this as a supporter of a cashed-up club.

Based on money in the bank, it would mean clubs like Collingwood, Eagles, Carlton and maybe Sydney and Brisbane (being dominant in their markets) would run the show.

You'd have a number of perpetual strugglers (and probably need an alternative competition like the FA Cup to keep them and their sponsors interested), and it would mean the end of Bulldogs, Melbourne, North Melbourne, Fremantle and, potentially, kill off the two new clubs.

You wouldn't have perpetual strugglers. The strugglers would merely cease to exist. Unlike the English FA the suburban/home town link to most Melbourne teams has been dissolved in preference to mainly a generic and widespread following.

That such teams would become uncompetitive would see their demise sooner rather than later.

Instead, there would emerge a different kind of perpetual struggler - maybe Brisbane, Freo, Gold Coast or Essendon - who would become the "Tottenham" or "Everton" of the new league i.e. not ever a realistic chance of dislodging the leading handful of clubs.

Lose some of your top players, and these clubs can't compete on the field. Can't compete on the field.... there goes the supporters, there goes your sponsors, and there goes your TV games. If you can't compete on the field the AFL doesn't want to see 100-point floggings beamed around the nation.... Lose those and the clubs lose their income, players off contract can't be re-signed and the cycle continues.

TV is a massive implication here.

Let's assume that the AFL was to be reduced to, say, 10 teams - 4 strongest survivors out of Victoria, and six from around the rest of Australia. Not an unrealistic scenario.

What was an $160/year deal for 8 TV games a week would automatically be reduced to $100M/year due to pure maths.

This $100M would be further reduced by the slip in ratings as more than one million previously loyal Melbournians who have soon become detached from their own club instinctively switch off.

In addition to this, the required repetitive nature of the draw would serve to slightly dilute Showdowns and Derbies

 

[JoondalupJ]

Of course the salary cap mightn't be valid, but the AFLPA are aware of its importance and are happy to work within its confines. Luckily for us we don't have to worry about comps in other parts of the world. What is sometimes seen as a weakness is very likely a strength in this case.

Spot on! We are lucky with AUSSIE RULES being an intra national comp.The salary cap needs keeping because if it became open slather then you would end up with about 4 clubs that win forever the rest would be also rans forever (unless they won a billion in the lottery). If you could pay any price you wanted well the poorer clubs just die.

 

[MarkT]

The AFL are possibly lucky the NRL don’t have a draft. The combination of the draft, the tight player transfer rules and the cap constrictions are more likely to represent a restraint of trade than a cap alone. It could be argued that a cap merely forces clubs to choose players in a tighter confine. A challenge to the cap by Williams seems more like a threat to get the NRL to ease off after threatening to force him to stand out of all sporting codes for the remainder of his contract. I suspect Williams would argue that the Bulldogs had used the cap as a reason they couldn’t increase the offer but the real issue has to be the contract in place which William’s agreed to.

If the cap is rules illegal in the NRL though the AFL will crap itself because it will know it can’t uphold its competition engineering regime and with the new franchises about to be awarded there will be some flack flying around.

It isn’t about an AFL player jumping ship from the AFL it is about a player demanding more and the club believing losing the player, or players, is unfair and then openly exceeding an illegal cap. That said, I doubt Williams will succeed anyway. A restraint of trade challenge in the AFL however is another matter. The issue of uncontracted players being restricted from plying their trade freely is a real one. The rules that restrict that are open for challenge.

As for the all the EPL etc hysteria, well all I can say is the there are SFA similarities from the size of the economy to the inter league competitors to financial rewards from international competition to private ownership……

 

[JoondalupJ]

I disagree, for if SBW wins his case against the SC, then there's precedent for ANY player from this code to challenge it.

But they wouldn't. Thats just the point. Start destroying legally the small national(relatively speaking) fabulous competition we have in Oz is not in the interest of any player. Its like pooping in your own nest, yes it is.

 

[JoondalupJ]

The AFL are possibly lucky the NRL don’t have a draft. The combination of the draft, the tight player transfer rules and the cap constrictions are more likely to represent a restraint of trade than a cap alone. It could be argued that a cap merely forces clubs to choose players in a tighter confine. A challenge to the cap by Williams seems more like a threat to get the NRL to ease off after threatening to force him to stand out of all sporting codes for the remainder of his contract. I suspect Williams would argue that the Bulldogs had used the cap as a reason they couldn’t increase the offer but the real issue has to be the contract in place which William’s agreed to.

If the cap is rules illegal in the NRL though the AFL will crap itself because it will know it can’t uphold its competition engineering regime and with the new franchises about to be awarded there will be some flack flying around.

It isn’t about an AFL player jumping ship from the AFL it is about a player demanding more and the club believing losing the player, or players, is unfair and then openly exceeding an illegal cap. That said, I doubt Williams will succeed anyway. A restraint of trade challenge in the AFL however is another matter. The issue of uncontracted players being restricted from plying their trade freely is a real one. The rules that restrict that are open for challenge.

As for the all the EPL etc hysteria, well all I can say is the there are SFA similarities from the size of the economy to the inter league competitors to financial rewards from international competition to private ownership……

There is an avenue for AFL players to take up a restraint of trade case against a club or a tribunal or the AFL themselves, but they don't, because, it may help them, but it rocks the national footy system boat far too much and messes it up for other players.

 

[JoondalupJ]

This sounds like bullshit to me.

What legal grounds does Williams have to challenge the salary cap?

Restraint of trade? That's a massive stretch. There is nothing illegal about the salary cap. The NRL has every right to administer their league in this way. Williams will be pushing shit uphill to find a loophole in that one.

And why would the AFL give a shit? It's not's like they're going to have players walking away from contracts to take up other sports.

Gunnar you are correct. Aussie rules needs that cap to protect itself.