How coronavirus will impact players’ salaries


In the absence of actual games being played, the new sport has become economics not football – or, more to the point, the up-ended economics of AFL football. As people in the league have lost their jobs temporarily or permanently, a new sport has arisen: how much can we now pay the players?

The coronavirus has devastated the world but, for the purposes of sport in this little corner of the world, we are occupied with what the virus has done to the game of footy. In short, the virus has shut down the competition. First, there were no fans at games, and now there are no games at all.

The football industry is labour intensive – you need players to play it and then you pay a lot of people to make the players look good and get bums on seats and eyeballs on TVs. Football revenues dropped off a cliff when crowds were locked out and games abandoned. Suddenly, no broadcast money and gate revenue were coming in and sponsorship money was thrown into doubt. The impact has been profound and immediate. AFL bosses had to go, cap in hand, to the NAB and ANZ banks to secure $600 million in loans to keep the game and clubs afloat this year.

To prove to the banks they were good for the loan, the AFL had to show how they were cutting their own costs. They moved in like auditors of every club. They immediately stood down 80 per cent of the workforce at clubs and at league headquarters until at least May 31, when it is hoped games might return.

Then the AFL went to the players’ union, the AFL Players Association, and said: “We need to talk about the players’ wages.”

The players are the face of the game and so have been the high-profile face of the cuts to the industry. Everyone seems to have an opinion on how much their wages should be cut.

So how much of a hit are players taking? And what will be the effects on the game in the longer term?

Above: Lance Franklin was to earn $1.4m this year.

How much do players earn?

Nine players last year earned more than a million dollars. Which is a hell of a lot of money in anybody’s book – but there are more than 800 players in the AFL who earn less than that. The average player’s salary is $363,000.

At the bottom end of the scale are the rookies. A first-year rookie earns $85,000 and match payments of a standard $5000 a game. These are the most speculative players – a lot of them don’t play AFL games so don’t earn match payments.

A first-year player out of the national draft earns a base of $105,000 and match payments (again, $5000 a game).

By the time a player reaches their third or fourth year, their manager will have negotiated them up to a base salary in the mid to high $100,000s plus match payments that, in some cases, might be up to $10,000 a game. So, if they play most games over a season they will earn about $350,000.

Clubs also tie in bonus payments along the way so when you play five, 10, 20, 50 games – or whatever the figure might be – you will earn a bonus payment. Bonus incentive payments are also paid for how high a player finishes in the club best-and-fairest voting, for winning the goal-kicking award and other things.

By the time a player reaches his fourth or fifth year and is playing close enough to every game, he will be on about $400,000 a year.

The better, more sought-after players will be on bigger, fixed contracts without extra match payments, so they get paid regardless of whether they play. These are the players on the multi-year contracts that are worth millions of dollars across the life of the contract.

When do players get paid?

Players get paid monthly for the work they’ve done. This week they were paid for the previous month, which would have meant one-12th of their base payment. If they are on a base contract plus match payments they will have been paid for the one senior match.

So what happened this year?

By the time the coronavirus shut down the season, players had already been paid five of their 12 monthly instalments because the football financial year runs from October 31. No player has been asked to give back money they have already been paid. Players have agreed to give up 50 per cent of their pay for the next two months, during which time games have definitely been postponed, then they will either give up 50 per cent or 70 per cent for the remaining five pay periods, depending on whether games resume this season.

If the AFL comes back and plays 16 more rounds of football this year, the players will continue to give up 50 per cent of their pay for the rest of the year. If no more football can be played this year, the players have agreed to give up 70 per cent of their pay for those remaining pay periods.

Above: Jeremy Cameron was on less than $1 million last year but was due to be paid about $1.6 million in 2020.

So, they’re all sharing the pain?

Yes and no.

It might be the world’s smallest violin you play here in sympathy for wealthy players but think about this.

The AFL players and clubs operate under a salary cap. That is the total amount a club is allowed to pay its players. This year the total player payments figure for each club is $13,013,257.

Now, clubs have to fit all of their 40-something list of players under their salary cap. So while a player might be on a five-year, $5 million contract, it does not mean the player earns $1 million in each of the five years. Sometimes they are paid a lot early in their contact, sometimes a lot late in their contract. Players agree to be paid different amounts in different years to help the club squeeze other players into the salary cap.

This means some players are taking a bigger or smaller hit from this year’s pay cut than they would if they were paid equal amounts in each year of their contract.

Take Carlton’s classy midfielder Jack Martin. In order to recruit Martin from Gold Coast through the pre-season draft at the end of last year instead of having to trade for him, the Blues promised to pay Martin $3.1 million – plus incentives – over five years.

But the kicker was they promised to pay him more than $1 million in each of his first two years at the club and then $1.1 million in total across all of the remaining three years. Structuring the contract this way – in what’s known as a front-loaded deal – made it easier for Carlton to ensure no other club would select Martin in the draft, and they would get their player.

So Martin now finds himself, in relative terms, dudded by a pay cut that affects the most lucrative year of his contract.

Above: Jack Martin’s contract is front-loaded – and he’s in his first year.

GWS spearhead Jeremy Cameron is in the final year of a heavily back-loaded contract. Cameron was on less than $1 million last year but was due to be paid about $1.6 million in 2020. His contract was initially supposed to be a flat $1 million or so each year for five years, but he agreed to push back money to the latter part of his contract to help the Giants keep other talented players at the club. Essentially, by agreeing to move money around he helped the club stay under the salary cap.

But now he’s reached the year when he was finally supposed to earn the money that had been voluntarily deferred in the preceding four years – only to find it is the year of the coronavirus pay cuts.This the fault of a bat in Wuhan not Cameron or anyone at the Giants.

Which brings us to one of the most famous deals in AFL history. Lance Franklin went to Sydney on a bumper nine-year contract that averaged more than $1 million a year when he started in 2014. This year “Buddy” was due to earn $1.4 million, next year $1.5 million and in 2022 a flat million. So the pay cut has hit big this year.

Not every player is a millionaire, though.

Marlion Pickett has a special place in footy folklore. The Richmond midfielder nearly won a Norm Smith Medal for best player on the ground in last year’s grand final, his blind turns and exquisite balance a defining feature of the Tigers’ second premiership in three years. It was also his AFL debut.

Pickett has four kids, moved interstate from Perth and is still on about the lowest contract level for a player. Richmond is eager to re-contract him on significantly better terms but, for the moment, he is on a base rookie contract, having been drafted in the middle of last year.

Pickett will be one of the players eligible for financial help from the AFL under a hardship fund agreed to with the players’ union. The AFL has set aside $500,000 for players in financial hardship as a consequence of the pay cuts and season postponement.

Above: Marlion Pickett was on $85K base salary this year.

So, what does this forced pay cut for all really mean?

In the short term, it means the players all lose at least a quarter of what they would have been on this year – that is, they lose at least half of their pay from just over half of the year’s worth of monthly pay cheques.

So what? Others are losing their jobs. Why do I care?

You don’t have to, and compared with being stood down or losing your job altogether, a pay cut of this size, while no footy is being played, would seem a reasonable sacrifice. What it does is show the depth of the pain in the AFL right now and how much money has disappeared out of the game because of the pandemic.

And the pay cuts are not quarantined (popular word at the moment) to this year but are likely to be felt next year, too.

Hang on, they will have their pay cut next year?

Yes, no one is talking about it yet because so much effort is concentrated on getting some form of a season still played this year. And, until we know if we get back to playing this year, clubs can’t get to making firm decisions on next year. But take it as read that player contracts for next year will have to be revisited too. The revenues lost to the game already will not be limited to this season. Next year is likely to again see a drop in revenue from lost sponsors, lost corporate packages at games and an expected drop-off in membership as unemployment rises and people examine their discretionary spend this year.

That continued damage to revenue into next year will see the AFL and the AFLPA enter discussions again at the end of the year once they have a clearer financial picture for next year.

Player wages are not the only thing under review, so too is the overall number of players on club lists. The players you’ve just become used to watching might not be there any more. Clubs have at least 44 players on their lists and some have more. The push from the AFL is to cut the number of players on club lists to 35.

And that is just the players. The AFL has ordered clubs to cut $1 million out of their football budgets this year and will demand another $2 million cut next year. That cannot be done without clubs being forced to get rid of, or cut the wages of, assistant coaches, recruiters, medical staff, welfare staff and administration staff. Most of these things won’t mean a lot to fans because they don’t see the people – but the cuts will hurt.

So how will footy be different without them?

There are some who would argue you won’t know the difference, that there has been too much fat in football and too many coaches and allied staff on the fringes. They would also argue if you have a dozen fewer players on lists you don’t need as many coaches.

It may be that skills deteriorate – if you have fewer people working with players to get better then, logically, the players won’t do as well as they might have. Perhaps fewer coaches could be noticeable on the field too if it means the game is less structured and coached.

But all of this is, first and foremost, about saving money to save the game.

How will the women’s game be affected next year?

The AFLW season has been cancelled. As with the men’s game, the matches could not go ahead and, unlike the men’s game, the much shorter women’s season was only weeks away from completing the finals. It was not feasible to put it in limbo and hope to come back months later.

Where this question mark over the financial future of the AFL leaves the women’s game, or how this revenue drop-off affects the AFLW is unclear. It has not been fully addressed because there is a preoccupation with working out what if any season the AFL will have this year. Some have privately questioned whether in these times the AFL can afford to continue with the AFLW.

Others argue, more persuasively, that the AFL cannot afford not to continue with the AFLW, if you pardon the double negative. That is, there is a bigger cost to the broader game by touching a massive growth area than there is by a short-term money saving move. That said, the competition will not expand again, from 14 to 18 teams, any time soon. What it means for AFLW pay packets next year and beyond is up in the air until there is some clarity around when games get back again.

Most Viewed in Sport

Loading



AFL

Related posts

Make a comment