AFL players seek percentage pay deal as negotiations begin

AFL players will use their $64 million retirement fund as a tool to balance the books under their proposed new pay model.

The AFL Players’ Association has begun negotiating a new collective bargaining agreement with the AFL.

AFL players will use their $64 million retirement fund as a tool to balance the books under their proposed new pay model.

The AFL Players’ Association has begun negotiating a new collective bargaining agreement with the AFL and is seeking a set percentage — likely between 25 and 30 per cent — of the game’s revenues.

The AFL has not formally rejected the model this time around, but staved off a push for the introduction of a percentage pay system in a bitter pay war five years ago and is believed to be against it still.

In order to maintain certainty over salary cap limits and player contracts, the players would accept a percentage of forecast revenue over a five- or six-year term.

Under the players’ proposal, if the game achieved higher than expected revenue in a year, the players’ cut of the extra money would be paid into their retirement fund.

Conversely, if the AFL books showed less than forecast income, the retirement fund would be used to make up the shortfall and ensure player payment obligations could be met.

The AFL has consistently outperformed its budget forecasts in the past decade.

Potential revenue from the AFL’s proposed foray into China and the emergence of new fantasy betting games such as Moneyball and Draftstars have been cited as examples of income streams unable to have been forecast when the last CBA was struck in 2011.

It is believed the AFL’s rules will be used as an argument for the percentage pay model, similar to that used in many US and international sports such as cricket, NFL and NBA.

The AFL’s rule 28.2 states: “Proportion of Revenue in fixing the Total Player Payments for any Football Year or Years, the (AFL) Commission shall endeavour to ensure that the aggregate of the Total Player Payments for each of the Clubs is a fair and equitable proportion of the aggregate of the projected gross annual revenue of the AFL and its Clubs for such period.”

The player union, led by former Australian Cricketers Association boss Paul Marsh, says there are three phases to the negotiations.

The first will be to win agreement to the principle of paying players a percentage share; the second is to work with the league on what revenues may be excluded — such as gaming revenue, government grants or bequests.

The final plank is to agree on the percentage number.

Footy statesmen Drew Petrie and Matthew Pavlich, the AFLPA president, this month told the Herald Sun the game’s 800 players were committed to winning a percentage share.

The players’ retirement fund, separate from superannuation, had investments of $64 million as of October 31 last year.

It acts as a tax-effective salary sacrificing saving and investment system that could net long-term players as much as $500,000 to be paid out after retirement.

Players say a set share formalises a “partnership” with the AFL, lessens the league’s financial risk by tying pay to revenue, and would assist the AFL’s competitive balance aims.

AFL boss Gillon McLachlan — who has not attended the meetings with the AFLPA — said on Friday he hoped a deal would be struck in the next two months.