Payout to sacked coach Brenton Sanderson could push Adelaide Crows into luxury tax territory

ADELAIDE will be hoping a million-dollar payout to Brenton Sanderson will be exempt from the AFL’s new cap on football department spending.

18/09/2014 Adelaide Crows Chairman Rob Chapman at Adelaide oval Presser Pic. Roy VanDerVegt

ADELAIDE has the chance to plead “exceptional circumstances” led to Brenton Sanderson’s sacking and his million-dollar payout should be exempt from the AFL’s new cap on football department spending next year.

The Crows are searching for a new senior coach whose wage will be on top of the estimated $600,000-a-season they owe Sanderson, as well as paying out any departing assistant coaches.

With the AFL introducing a “soft cap” on football department spending from next year, the Crows could be taxed 37.5 percent of every dollar they exceed it in 2015 and 75 per cent in 2016.

It means their shock decision to axe Sanderson with two years left on his contract could prove more costly than simply paying him out.

That scenario might yet be avoided if the contract can be paid in full this year and the AFL does not require it to apply to next year’s budget.

But if it does fall under 2015 football department spending and Adelaide exceeds the cap, the club would either be hit with the competition’s new luxury tax or may consider cuts to its footy department.

But yesterday the AFL confirmed Adelaide would have the chance to convince the league that Sanderson’s payout should not be included in their football department spend for next year because of “exceptional circumstance”.

If they are forced to pay the new luxury tax, it would be a further blow to the club’s coffers after it posted a record $1.8 million loss last year.

Crows chairman Rob Chapman could not be contacted yesterday but on Thursday he said the club would honour Sanderson’s contract as it would always do with any assistants or other staff members.

“We have a contract with Brenton, we have many contracts with many of our senior people including assistant coaches,” Chapman said.

“Like all clubs, that’s just the instrument, that’s the cost of doing business, so whatever contract, whatever agreement we’ve got with any of our staff, they will always be honoured.”

The AFL is yet to announce what the “soft cap” on football department spending next year will be, however clubs will not be limited by it like the salary cap but instead taxed for exceeding it.

It forms part of the AFL’s competitive balance policy which addresses the growing gap between the rich and poor clubs.

The league will brief club presidents on the cap, what it contains and how it will operate, at a meeting in Melbourne next week and details are likely to be made public early next month.

It’s expected football department, also known as “non player spending”, will include wages for coaches, fitness staff, travel, technology and equipment but player development managers will be exempt.

The Advertiser understands some AFL clubs have no plans to slow spending on their football department and are prepared to cop the tax no matter what the price.

But others are putting their football department under the microscope to trim any fat to avoid being slugged potentially hundreds of thousands of dollars.

Adelaide’s football department spend was reportedly $17.2 million in 2012-2013 — more than Port Adelaide and North Melbourne ($16.3m) but less than powerhouses Collingwood ($21.2m) and Sydney ($20.3m). It is expected the cap on football department spending will be somewhere in-between.

Originally published as Payout to sacked coach Brenton Sanderson could push Adelaide Crows into luxury tax territory