The huge AFL contract shift resulting in greater free agency compensation
Last year, clubs were shocked St Kilda was handed first-round free agency compensation for Josh Battle. Now, the truth behind what happened – and why it will continue – can be revealed.
The explosion in salaries for the AFL’s new wave of under-25 stars could again secure clubs first-round compensation for departing free agents leaving on less than $900,000 a season at year’s end.
Clubs were shocked last October when St Kilda was able to secure first-round compensation for departing defender Josh Battle and GWS also won a band one pick for Collingwood-bound journeyman Harry Perryman.
Instead of some vast conspiracy the truth was more simple – a realignment in the salary cap of clubs now signing up brilliant players under 25 on lucrative long-term deals.
This has changed the market value for players aged over 25, upon whom the free agency formula is derived from.
Battle signed a six-year deal of under $900,000 at Hawthorn – taking less than St Kilda’s offer – while Collingwood’s deal for Perryman was around $900,000 over six years.
Clubs had assumed the rise in the salary cap – this year it jumped from $15.79 million (2024) to $17.76 million – would mean both those players would secure end-of-first-round compensation.
But it is understood the huge contracts secured by players under 25 meant both players comfortably earned first-band compensation for their departing clubs.
Free agency compensation is calculated by lining up every contract of players over 25, with first-round compensation awarded if the player’s contract falls into the top five per cent of those deals.
Yet the game has changed for AFL clubs, as players like Errol Gulden, Nick Daicos, Connor Rozee, Hayden Young, Max King and Mac Andrew sign bumper long-term deals.
It means a greater proportion of a club’s salary cap has shifted to younger players, meaning the criteria for first-round compensation for players 25 and over is not as high as expected, given big wage rises over recent years.
Put simply, the stars of the game are being paid bigger wages at a younger age by clubs prepared to pony up to lock them away long-term.
Carlton’s Tom De Koning, North Melbourne’s Luke Davies-Uniacke, West Coast’s Oscar Allen, Dogs pair Marcus Bontempelli and Ed Richards, and Hawthorn’s James Worpel are the high-profile free agents this year.
Most would easily secure first-round compensation but Port Adelaide’s Kane Farrell and Essendon’s Sam Draper are the kind of players who might only hit the first band threshold.
Draper is happy to prove himself before earning a fat contract at Essendon, while Farrell will be in demand given his penetrative kicking
GWS last year secured end-of-first-round compensation for departing flanker Isaac Cumming (on a six year deal) and Richmond won end-of-second-round compensation for West-Coast bound Jack Graham.
For the Giants to secure two first-round picks for Cumming and Perryman would have seemed a fantasy early in 2024 but the premium paid for free agents allowed them to cash in on the departure of two valuable players, who still lack match-winning qualities.
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