Secret strategy: Why Essendon will be free agency kings for years to come
Essendon is one of two clubs who will be armed with free agency warchests when the salary cap grows by almost $3 million in the next two years. This is how they’ve done it.
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Essendon and West Coast believe they will be armed with free-agency warchests when the salary cap grows by almost $3 million in the next two years after opting against passing those pay rises on to their players.
The AFL Players’ Association signed off on a fresh Collective Bargaining Agreement last month that is set to boost the salary cap from $15 million (2023) to $17.8 million (2025).
The uplift in 2024 will be 5.1 per cent, while the rise in 2025 will be a further 12.6 per cent – a significant spike as the new seven-year $4.5 billion broadcast deal kicks in.
That is when the Bombers and Eagles could look to strike with their banked salary cap space, after refusing to write Total Player Payment uplift clauses into their player contracts.
But it does comes at a cost – the Bombers and Eagles often have to pay their players above market value as a trade-off, because players’ agents try to build the projected pay rises into the base deal.
The 2024 free agency list is headed by Hugh McCluggage (Brisbane Lions) and Tim English (Western Bulldogs).
Stars eligible for free agency in 2025 could include Jacob Weitering, Tom De Koning (Carlton), Andrew Brayshaw (Fremantle), Sam Taylor (GWS), Luke Davies-Uniacke (North Melbourne) and Oscar Allen (West Coast).
The Bombers have emerged as this year’s free agency king – signing Ben McKay and Todd Goldstein (North Melbourne) and pursuing Jade Gresham (St Kilda) – and they are poised to go hard again in 2024 and 2025.
McKay was poached on a six-year deal worth $800,000 per season.
Clubs who pass on the full TPP uplift to the bulk of their playing list are set to face significant salary cap exposure in 2024 and 2025.
But the Bombers and Eagles will simply bank that cash.
Clubs are aware of a de-identified AFL document that shows TPP uplift exposure from club-to-club.
Just my opinion but the TPP increases should be for the players, currently playing - not for clubs to stockpile to chase big money recruits.
— Tim Lawrence (@LawrenceTim) October 11, 2023
It’s the rookie listed players and players close to minimum base that are missing out. https://t.co/wtLhCcJIzW
Some clubs are close to Essendon and West Coast, who have zero exposure, because they have also played hardball and rarely agreed to uplift clauses in contract negotiations.
St Kilda is also understood to be one of the least-exposed clubs.
The strategy employed by the Dons and Eagles also helps their planning because they can accurately estimate their salary cap position.
But rival clubs argue that a player they re-sign for $400,000 with an up-lift clause would demand $500,000 from Essendon.
One manager said if his player was worth $700,000 and he forecasted a 10 per cent salary cap increase then he would probably ask the Bombers for $750,000.
But if the pay rises exceed industry expectations, as they will in 2024 and 2025, then the Bombers and Eagles are still likely to be better off.
Some clubs might have a blanket rule where they simply pass on the entire up-lift to their players. Others might only agree to an up-lift clause for a handful of players.
Every player contract is negotiated individually and a range of variances also exist in up-lift clauses.
For example, some players will sacrifice the first 5 per cent of an uplift and take home whatever is left after that.
Others accept 50 per cent of the uplift while some players have compound uplift clauses written into their contracts.
This year’s salary cap grew 10 per cent from 2022 and was back-paid once the CBA was finalised last month.
The salary cap will grow by only 3 per cent in 2026 and 0.8 per cent in 2027 following the big hikes across the next two years.
The 2024 and 2025 jumps are when the Bombers and Eagles will be in the sweet spot to poach players whereas rivals could be squeezed by the uplifts.
Players who are traded under contract generally change clubs based on an extension and renegotiation of their contract.
That means that even if Xavier Duursma’s 2024 contract at Port Adelaide included a TPP uplift clause it would be discarded and replaced with a fresh contract from the Bombers in the event he is traded to Tullamarine.
The renegotiated contract must be agreed to before the trade is lodged and approved by the AFL.
Originally published as Secret strategy: Why Essendon will be free agency kings for years to come
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