AFL salary cap


The Australian Football League has implemented a salary cap on its clubs since 1987, when Brisbane and West Coast were admitted, as part of its equalization policy designed to neutralize the ability of the richest and most successful clubs, Carlton, Collingwood, Essendon and Hawthorn, to perennially dominate the competition.
The cap was set at A$1.25 million for 1987–1989 as per VFL agreement, with the salary floor set at 90% of the cap or $1.125 million; the salary floor was increased to 92.5% of the cap in 2001, and to 95% of the cap for 2013 onwards due to increased revenues.
The salary cap, known officially as Total Player Payments, is A$13,000,000 for the 2019 season with a salary floor of $12,350,000.
Both the salary cap and salary floor has increased substantially since the competition was re-branded as the AFL in 1990 to assist in stemming the dominance of new high membership clubs such as Adelaide and the West Coast Eagles.
Certain payments are excluded from the cap, and concessions are available for some players, in particular "veteran" players who are discounted by 50% for purposes of the cap, depending on the number of these players at each club.
The AFL Players Association negotiates for players with the AFL on the topic of average salary. In June 2017, the AFL and AFL Players Association agreed to a new CBA deal which resulted in a 20% increase in players salary. The six-year deal, which begins in 2017 and ends in 2022, means that the average player wage rises from $309,000 to $371,000 and the player salary cap from $10.37m to $12.45m. In 2022, the average player wage will be $389,000 with a salary cap of $13.54m.

Success of the cap

The VFL/AFL's salary cap has been quite successful in terms of parity: since the cap was introduced in 1987, each of the 17 teams have reached the Grand Final, and 13 teams have won the premiership.
Another major statistic in regards to the success of the VFL/AFL's cap is that the three richest and most successful clubs, Carlton, Collingwood and Essendon, who won 41 of the premierships between them from 75 Grand Finals in the 90 seasons between 1897 and 1986, have only won six of the premierships between them from twelve Grand Finals since .
Of note in this regard is that Sydney, who mostly struggled in the 50 seasons between 1946 and 1995, making the finals on just four occasions in that time, had not won a premiership since 1933 and had not appeared in a Grand Final since 1945, have since qualified for the finals in 20 of 24 seasons and played in five Grand Finals, winning the premiership in 2005 and 2012.

Football department cap

Originally, the cap was only for the Total Player Payments of each club and not the club's football department. This has caused concern in recent years; for instance, three of the four top-spending clubs played in the Preliminary Finals in 2012 and 2013, and the last team to win the premiership outside the top eight spending teams was North Melbourne in 1999.
There had been calls for a separate cap for the football department, or to reform the salary cap to include football department spending, but these had been opposed by the wealthier clubs, with Sydney CEO Andrew Ireland saying that the AFL needed to examine the gap between football department spending for these teams.
In 2014, the AFL and its clubs accepted a luxury tax on football department spending to take effect in 2015 and an overall revenue tax to take effect by 2017. Clubs that exceed the football department cap will pay the AFL the lesser of $1 million or 37.5% of the excess, and repeat offenders will pay the lesser of 75% of the excess or $2 million.

Criticism of the cap

The AFL salary cap is occasionally controversial, as it is a soft salary cap and therefore can sometimes be slightly different for each club. Clubs in poor financial circumstances have not always used their full cap, in some circumstances not even reaching the salary floor, to ensure they reduce costs.
The AFL has also used the cap to pursue its policy of supporting clubs in non-traditional markets such as Sydney and Brisbane.

Breaches

The breaches of the salary cap and salary floor regulations as outlined by the AFL are:
In addition, trading cash for players and playing coaches, formerly common practices, are prohibited in order to prevent wealthier clubs from circumventing the restrictions of the salary cap and salary floor.
Penalties for players, club officials or agents include fines of up to one-and-a half-times the amount involved and/or suspension. Penalties for clubs include fines of up to triple the amount involved, forfeiture of draft picks, and/or deduction of premiership points.
As of 2019, no club has been penalised for breaches of the salary floor regulations, and no punishment has included the deduction of premiership points.
Breaches of the salary cap regulations are as follows:
Apart from the AFL, several regional leagues also have salary caps which although widening between them and the AFL and overall less than national competitions, are substantial enough to dictate the movement of semi-professional and professional players between states and the overall playing quality and spectator attendance of the state leagues.
There are a significantly higher number of AFL reserves in the Victorian Football League due to affiliations with Victorian clubs, but player payments for these appearances is apparently not included in the VFL's salary cap.
LeagueRegionSalary cap Service payments excludedAverage player annual salaryAverage salary per gameHighest paid
Australian Football LeagueAustralia $12,758,095Yes$371,000$16,860$1,200,000
South Australian National Football LeagueSouth Australia$400,000Yes
Victorian Football LeagueVictoria$300,000Yes
West Australian Football LeagueWestern Australia$200,000Yes
Tasmanian Football LeagueTasmania$80,000Yes
Northern Territory Football LeagueNorthern Territory
Sydney AFLNew South Wales
AFL CanberraAustralian Capital Territory
Ovens & Murray Football LeagueVictoria/New South Wales