The Swans shocked the football world last October when they snared Franklin on a $10.2 million deal, with most expecting the Hawk free agent to join the Swans' crosstown rival Greater Western Sydney.
By the last year of his contract, 2022, Franklin will be 36, an age when most key forwards have long since retired.
The AFL did not immediately rubber-stamp the Franklin deal, meeting with the Swans to go through the contract with a fine-tooth comb.
AFL.com.au also spoke recently with a number of clubs who suspected the Swans were prepared to make such a risky play for Franklin, knowing how much the AFL's success in the Sydney market depends on their success.
The clear inference was that the Swans had figured that if the Buddy deal went pear-shaped, the AFL would step in as their white knight.
But Demetriou told AFL.com.au on Wednesday the AFL would not bail the Swans out if the Franklin deal ended up hurting them on and off the field.
Read the full Q&A with Andrew Demetriou
"The (Swans) board has agreed that they know they have to pay the whole consideration in that contract, the AFL will not intervene," Demetriou said.
"They know the rules, they fully understand that all of that contract goes into the cap.
"There will be no special dispensation. There wouldn't be for any club to be honest, but the Sydney Swans are aware of that."
Demetriou said he was concerned about other clubs following the Swans' lead and offering similar long-term contracts, something that the AFL would address with the AFLPA in its collective bargaining agreement mid-term review this year.
The League boss said one solution that had already been "mooted" was putting a cap on contract lengths.
"It's not just because of what happened with 'Buddy' Franklin, but more so about what might happen into the future and how we can stop things from getting out of hand on that front," Demetriou said.
Collingwood president Eddie McGuire led a club-based call for the AFL to scrap the Swans' $1 million cost of living allowance in the wake of them signing Franklin just one year after fellow big-name forward Kurt Tippett.
Demetriou said the AFL had yet to form a view on whether the Swans should retain their cost of living allowance, but stressed it was being reviewed as part of the equalisation debate rather than in response to the Swans' ability to sign Tippett and Franklin.
He said the AFL would make a decision by the end of the year.
In a wide-ranging interview, Demetriou also made the admission that the AFL had "taken our eye off the Brisbane Lions" as they had focused on establishing their intrastate rival Gold Coast.
Demetriou also spoke to AFL.com.au about:
• The AFL's relationship with Essendon in the wake of last year's supplements saga.
• Alastair Clarkson's call for AFL coaches to be accredited.
• Whether equalisation can work without a football department spending cap.
• The AFLPA's push for greater work-life balance for players.
• The Adelaide Oval opening.
• His tips for the 2014 season.
• Watch the video above where Demetriou reveals the AFL Commission is reviewing how the League handled the Essendon supplements scandal.
Twitter: @AFL_Nick
"The (Swans) board has agreed that they know they have to pay the whole consideration in that contract, the AFL will not intervene," Demetriou said.
"They know the rules, they fully understand that all of that contract goes into the cap.
"There will be no special dispensation. There wouldn't be for any club to be honest, but the Sydney Swans are aware of that."
Demetriou said he was concerned about other clubs following the Swans' lead and offering similar long-term contracts, something that the AFL would address with the AFLPA in its collective bargaining agreement mid-term review this year.
The League boss said one solution that had already been "mooted" was putting a cap on contract lengths.
"It's not just because of what happened with 'Buddy' Franklin, but more so about what might happen into the future and how we can stop things from getting out of hand on that front," Demetriou said.
Collingwood president Eddie McGuire led a club-based call for the AFL to scrap the Swans' $1 million cost of living allowance in the wake of them signing Franklin just one year after fellow big-name forward Kurt Tippett.
Demetriou said the AFL had yet to form a view on whether the Swans should retain their cost of living allowance, but stressed it was being reviewed as part of the equalisation debate rather than in response to the Swans' ability to sign Tippett and Franklin.
He said the AFL would make a decision by the end of the year.
In a wide-ranging interview, Demetriou also made the admission that the AFL had "taken our eye off the Brisbane Lions" as they had focused on establishing their intrastate rival Gold Coast.
Demetriou also spoke to AFL.com.au about:
• The AFL's relationship with Essendon in the wake of last year's supplements saga.
• Alastair Clarkson's call for AFL coaches to be accredited.
• Whether equalisation can work without a football department spending cap.
• The AFLPA's push for greater work-life balance for players.
• The Adelaide Oval opening.
• His tips for the 2014 season.
• Watch the video above where Demetriou reveals the AFL Commission is reviewing how the League handled the Essendon supplements scandal.
Twitter: @AFL_Nick
