CLUBS will be encouraged to spend extra dollars on players under a radical new player payments scheme that allows clubs to pay over 100 per cent of the salary cap if they underspend the previous year.
The banking scheme was the most innovative measure introduced as part of the AFL's competitive balance policy announced on Wednesday.
The AFL says the system will enable clubs who turn their financial fortunes around to retain players and catch up with other clubs by managing their player payments system better.
Under the new 'banking' system clubs will be allowed, for instance, to exceed the competition's total player payments (TPP) and additional service agreements (ASA) limit by a maximum five per cent in 2016 if they spend under 100 per cent of the salary cap in 2015 under a new measure introduced as part of the AFL's new competitive balance policy.
The permitted amount clubs will be allowed to spend on its players will need to be commensurate with the amount clubs spend under 100 per cent of the TPP and ASA in the preceding period.
It means if a club is $400,000 below the maximum player spend in 2015, it would be able to spend up to $400,000 over the limit in 2016.
The system will be introduced immediately meaning that clubs which paid under the 100 per cent limit in 2014 will be able to pay over the limit, if they have the capacity, next year.
CEO-elect Gillon McLachlan said the banking mechanism was an acknowledgement that if weaker clubs are given an extra dollar, the best way to spend that money was to spend it on players.
He said it was recognition that the players had been constrained during a period when non-player spend in football department accelerated at a rate of 10 per cent per year for the past 10 years.
"When six of our clubs are spending 95 per cent of our salary cap, that is a challenge, so what the banking mechanism says is even if one year [a] club can't spend 100 per cent [of the TPP] … if they can turn their business around [it gives] them the opportunity to retain players and pay them what they should have been paying by paying overs for a period of time," McLachlan said.
The other main surprise in the announcements was that Greater Western Sydney would be subject to the same reform in the cost of living allowance (COLA) as the Sydney Swans.
COLA will be transitioned down in 2015 and 2016 to take into account existing contractual obligations. The new system means a fixed accommodation subsidy introduced for newly contracted players from 2015 below a salary threshold that is still to be determined.
That accommodation subsidy will be paid directly by the AFL.
Under other measures introduced as part of the competitive balance policy:
- a soft cap will be introduced on football department spend, and set at the "projected industry average spend plus $500,000" in 2015 and increase according to inflation in 2016. Clubs exceeding this limit will be taxed by the AFL at 37.5 per cent in 2015 and 75 per cent in 2016.
- luxury tax payments will be capped at $1 million per club per annum for 2015 and 2016.
- the veterans allowance will be retained at $118,000 per eligible player in 2015 and 2016 before being removed from 2017
- TPP will exceed $10 million for the first time, sitting at $10.07 million in 2015 and $10.37 million in 2016.
AFL Chairman Mike Fitzpatrick said the competitive balance policy will be reviewed in 2017.
"At the heart of these measures is the fans' experience; a determination to ensure each club has the on-field capacity to compete and potentially win each week," he said.
