AFL recommendation on salary caps and player payments

15th April 2020

Background

The COVID-19 pandemic is one of the biggest challenges to face football.

On the 17th March, it was announced that all AFL and AFL State association managed or operated
leagues would be postponed until 31st May 2020. It was also strongly recommended that
independently governed leagues and associations postpone the commencement and/or operation of
their leagues/associations until the same date.

Following a series of recent meetings involving the AFL and all State and Territory CEOs, and State
football operations representatives, recommendations have been made in relation to salary caps
and player payments in community football to help ensure the survival and ongoing sustainability of
community football clubs in 2020 and beyond. These recommendations have been made whilst
considering feedback from various country and metropolitan leagues across the country.

These changes are part of a broader AFL industry response to the COVID-19 pandemic, to reduce
Community Club costs in line with reduced revenues, to ensure the sustainability of our Community
Clubs and our code into the future.

Recommendation

It is recommended that all leagues adopt a two-stage reduction to current Allowable Player Payment
(APP) caps for the 2020 season:

▪ Stage one: a 50% reduction on current APP caps for the 2020 season

▪ Stage two: a further Pro Rata reduction based on the number of matches re-fixtured,
relative to the original number of fixtured matches.

▪ Example: where a competition has a $100,000 APP, that would be reduced to $50,000 under
stage one reductions. Further, if 9 matches are re-fixtured from an original 18 matches for
the 2020 season (i.e. a 9 match reduction), a further 50 % (9/18) reduction to the reduced
APP cap will be applied resulting in a revised APP of $25,000 for the 2020 season.

It is important to note that the APP caps are not an aspirational nor required spend, and clubs are
able to continue spending below the designated APP cap for their relevant competition.
At this stage, due to the anticipated financial impact on community clubs for years to come, we are
proposing that there will be a reduction in the APP that will be carried through into the 2021
season. This position will be reviewed and confirmed later in 2020, as the impact from COVID-19
becomes apparent.

We understand that this is an uncertain time for everyone in our game, but we appreciate the
football Community working together to ensure our Community Clubs are sustainable into the
future.

If you have any questions about how your league is applying this national recommendation, please
contact your League and / or your State or Territory body.

Please also find enclosed a series of frequently asked questions.

Andrew Dillon
AFL General Counsel / General Manager – Game Development
FAQs

Do we need to re-negotiate the Standard Player Declarations (SPD) with each player?

Yes, clubs will need to re-negotiate all standard player declarations. In other words, clubs cannot
unilaterally reduce all player declarations without offering a revised offer which is considered and
agreed to by the player.

Once player and club agree to terms, there are two options:

1. Sign a new Standard Player Declaration which includes a statement outlining that the new
Standard Player Declaration supersedes any prior agreement between the Club and the
Player for Player Payments for the 2020 season; or

2. Adjust the existing Standard Player Declaration by crossing out old match payment amounts
and adjusting to new match payment amounts and both the player and the club initialling
every change made to that declaration.

What if players don’t agree to a revised player payment?

Clubs are encouraged to explain the challenging financial position clubs are faced with including the
significant impact expected in revenue (including anticipated impact on sponsorship, fundraising,
match-day (gate, bar, canteen) and membership revenue). This is one of the biggest challenges to
face football and players are encouraged to play their part to ensure the sustainability of community
clubs.

If a player is not willing to re-negotiate and play for a reduced payment the club can elect not to pick
that player for matches to ensure they remain under the revised APP cap for the 2020 season.

What if we don’t use the AFL Standard Player Declaration?

For any club that did not use the AFL Standard Player declaration and instead use an alternate
document to formalise arrangements with any player, it is suggested that the club seek its own
advice on these arrangements.
How will sign on fees or fixed payments be treated under the revised Allowable Player Payment
cap?

Clubs are reminded that sign on fees for players continue to be discouraged, along with any type of
fixed payments to players (e.g. payments not aligned to the playing of games). These payments will
need to be included under the revised Allowable Player Payment cap.

Clubs should negotiate Standard Player Declarations for the remainder of the 2020 season taking
into consideration any sign-on fees or fixed payments already paid to the player.

What if there are no fixtured matches in the 2020 season?

Under the recommendation for a two-stage reduction of APP caps, should there be no fixtured
matches in the 2020 season, a zero APP cap for all competitions for the 2020 season will result.

Should clubs have paid any fixed type payments to player, they should contact their league to seek a
concession for the 2020 season.

When are clubs required to lodge their player declarations and total team budgets?

It is encouraged that amendments are made to the lodgement dates for any documents required
from clubs under the APP framework to require lodgement of these documents within 10 Business
days of the first game of the season (replacing any existing deadline impacted by the current season
postponement).

What should we do with our coaching payments?

In regard to Coaching Payments, Clubs are encouraged to renegotiate any Coaches remuneration to
reflect the reduced number of matches this season, mindful that all parties are part of the process to
assist with navigating the current financial pressures being faced by community football.