COLA to be replaced by rent subsidy

[Meg]

I can see a lot of $299,999 contracts in the future.

Yes the problem with any form of means testing - the punitive marginal 'tax' rate at the cut off point.

Also the allowance needs to be indexed or it will rapidly be devalued.

[goswannies]

Can AFL players claim Foxtel IQ as a work related expense due to having to study the opposition? I would also imagine that AFL players could also claim, on their tax, a space in their rented premises needed for, Yoga, Palates and Injury Rehabilitation.

The $290 a week can go a long way.

I don't know if that's a serious question about Foxtel but I wouldn't be surprised. I knew an AFL boundary umpire & he could claim Fox Footy as a work related expense.

[Meg]

Re Franklin - remember that Ireland/Colless emphasised that a significant part of his salary would be paid as an Additional Services Agreement to which COLA is not applied. I've always assumed that this component might represent something like $300,000. A total guess on my part but the emphasis suggested it was not a small figure. Lots of Buddy promotion coming up!

[Auntie.Gerald]

yep 30 sounds about right ludwig on my guess too

25 definitely

i think the average wage is $230k pa ??? in the AFL

[Auntie.Gerald]

i was under the impression in the last few years pre Buddy and maybe pre Tippett we were approx $500k under the cap anyway !

I remember Colless or Ireland saying were 5 to 8% lower then cap to ensure we maintained a profit on the books???

ie so in effect only using $500k of the $1mill bonus ??

[Auntie.Gerald]

so here is a guess for the under $300k pa players

6 Rookies on our list 2014....... PLUS

Membrey
Mitchell
Cunningham
Laidler
Jones
Nanny
Bird
Walsh
Lockyear
Derrickx
Hewitt
Marsh
LRT
Johnson
Aliir
Lloyd
Dick
Rampe
Towers
Brandon

Rohan? Mcglynn? .............only due to when they were signed ie rohan only signed on thru a long term injury and McGlynn wouldnt be much higher then $300k pa after the last couple of seasons is my guess??

so that is 26 to 28 players

from memory Draft Players come on at a $125k pa minimum ??? I could be wrong on that one though.....

[Reggi]

By my calculations, we get around an extra $1m of cap room from the COLA at present.

However, $15K for under $300K players, will only net us about $200,000 of extra cap room.

Thats a significant drop.

I would think the $15k is post tax. As I said though measly compared to the problem.

[Auntie.Gerald]

so if post tax........ and lets say it was 25 players x $15k...... in effect it is basically double for more then half of the $300k pa under players

so that is more like $600k or more vs $1mill

[barry]

I would think the $15k is post tax. As I said though measly compared to the problem.

Why would it be post-tax ?

I would assume its pre-tax.

[Reggi]

If its pre tax its really a payment not a subsidy. I interpreted it as a direct payment subsidy therefore pre tax

Also gift from Paul Keating sports people can average their income over 7 years. I know that is irrelevant

[Ludwig]

I don't think it can be post-tax. The ATO would have something to say about that.

As for the player count. I think next year the pre cola cap will be around 10 mil.

Franklin + Tippo = around 2 mil.

The next 10 (Goodes, Kennedy, Reid, Macca ............) let's say average $400k = 4 mil.

That leaves 4 mill left for the remaining 33 players or around 120 pa. average. All or nearly all would be below 300k.

You just can't make the salary cap unless you've got around 30 players below the 300k mark.

In the future you may find long term contracts structured like 2 million over 5 years -- 4 at 300k + rent allowance followed by 1 at 800k instead of 5 at 400k just to take advantage of the extra 60k.

If the swans play it smart, they should be able to get 35 players on rent allowance for more than $500k extra.

[Meg]

Ludwig, I don't think Franklin + Tippo = around 2 mil next year. If reports correct Franklin getting around $750,000 in 2014 & 2015. Also as I said in an earlier post a significant component is paid as an ASA which is not part of the salary cap subject to COLA.

Re "In the future you may find long term contracts structured like 2 million over 5 years -- 4 at 300k + rent allowance followed by 1 at 800k instead of 5 at 400k just to take advantage of the extra 60k."

Some restructuring might occur but a player/player manager would be considering the time value of money before agreeing to a distortion as big as that I think.

[Ludwig]

Some restructuring might occur but a player/player manager would be considering the time value of money before agreeing to a distortion as big as that I think.

You can put the 800k in the middle year.

Just an example of the kind of thinking that is likely to go one to squeeze as much out of a COLA as possible. Like Mick Malthouse can talk, when Carlton had that shady Visy deal for Judd. And the Tippo deal at Adelaide. When there's money involved, it's amazing how clever people can be or stupid in the Adelaide case. I'm sure there will be some imaginative stuff going on.

The new structure, if true, will remove any advantage the Swans might have had with the present COLA, but I don't think it will leave us at a disadvantage. We will probably have to be a bit more ruthless in cutting aging players. Someone like Shaw might find it harder to get another year when you can replace his salary with a new draftee's. You can get a bit of insight as to why players like Chapman and Pods got cut, even though they certainly had something to offer for another year or so.

At some point Buddy's salary will top a million, but not sure when. I'm still confused on the Tippett deal and whether this has even been made public. Don't know if he's on a 2 year deal of a 4 year deal.

[Meg]

Eddy McGuire has made comments that add to my confusion about what happens to AFL COLA funding for existing contracts beyond 2017. He seems to suggest it will be cut (so presumably to honour the contracts it would have to be paid by the Swans from funds within the salary cap).

"At some stage it was going to be immediately stopping but we just thought it would be fairer to ease it in."

"To be fair to the Swans, they need time to pull it back. To do it in one foul swoop would be too onerous.

"Two years, with this year, there aren't too many contracts over three years, so that should be able to get everyone through."

Eddie McGuire: Swans given a fair go

[Ludwig]

The big issue is with Buddy's contract and whether the AFL is willing to let it ride for the duration. I would imagine the COLA provision was part of the contract, so unclear how it is worded. Is the AFL locked in for the length of the contract. If they have an out, maybe Buddy has to wear it.

PS: I wonder if Eddie really said 'one foul swoop' or its just the journos or copy editor.