AFL slaps trade ban on Swans

[jono2707]

From what I heard, Eddies not to pleased with the idea of Rocket leaving..

Apparently Eddie is carrying on like a banshee about Rocket taking up the GC coaching gig. How ridiculous. Maybe Gillon should tap Eddie on the shoulder and tell him to shut up - his increasingly shrill rantings are surely now bringing the game into disrepute....

[S.S. Bleeder]

Eddie McGuire on May 21, 2014:

"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

It makes sick to the stomach that people like McGuire, Newbold and Fitzpatrick are on the equalisation sub-committee. I would have thought that the main criteria for getting onto committee would have been ampartialability. We know for a fact that neither McGuire nor Newbold possess that and we now doubt that Fitzpatrick does (either that or he is just plain incompetent despite being highly intelligent). This speaks volumes about the result the the VFL wanted to achieve.

[S.S. Bleeder]

Apparently Eddie is carrying on like a banshee about Rocket taking up the GC coaching gig. How ridiculous. Maybe Gillon should tap Eddie on the shoulder and tell him to shut up - his increasingly shrill rantings are surely now bringing the game into disrepute....

Apparently, they're demanding compensation from GC because Rocket was still under contract.

[barry]

How would you people feel if say the bombers get a token fine and thats all and in a few years time are challenging for the flag with james hird as head coach being praised by his mates in the melbourne media whilst the swans, who have done nothing wrong whats so ever, have built an honest culture and one that is lauded by other codes have been engineered to sit mid table for a decade?

Because thats exactly the outcome i can see happening.

Absolutely agree.

The afls protection of drug cheats is doing far more damage to the brand than the swans being succesful is.

No trade bans for them. Its seems likely the kurt tippet was banned from football games for more weeks than the 34 bombers combined.

The AFL will lose me if the essendon players get anything less than 12 months, and hird isnt run out.

[Meg]

I've read both yours and Liz' plans which make total sense, and would have been easy to implement. There has always been the yet unanswered question as to which parties are responsible for paying the COLA portion of contracts already approved by the AFL, and perhaps this is the legal sticking point.

The possible elimination of the COLA must have been an issue when we did the 9 year deal with Buddy. How were the COLA provisions expressed in his contract, particularly in the years toward the end? Since COLA was part of the AFL rules at the time of the contract, it must have been included in the payment amounts for every year. Were there any contingencies written into the contract should the COLA be eliminated?

I would think that the legal obligations regarding COLA in existing multi-year contracts would dictate the post-COLA transition. The AFL may have felt that the Swans entered into long-term contracts to fix the AFL COLA liability beyond what it intended to do. Although it's never been mentioned, the 'rort' may have been (and in particular with Buddy) as seen from the AFL's perspective, that the Swans, anticipating a near term end to the COLA, entered into extraordinary contracts to lock in the AFL's obligation to pay COLA in future years on some contracts of key players. Perhaps this is what the negotiating is about.

Although the Swans never broke the rules by signing Buddy to a 10 mil - 9 year deal, they may have been seen to have exploited the COLA provisions by getting the AFL to subsidise nearly 10% of the contract by extending it over 9 years and the AFL, and particularly Eddie, was not going to buy it.

My feeling is that the AFL is actually legally obligated to pay the COLA portion of contracts already in place for as long as a contract is in effect. But they have forced the Swans into renegotiating these provisions by threat of punishing the Swans if they don't agree to the new rules. Some threats may involve the treatment of the academy. The Swans may be in a good legal position to win this battle, but clearly the AFL has the power to punish the Swans in the long term if they so chose. I don't think the Swans are being timid, as some have suggested, but just being realistic about the situation they are in.

I am trying to read between the lines of McLaughlin's remarks, which seem so hollow and vague. But there may not be much he can say, because the truth may not be what either party want to become public. It appears that his position is (or Eddie's position is) as follows:

1. The Swans knew that the COLA was going to be phased out.
2. With this knowledge, they recruited the game's highest profile free agent by abusing the last year of the existing COLA provisions by having a COLA inclusive contract extending out to 9 years.
3. Although legal under the rules, it was clearly not what the COLA was intended for, but the AFL were forced to approve the deal as they were caught between the free agency player rights as provided under the AFLPA agreement and their own COLA rules.
4. Eddie McGuire goes into meltdown and sets out to get back at the Swans for what he would call a rort of the system.
5. Since the AFL is obligated to pay the COLA, the best they can legally do is follow a Meg/Liz type plan to phase out the COLA over the life of the existing contracts. But this is not enough. Mainly because of Buddy's long-term deal. And perhaps of bit of retribution as well.
6. The AFL had to get the Swans to relieve the AFL of its COLA obligations. But what could they do? They couldn't force the Swans to pick up the tab without their agreement. Therefore, a period of negotiation has been taking place.
7. So far the Swans seem to have agreed to pick up the AFL's long term COLA obligations by receiving a fixed subsidy of $1.4 mil over 2 year plus a rent subsidy allowance coming into place in 2017. But apparently the AFL sees this transition as going too lightly on the Swans, so has imposed some trading penalties to try to even the score.
8. I think the Swans would have accepted the trading limitation for this year, but 2015 would be too harsh, and are thus appealing to the full commission to get the ban lifted for next year.

The problem arises because the Swans are in the legal right, but Eddie doesn't like being made to look the fool too often, and the Swans keep on playing him for the fool that he is.

It's very long winded, but that's my reading of the situation. I'm probably wrong and the right answer is that Eddie is a fool and Gill is an idiot - simple as that.

Ludwig, my understanding (which may be wrong as so much of the COLA payment story is unclear) is that the AFL fund the Swans for COLA and thereby approve an expansion of the total salary cap by the total COLA payment amount. But the Swans pay the COLA (along with the agreed salary, match payments etc.) and are the body which is legally obliged to pay the full contracted amount. So if the AFL withdraws the COLA funding for 2015 & 2016, and so the ability to pay in excess of the salary cap (as they have said they will do if the Swans enter into trades) then the Swans would have to meet the contracted COLA amounts themselves from within the salary cap (e.g.your Reid example). And the total amount of this liability appears to be $800,000 for 2015 and $600,000 for 2016. Which could only be done by trading out (probably) two very good players. So a catch 22: you can trade in a good player but you will have to trade out two good players to do it. That is, there is in reality no choice.

Re Buddy's contract: firstly remember that a "significant" portion of his contract is in the form of an additional services agreement which doesn't attract COLA, so the liability is not 10%; secondly I recall Ireland (or Colless or Pridham, not sure which one) saying words very early in this debate to the effect that the Swans would have to pay the COLA liability (to the extent it exists) for Buddy (and so by implication any other player whose contract extends beyond 2016) once the AFL- funded COLA was abolished.

And also remember that all contracts have to go to the AFL for approval before they are finalised, and Buddy's in particular was heavily scrutinised. So I don't think your theory that the Swans have been engaged in clever manipulation of the COLA system to try to back the AFL into a corner holds up.

I think the explanation is simpler. They announced there would be a two year phase out period with even Eddie saying that it would be unfair to make it immediate given there were contracts that ran beyond 2014. But the specifics of the phasing had not been worked out. There were those who wanted it cut immediately (e.g. Malthouse spoke out arguing this when the phase out was announced). And those people, along with the determination that any good players happy to be traded to Sydney the city would go to GWS not the Swans, caused someone to have this new bright idea. You can have COLA for two years or you can trade and give up players to do so because you will then have to meet your contractual commitments from within the cap.

This is very much a payback for taking Buddy whom the AFL desperately wanted to go to GWS, and probably also Tippett whom they wanted to go to the Suns. The AFL is ensuring the Swans can't do it again in the next two years. A payback for being a successful club attractive to players interested in moving clubs.

And particularly vicious as with Buddy currently in peak form, the next two years are probably our premiership window.

[S.S. Bleeder]

With this knowledge, they recruited the game's highest profile free agent by abusing the last year of the existing COLA provisions by having a COLA inclusive contract extending out to 9 years.

My understanding is that COLA won't apply to Buddy's (or anybody's) contract beyond 2016 so we gained no COLA benefit from signing him for 9 years. Essentially we have to pay the extra 9.8% beyond 2016 if we are contractually obliged to. Can anyone confirm this?

[Meg]

My understanding is that COLA won't apply to Buddy's (or anybody's) contract beyond 2016 so we gained no COLA benefit from signing him for 9 years. Essentially we have to pay the extra 9.8% beyond 2016 if we are contractually obliged to. Can anyone confirm this?

As above that is my understanding. No AFL approved and funded COLA but a contractual commitment for the Swans to pay the equivalent COLA payments as salary under the cap where a contract runs beyond 2016.

[Ludwig]

Ludwig, my understanding (which may be wrong as so much of the COLA payment story is unclear) is that the AFL fund the Swans for COLA and thereby approve an expansion of the total salary cap by the total COLA payment amount. But the Swans pay the COLA (along with the agreed salary, match payments etc.) and are the body which is legally obliged to pay the full contracted amount. So if the AFL withdraws the COLA funding for 2015 & 2016, and so the ability to pay in excess of the salary cap (as they have said they will do if the Swans enter into trades) then the Swans would have to meet the contracted COLA amounts themselves from within the salary cap (e.g.your Reid example). And the total amount of this liability appears to be $800,000 for 2015 and $600,000 for 2016. Which could only be done by trading out (probably) two very good players. So a catch 22: you can trade in a good player but you will have to trade out two good players to do it. That is, there is in reality no choice.

Re Buddy's contract: firstly remember that a "significant" portion of his contract is in the form of an additional services agreement which doesn't attract COLA, so the liability is not 10%; secondly I recall Ireland (or Colless or Pridham, not sure which one) saying words very early in this debate to the effect that the Swans would have to pay the COLA liability (to the extent it exists) for Buddy (and so by implication any other player whose contract extends beyond 2016) once the AFL- funded COLA was abolished.

And also remember that all contracts have to go to the AFL for approval before they are finalised, and Buddy's in particular was heavily scrutinised. So I don't think your theory that the Swans have been engaged in clever manipulation of the COLA system to try to back the AFL into a corner holds up.

I think the explanation is simpler. They announced there would be a two year phase out period with even Eddie saying that it would be unfair to make it immediate given there were contracts that ran beyond 2014. But the specifics of the phasing had not been worked out. There were those who wanted it cut immediately (e.g. Malthouse spoke out arguing this when the phase out was announced). And those people, along with the determination that any good players happy to be traded to Sydney the city would go to GWS not the Swans, caused someone to have this new bright idea. You can have COLA for two years or you can trade and give up players to do so because you will then have to meet your contractual commitments from within the cap.

This is very much a payback for taking Buddy whom the AFL desperately wanted to go to GWS, and probably also Tippett whom they wanted to go to the Suns. The AFL is ensuring the Swans can't do it again in the next two years. A payback for being a successful club attractive to players interested in moving clubs.

And particularly vicious as with Buddy currently in peak form, the next two years are probably our premiership window.

I am trying to come up with some reasonable theory other than a puerile attack on the Swans for signing Buddy. It just seems too absurd to be true.

You may well be right about the AFL funding the Swans COLA portion of contracts, but it would likewise seem that the AFL would be obliged to make those payments to the Swans. The example with Sam Reid illustrates that if the AFL were able to arbitrarily remove the COLA without recourse, the Swans could be forced into a salary cap breach. I know the Reid situation is only similar to a few contracts, but shows that it may not be possible to either trade or delist (without penalty) a contracted player.

Gillon has continued the AFL stance of giving the impression that the Swans abused the COLA, although admitting that they had done nothing illegal. So what is it? Why can't anyone to this day say exactly what the AFL are peeved about?

As far as Buddy's contract goes, everything has been speculation, although I believe you are correct that a significant portion is paid from ASA. But I don't believe the long term COLA effects have been stipulated, at least in public.

And what is the reason that the AFL simply did not implement something along the lines of your phase out plan, which is so straight forward and logical? There is something strange lurking behind the scenes.

This whole thing is just so bizarre.

[Meg]

I have just re-read the AFL Competitive Balance statement of 4 June 2014 re the raft of so-called equalisation changes. It includes the following:

"PHASED REFORM OF THE COST OF LIVING ALLOWANCE (COLA)
? Abolish COLA in its current form for season 2017 for both the Sydney Swans and GWS Giants
? COLA to be transitioned down over 2015 and 2016, taking into account existing contractual obligations so as to not unfairly disadvantage either Club and their contracted players
? New fixed accommodation subsidy to be introduced for newly contracted players (from season 2015) below a salary threshold to be determined, that will be paid directly by the AFL."

So those words suggest that the intent was exactly as I and others have been suggesting should apply. Transition down COLA in the next two years with players dropping out of eligibility and facing the "accommodation subsidy" salary threshold condition in its place as their contracts expire. Nothing in those words suggested the trade ban condition during the two year transitional period.

There have been a stack of players re-contracted during 2014 (e.g. Jarrad McVeigh, Ben McGlynn, Nick Smith, Gary Rohan, Craig Bird, Mike Pyke, Tom Derickx, and probably others I've missed plus we now know that Adam Goodes and Rhyce Shaw will play next year so will need a new contract. No idea how COLA has been handled in their new contracts but the AFL saw them all so could and should have stopped these contracts from including COLA if they thought it was taking advantage of the two year transitional period. The Swans could not afford to wait till the end of the season to plan their player list for the next two years.

AFL statement: Competitive Balance Policy - AFL.com.au

[Ludwig]

Thanks for doing that research Meg. And as you say, there was never anything to suggest that the Swans would incur additional penalties regarding the transition. Yet there is obviously something behind the AFL's decision.

Hate going back to square one.

[Meg]

I've also just re-read this of 16 May 2014 on the Swans website. Note the following words:

"Swans football manager Dean Moore told AFL.com.au the club had frozen ongoing player contract negotiations last month and would not start negotiations with other out-of-contract players until the new COLA rules were announced."

""It's 9.8 per cent at the moment, so if it's cut to 5 per cent, we will have 4.8 per cent less to work with, which is going to impact on the players," Moore said."

So that is consistent with my earlier expressed view that the AFL wanted to cut the COLA percentage in each of the phase-out years but the Swans demonstrated that their contractual commitments to paying 9.8% meant they would have to shed players to do this. So then the AFL dreamt up their new scheme of "you can have 9.8% and keep your players but you can't trade in new players". The "you can't have everything" scenario. With the delicious bonus for the AFL that this means GWS get any good players prepared to come to Sydney.

Swans put contracts on hold over cost of living allowance uncertainty - sydneyswans.com.au

[Meg]

Ludwig, I totally agree with you that "Gillon has continued the AFL stance of giving the impression that the Swans abused the COLA, although admitting that they had done nothing illegal." This has made me really angry as the anti-Swans brigade now claim the AFL have endorsed their long held view of COLA abuse. (Even some of our Roar contributors have recently said the same.)

The words below from the formal AFL statement re the trade ban seem to be effectively saying that in the past the Swans have used COLA to subsidise salaries thereby freeing up salary cap to recruit super stars (the argument continually used on sports blogs). And if not impeded from trading the Swans could do it again over the next two years.

This is arithmetically impossible but I have concluded after this argument has raged all year that the standard of numeracy in the general population is extremely poor. And perhaps that extends to the AFL as well? (Or they have conveniently implied it to reinforce the common view.)


"The Commission stated that the key principle was that the Sydney Swans should use the COLA transition amount to honour existing contracts and not to attract players from other clubs or use that transitional amount to compete with other clubs for the services of players not on their list."

Sydney Swans Statement - Trade Restrictions

[Meg]

Does anyone happen to know what the increase in the salary cap is for next year? As Gill the Pill stated that the 6% COLA would be worth more than the 9.8% this year. Thereby there is no great difference in the phasing out. To me, that actually starts to make sense, as there has to be more implemented for the whingers to stay quiet; it's just that a trade ban, and only access to the SFAs, is far too extreme a measure.

Salary cap for 2015 is $10.07m and for 2016 $10.37m. But where did you get your 6% COLA figure from? I haven't read that anywhere so would be interested to read what was said if you have a source.

[barry]

The cola not only addressed cost of living differences, it also made up for lack of off-field earnings in a non AFL city. We will be disadvantaged without it.

[JPK12]

What an offensive statement.
It is infuriating what the AFL are doing to my team but seeing as I am not a fair weather supporter, I plan on following The Sydney Swans through thick and thin and find it highly insulting of you to call me and anyone else who feels passionately about the team subservient and docile.
Stick with your Western Sydney Wanderers and its hooligan fans, or at least stick with them till the going gets tough for them and you then jump onto the next bandwagon.

What an offensive comment.

With that last statement let me guess, over 60? Because thats what old idiots in australia say when their patch is being threatened or criticised.