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Volume 6 No. 212

Leagues and Governing Bodies

Australian Football League CEO Andrew Demetriou said that a luxury tax on football department spending would probably put a handbrake on the rate of growth in this area. The AFL is currently working on a new revenue-sharing model to level the playing field between the league’s big spenders and its financially struggling teams. "[Clubs] are spending at such a rate that we need to find a mechanism to almost disincentivize them from doing that," Demetriou said. The AFL implemented a salary cap in ’87. However, the league’s salary cap, which is a soft cap, limits only the total player payments of a club and not its complete football department spending. This has led to calls for a separate cap on football departments or an overhaul of the league's salary cap in recent years. Demetriou said, "When you got a salary cap and clubs can’t spend any more on their players, they'll spend elsewhere on their football to get a competitive advantage." He told SBD Global that the process of reforming the league’s revenue sharing has been going on for 12 months so far, and there is still more work to do. In order to find the best possible solution for its equalization efforts, the league has gathered information on salary caps and revenue-sharing models from various int'l leagues, in particular U.S. leagues. Demetriou said that the AFL has collected information from the NFL, MLB and the NBA to get an understanding of how their revenue-sharing models work. All three leagues use different types of salary caps: the NFL is using a hard cap; MLB has a luxury tax; and the NBA is using a luxury tax in addition to a soft cap. While comparing and evaluating the various models, the possibility of introducing a luxury tax of some sort has gained support within the league and its stakeholders. “One thing that has certainly emerged, which has got a lot of support, is a luxury tax on football department spending other than players,” Demetriou said.

TALKS CONTINUE: Demetriou added that nothing has been finalized yet and talks about equalization measures continue. The AFL has set up a working group, which includes club presidents and CEOs and works in association with the league. The working group tries to come up with options and financial models and acts on behalf of the industry. "Our objective is to try and have something finalized by mid-year for introduction in 2015," Demetriou said. The final decsion on the issues lies with the league's independent board, the AFL Commission.

As influential Australian Football League figures "met in Adelaide to address a growing financial inequity between clubs considered the competition’s greatest concern came revelations the code is wealthier than ever before," according to Walsh & Denham of THE AUSTRALIAN. AFL Commission Chair Mike Fitzpatrick on Tuesday announced a record revenue of A$446M for '13, with those responsible for the bottom line "also reaping individual benefits." A string of bonuses associated with his stewardship of key platforms including the A$1.25B broadcast deal, two new expansion clubs and the successful resolution of the collective bargaining agreement saw AFL CEO Andrew Demetriou earn A$3.8M. Demetriou "is not alone in sharing the spoils, with his heir-apparent Gillon McLachlan among a 13-member executive team that was paid salaries and bonuses" in '13 totaling A$6.8M. The downside is that 10 clubs "reported financial losses." Of the eight clubs recording profits, five topped A$1M (THE AUSTRALIAN, 3/5). In Melbourne, Baker & Timms reported the boom in exec pay came on the back of record A$446M revenue for the AFL, up A$18M from '12, which was detailed in the AFL’s annual report released by the league Monday night. The report "also details an increase in funding to clubs" -- up 5% to A$209M, including funding for expansion clubs Greater Western Sydney and Gold Coast of A$20.2M. Players "also benefited from a healthy increase in payments," up 6.8% to A$197.5M (HERALD SUN, 3/4).

NEW JOB OFFERS: The AAP reported Demetriou said that he is "considering a number of job offers, the most recent of which came shortly after he announced his resignation." Demetriou also revealed that "he took his children's iPads and iPhones away to prevent them leaking the news of his departure at the end of the 2014 season before his media conference on Monday." He said, "I've got a couple of things that I'm looking at. I've got to work. I've got four children at school. I want to be waving goodbye to the children in the morning, not them waving goodbye to me." Demetriou "would not elaborate on what that offer was." He said, "I'm not telling you. It might've been morning radio!" Demetriou said that he "did not really want to remain in sports administration, reiterating his interest in joining the board at James Packer's Crown Entertainment" (AAP, 3/4).

NO MORE ALLOWANCE: In Sydney, Buckle & Larkin wrote the AFL said that "it will phase out" the Sydney Swans' allowance, while "also pursuing a cap on spending in football departments of all clubs." Swans Chair Andrew Pridham "was disappointed at the phasing out of the allowance, which gave his club additional money in its salary cap compared to rival clubs." Pridham "rejected suggestions the Swans had used the money," some 9.8% more than rivals, "to lure highly-paid recruits such as Lance Franklin and Kurt Tippett." He said in a statement, "The club has used the allowance for its intended purpose -- to provide all players on our list compensation for the higher costs associated with living in Sydney" (SYDNEY MORNING HERALD, 3/4).

ON THE ATTACK: In Melbourne, Will Brodie reported Collingwood President Eddie McGuire "has attacked some fellow AFL clubs, saying it was time for them to 'stop cheating,' and 'burning the competition to the ground every other year.'" He said, "It's time for a few clubs to pull their heads in and start putting into the competition. I’m not just talking about the poorer clubs, I’m talking about some of the middle-ranked clubs who ... should be doing better." McGuire said that "the slate would probably be wiped clean for recent transgressors." He said, "But the next team that cheats and the next administration that does it, they should be be put in the city square and flogged" (THE AGE, 3/4).

BUDGET CAP: In Melbourne, Ralph & Timms reported AFL clubs Hawthorn and Collingwood "will accept a football department luxury tax that could hit them with a 75 per cent levy for every dollar they spend over a set mark." And an overall revenue tax "will also be applied on a sliding scale," with a ceiling of A$500,000 for wealthy clubs. The details "are still to be ­finalised," but the football ­department tax could kick in at A$8.5M-A$9M. The tax calculations exclude the A$10M player salary cap (HERALD SUN, 3/4).

NEW CHALLENGES: The AAP wrote AFL Players' Association CEO Matt Finnis "faces one of football's biggest challenges in April when he takes over" as St. Kilda's CEO. The club's Seaford training base "is far away from the city, hopes for an on-field surge back up the ladder this year are similarly remote, and changes are coming thick and fast at the club" (AAP, 3/4).

Andre Agassi "will snub" the inaugural Int'l Premier Tennis League (IPTL) if it "clashes with Thanksgiving," according to Martyn Herman of REUTERS. Agassi was named in Sunday's "player draft for the new Asia-based event but said he had since learned the first match would clash with the November holiday." Agassi said, "My agreement to do it was based on a few very specific conditions. Certainly economics played a little part in it but also time away played another part. I can't be away for more than four or five days so I set some limitations and had some dates in December. Now I read in an email that the dates are over Thanksgiving. That would be a non-starter for me. Six or seven days away is too much of a price to pay." Herman noted the draft for the IPTL, organized by former doubles player Mahesh Bhupathi, "saw the four teams -- Singapore, Dubai, Bangkok and Mumbai -- bid for players." Organizers said that a total of $24M "was spent" (REUTERS, 3/3).

UNKNOWN IDENTITY: In London, Paul Newman reported the IPTL "has so far declined to reveal even the identities of the team owners," who between them are said to have committed to paying a total of nearly $24M at an average of more than £500,000 ($833,000) to each player. Agassi said that "he did not know the identity of the owner of his Singapore team." Leading players "have complained for years about the shortness of the off-season." Now it has been lengthened to seven weeks for men and 10 weeks for women, there have "inevitably been murmurings about the fact that some are using the extra time to play in lucrative exhibition matches." Agassi, when asked if he would have committed to the IPTL during his playing days, said, “It’s different now, the season ends early November. I didn’t have that luxury because I took that time away to prepare for Australia." Sampras said the offseason had been so short in his day that he had “barely enough time” to prepare for the Australian Open. Sampras: “The schedule’s a little shorter these days, [it] gives the guys an opportunity to play a few exhibitions, make a few extra bucks." He added, “We all know they need it, so if someone’s dumb enough to pay them, they’d be dumb not to take it” (INDEPENDENT, 3/3).

The 53 football clubs that form the Spanish third division, except for clubs affiliated with La Liga and second division sides, have "formed a working group of 11 club representatives with a mission to 'give value' and 'make profitable'" a category affected by the economic crisis and "peculiarities in its scheduling," according to Conrado Valle of AS. Three weeks ago, "the clubs all met in Madrid to establish the foundations of the project." The group's "first meeting was scheduled for Tuesday." Among the objectives, "a change to the current competition format was not ruled out." Huracán Valencia President Toni Hernández, one of the 11 representatives, said, "The priority is to find a way for the product to sell better." One proposal that will be presented to the Spanish Football Federation (RFEF) and the Spanish Footballers' Association (AFE) will "request an exclusive hour during weekends that would be designated for third division games." This would not "mean that all games would be played at the same time, but it would guarantee that every weekend, some games would clash with neither La Liga nor the second division." The group is "also looking to define the third division's profile." It is currently "considered semi-professional -- teams have to have at least six professional players." The "idea is to become either fully professional or be given amateur status" (AS, 3/4).

The Indian Government on Tuesday "reiterated that it will not be able to provide security to this year’s Indian Premier League as its dates clash with general elections." Home Minister Sushilkumar Shinde said, “We have conveyed to the BCCI that we will not be able to provide security to IPL matches. Our forces will be deployed for security of Lok Sabha elections. So, how we can give them forces" (PTI, 3/4). ... The in-fighting, claims and counterclaims by various warring factions in Indian boxing forced the Int'l Amateur Boxing Association (AIBA) "to provisionally annul the membership of the Indian Amateur Boxing Federation." The committee took the decision after "extensive evaluation and assessment of all issues surrounding the sport of boxing in India." The decision "was taken in accordance with article 18.2 of the AIBA Statutes" (MUMBAI MIRROR, 3/4). ... President of Asian Athletics Association Dahlan Al Hama said that youth development programs in schools and a new marketing strategy "will make Asia the future of athletics." He said, "Yes, the future of athletics is Asia. Definitely you have to say this. We already have Olympic champions from Asia. Our ambition is to have more" (THE PENINSULA, 3/4).