The Australian Football League has implemented a salary cap on its clubs since 1987, when Brisbane and West Coast were admitted, as part of its equalization policy designed to neutralize the ability of the richest and most successful clubs, Carlton, Collingwood, Essendon (and more recently Hawthorn), to perennially dominate the competition.
The cap was set at A$1.25 million[1] for 1987–1989 as per VFL agreement, with the salary floor set at 90% of the cap or $1.125 million; the salary floor was increased to 92.5% of the cap in 2001, and to 95% of the cap for 2013 onwards due to increased revenues.
The salary cap, known officially as Total Player Payments, was A$13,540,000 for the 2022 season, with a salary floor of $12,863,000.
Both the salary cap and salary floor has increased substantially since the competition was re-branded as the AFL in 1990 to assist in stemming the dominance of newer high-membership clubs such as Adelaide and the West Coast Eagles.
The AFL Players Association negotiates for players with the AFL on the topic of average salary: the current CBA will expire on October 31[when?], with a joint AFL/AFLW CBA to be negotiated from 2023 onwards.[needs update]
In June 2017, the AFL and AFL Players Association agreed to a new CBA deal which resulted in a 20% increase in players salary. The six-year deal, which began in 2017, had the average player wage rise from $309,000 to $371,000 and the player salary cap from $10.37m to $12.45m.
Following cuts to playing roster sizes and football department spending made due to the COVID-19 pandemic, these numbers differed to an extent, with the average AFL player wage in 2022 being $372,225.[2]
The VFL/AFL's salary cap has been quite successful in terms of parity: since the cap was introduced in 1987, each of the 17 teams [3] have reached the Grand Final, and 13 teams have won the premiership.
Another major statistic in regards to the success of the VFL/AFL's cap is that the three richest and most successful clubs, Carlton, Collingwood and Essendon, who won 41 of the premierships between them from 75 Grand Finals [4] in the 90 seasons between 1897 and 1986 (83.3% of all Grand Finals for a 45.6% premiership success rate), have only won six of the premierships between them from twelve Grand Finals in the 36 seasons since [5] (32.4% of all Grand Finals for a 16.2% premiership success rate). Carlton have also not won the premiership since 1995, the third-longest premiership drought in the competition. [6]
Of note in this regard is that Sydney, who mostly struggled in the 50 seasons between 1946 and 1995 (1946 to 1981 as South Melbourne), making the finals on just four occasions in that time (a finals success rate of 8%), had not won a premiership since 1933 and had not appeared in a Grand Final since 1945, have qualified for the finals in 23 of the 27 seasons since (a finals success rate of 86%), playing in six Grand Finals, and winning the premiership in 2005 and 2012.
Originally, the cap was only for the Total Player Payments of each club and not the club's football department. This has caused concern in recent years; for instance, three of the four top-spending clubs played in the Preliminary Finals in 2012 and 2013, and the last team to win the premiership outside the top eight spending teams was North Melbourne in 1999.
There had been calls for a separate cap for the football department, or to reform the salary cap to include football department spending, but these had been opposed by the wealthier clubs, with Sydney CEO Andrew Ireland saying that the AFL needed to examine the gap between football department spending for these teams.[7]
In 2014, the AFL and its clubs accepted a luxury tax on football department spending (excluding the salary cap) to take effect in 2015 and an overall revenue tax to take effect by 2017. Clubs that exceed the football department cap will pay the AFL the lesser of $1 million or 37.5% of the excess, and repeat offenders will pay the lesser of 75% of the excess or $2 million.[8][9]
The AFL salary cap is occasionally controversial, as it is a soft salary cap and therefore can sometimes be slightly different for each club. Clubs in poor financial circumstances (e.g. the Western Bulldogs, North Melbourne, Melbourne) have not always used their full cap, in some circumstances not even reaching the salary floor, to ensure they reduce costs.
The AFL has also used the cap to pursue its policy of supporting clubs in non-traditional markets such as Sydney and Brisbane.
The breaches of the salary cap and salary floor regulations as outlined by the AFL are:
In addition, trading cash for players and playing coaches, formerly common practices, are prohibited in order to prevent wealthier clubs from circumventing the restrictions of the salary cap and salary floor.
Penalties for players, club officials or agents include fines of up to one-and-a half-times the amount involved and/or suspension. Penalties for clubs include fines of up to triple the amount involved ($10,000 for each document that is late or incorrectly lodged or lost), forfeiture of draft picks, and/or deduction of premiership points (since 2003).
As of 2022, no club has been penalised for breaches of the salary floor regulations, and no punishment has included the deduction of premiership points.
Breaches of the salary cap regulations are as follows:
Apart from the AFL, several regional leagues also have salary caps which although widening between them and the AFL and overall less than national competitions, are substantial enough to dictate the movement of semi-professional and professional players between states and the overall playing quality and spectator attendance of the state leagues.
There are a significantly higher number of AFL reserves in the Victorian Football League due to affiliations with Victorian clubs, but player payments for these appearances is apparently not included in the VFL's salary cap.
League | Region | Salary cap (AUD) | Service payments excluded | Average player annual salary | Average salary per game | Highest paid (per year approx) |
---|---|---|---|---|---|---|
Australian Football League | Australia (national) | $12,758,095[30][31] | Yes | $371,000 | $16,860 | $1,200,000[32] |
South Australian National Football League | South Australia | $400,000[33] | Yes | |||
Victorian Football League | Victoria | $220,000 (standalone clubs) $110,000 (AFL and AFL-aligned clubs)[34] |
Yes | |||
West Australian Football League | Western Australia | $200,000[35] | Yes | |||
Tasmanian Football League | Tasmania | $80,000 [36] | Yes | |||
Northern Territory Football League | Northern Territory | |||||
Sydney AFL | New South Wales | |||||
AFL Canberra | Australian Capital Territory | |||||
Ovens & Murray Football League | Victoria/New South Wales |