One-Eyed Richmond Forum
Football => Richmond Rant => Topic started by: one-eyed on June 04, 2014, 04:30:08 AM
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Mid-level AFL clubs unhappy with equalisation plans
Caroline Wilson
The Age
June 4, 2014
The AFL’s historic bid to create an even football competition is facing a mutinous response from at least five middle-level clubs disenchanted in the belief they will be harshly taxed by Gillon McLachlan’s complex equalisation formula.
Fairfax Media understands Carlton, Essendon, Fremantle, Geelong and Richmond have been stunned at learning they will be taxed between $200,000 and $400,000 annually over the next two years compared with the capped $500,000 to be carried by Collingwood, Hawthorn and West Coast.
McLachlan will roll out his new competitive balance formula to the 18 clubs on Wednesday in what looms as a lengthy session at head office, which will also mark Andrew Demetriou’s final day as AFL chief executive.
''The devil will be in the detail,’’ Fremantle chief Steve Rosich said. ‘‘Hopefully the detail won’t be the devil. Hopefully the middle clubs won’t be disproportionate contributors.
"You’d hate to see a disproportionate burden to be carried by a mid-tier club as opposed to a top-tier club.''
Several disillusioned chief executives have pointed out to the AFL that middle-ranked clubs will be the hardest hit, with some being taxed close to 50 per cent of their profits compared with closer to 10 per cent by Collingwood.
Intense lobbying from the wealthy clubs, led by the Magpies, led to the AFL backing down from its original revenue tax equation. Now the 2015 equalisation pool will include club contributions of no more than $4 million and as low as $3 million, although the AFL will top up that amount with money from its club future fund.
The key recipients of the equalisation pool in 2015 will be the Brisbane Lions, St Kilda and the Western Bulldogs, with Melbourne and potentially Port Adelaide and North Melbourne also having money put back into their football spending.
All the clubs facing six-figure taxes have been told the formula has been based on last year’s profits to dissuade - they suspect - any attempts to rewrite revenues.
It is understood the AFL has chosen to tax the clubs on all revenue, including gaming profits. But McLachlan is understood to have been more sympathetic towards fund-raising foundations, such as those being run by Richmond and Sydney and more recently established by St Kilda, which will not be included in club taxable revenues.
Several clubs remain hopeful the AFL will not include player welfare costs in the football department revenue equation, arguing such a move would result in that area of football spending decreased significantly to beat the tax.
The ambition is to allow every club to pay its players 100 per cent of the salary cap. The two expansion clubs, which are still being fully funded by the AFL, are not expected to be included until at least 2017 when the new broadcast rights agreement is struck.
The tax on football department spending will also be capped and only clubs spending more than $9.5million on football outside of its total player payments will be hit. The prevailing view is only Collingwood and West Coast will be taxed, although that money will reach poorer clubs until 2016.
The disillusionment shared by those middle-ranked clubs has been compounded by the belief they were under-represented by the working party that travelled to the US last July to examine the equalisation strategies in American football. Only Richmond’s Brendon Gale was on that trip and subsequent working sessions, compared with stronger representation from the wealthy and poorer clubs.
http://www.theage.com.au/afl/afl-news/midlevel-afl-clubs-unhappy-with-equalisation-plans-20140603-zrwpt.html
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So in Richmond's case based on what Caro has written we will get slugged this "tax" because of our profits which in part are driven by money raised via the FTF :o
:facepalm :facepalm
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So in Richmond's case based on what Caro has written we will get slugged this "tax" because of our profits which in part are driven by money raised via the FTF :o
:facepalm :facepalm
Not according to the article. Those are exempt.
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So in Richmond's case based on what Caro has written we will get slugged this "tax" because of our profits which in part are driven by money raised via the FTF :o
:facepalm :facepalm
Don't stress to much, the discontent from the supporters will mean they will need to find a new source of income in the future = AFL
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So in Richmond's case based on what Caro has written we will get slugged this "tax" because of our profits which in part are driven by money raised via the FTF :o
:facepalm :facepalm
Not according to the article. Those are exempt.
yes they are supposed to be...
but seeing the RFC refuses to tell us year after year how much they raise from the FTF and they clump it under "marketing & sponsorship" revenue in their accounts it may not get an exemption ;D ;)
Then again if I look it another way, we may not get taxed at all if most of our profit continues to come the FTF ;D
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Stalin would be proud.
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Its crazy that top end clubs are capped at 500K. How unprogressive is that? Your rich you only have to pay a small % tax, your middle of the pack you pay more. WTF?
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Well if it goes through whose fault is it?
Ours and the other middle tier clubs
Eddie kicked up a fuss so what do they do? Cap it at 500k
What a joke
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Collingwood, Hawthorn take $1.3 million hit under AFL equalisation measures
Grant Baker and Jon Ralph
Herald-Sun
June 05, 2014
CLUBS will be able to bank salary cap money and use it to lure stars in future seasons under new equalisation measures unveiled by the AFL.
About 10 clubs will be effectively taxed a maximum of $500,000 based on their revenue over the next two years, while some clubs could be slugged further if they choose to exceed a soft cap on football spending in 2015-16.
Also confirmed was the abolition over the next two years of the Cost of Living Allowance for Sydney, although it came as a surprise that GWS will have that allowance replaced by a rental assistance scheme aimed at lower-earning players.
The veterans’ list allowance will be phased out over 2015-16.
Collingwood, West Coast and Hawthorn will have their distribution from the AFL cut by $500,000 and must also fund increases in total player payments to players of $150,000 a year over the next two seasons.
That pay rise for players is on top of the 3 per cent increase that had been written into their current Collective Bargaining Agreement as a baseline, and means their pay will go up by about 5 per cent a season overall, sitting at $10.7 million next year.
A further seven clubs — including Carlton, Richmond, Geelong and Fremantle — are also likely to have their funding reduced by the AFL.
The salary cap banking measure, which will come into effect immediately, will mean a club that is spending $600,000 under the cap this year could spend an extra $1.2 million next year, or in 2016.
New AFL boss Gillon McLachlan said the mechanism gave poorer clubs a better chance to retain or attract players when the new equalisation measures kicked in, and their businesses improved.
“When six of our clubs are spending 95 per cent of our salary cap, that is a challenge, so what the banking mechanism says is even if one year (a) club can’t spend 100 per cent (of the TPP) … if they can turn their business around (it gives) them the opportunity to retain players and pay them what they should have been paying by paying overs for a period of time,” McLachlan said.
The AFL is yet to finalise the soft cap in football spending, but it will be the projected 2015 industry average spend plus $500,000.
As a guide, the average football spending excluding player payments in 2013 was about $10.3 million.
Clubs that spend above the cap will be taxed 37.5 cents in the dollar in 2015 and 75c in 2016.
Club figures have told the Herald Sun that the caps to the effective revenue and football spending taxes have severely limited the amount of money that will be redistributed from the rich clubs to the poor, but the AFL will increase funding to disadvantaged clubs from the Club Future Fund.
To qualify for extra funding clubs must satisfy the league they are hampered by structural inequities and have fewer growth opportunities but are being well managed. They will have their financials scrutinised and will not be eligible for funding unless their revenue is below the competition average and they are not spending above the footy spending cap.
AFL chairman Mike Fitzpatrick said: “the AFL’s strengthened competitive balance measures have been introduced because the financial gap between our big and small clubs continues to grow and the capacity of many clubs to invest in their football departments and to grow other elements of their respective businesses is challenged”.
Hawthorn president Andrew Newbold said the equalisation working party had fulfilled its aims — despite criticism from various quarters.
“I have said this to our people, from a Hawthorn point of view it’s not a truly desirable result, but from a whole-of-competition mindset it’s exactly the right thing to do.
“The thing to bear in mind is we will also fund the $150,000 uplift in the salary cap, so the net result for Hawthorn is we are $1.3 million worse off over two years.
“I heard the view of people in middle and lower-ranking clubs that they would like more. But it is costing Collingwood, West Coast and Hawthorn $1.3 million over two years. We have had our tough times ourselves. So it’s a good result for the industry and it wasn’t easy because it took a lot of robust discussions.”
St Kilda chief executive Matt Finnis said the steps taken by the league “indicate the game is moving in the right direction”.
It’s understood some clubs still believe they are unfairly taxed, although Richmond was mystified about suggestions it had been shocked by some of the measures, given CEO Brendon Gale is a member of the working party.
The AFL is yet to sign off on exemptions from the football department cap, which could include welfare staff, travel and some recruiting budgets.
Fremantle chief executive Steve Rosich said the Dockers would continue to lobby on excluding travel from the cap.
“We understand and agree in principle with what the AFL is seeking to implement. We are continuing our conversations on what some of the exclusions from non-player footy costs which includes travel. We also have concern over the relativities in financial costs between some clubs.”
West Coast Eagles chief executive Trevor Nisbett said there were still many details to finalise: “The working party are still working through it. It is what it is. We’ve agreed to the principles but there are some details to come and that will happen down the track.”
And Port Adelaide chief Keith Thomas forecast further changes as the effects of the measures became apparent.
“We agree with the principles and need for competitive balance. A lot of hard work has gone into this important project and we think the outcomes are fair. No doubt the industry will continue to refine them as we develop more insight as to how effective these measures will be,’’ he said.
AFL Players’ Association boss Ian Prendergast said he was pleased the players had been recognised with what will be a greater share of football spending.
“We welcome the announcement of the key principles today and hope that they continue to underpin what the AFL are doing to achieve competitive balance, together with the notion that every team has the chance to win on any given day,” Prendergast said.
http://www.news.com.au/sport/afl/richmond-skipper-trent-cotchin-backs-teammates-to-turn-around-fastslipping-season/story-fndv8t7m-1226943388530
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Lol salary cap banking. So the Hawks with a massive hole in their salary cap when Franklin left will have an absolute war chest at the disposal for next year. The crap clubs don't pay the max cap because they can't afford it. Just another rort for clubs like Geelong, Hawks and Collingwood to miraculously get their Caddys, Gunstans and Adams.
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Why doesn't the afl look at facebook likes? We are a minnow apparently and Hawks, Blues, Bummera, Weagles and Pies should pay the most. We can pay as much as Melbourne and GWS because we have no supporters
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Hey Peggy Sue...now would be a good time to actually come out and say something....
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Serious question. I'm an MCC member and only buy an RFC membership as a donation really (I don't actually use it) Why should I keep buying one when the money will go to funding Sydney and GWS etc
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Take out a loan -
Pay big for a clarkson Lyon Hinkley Scott ....
Money will come back under the communist carnival
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Hey Peggy Sue...now would be a good time to actually come out and say something....
Yessss :clapping
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We could have been in such a good position now if the club hadnt wasted so much money on the likes of Hampson, Chaplin, Grigg and company. What a stuffen waste.
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And theyll probably stay on the list for the next 3-4 years, on similar wages, just to save face for those who recruited them.
Meanwhile, the youngins formative years will be compromised by the examples set by these ponies who turn up but dont buy into the club, and 5-6 less places is the team to get gametime.