AFL-AFLPA CBA negotiations drag on as Grand Final approaches

As key trigger dates for unilateral termination approach, the most recent round of offers in the collective bargaining negotiations between the Australian Football League (AFL) and the AFL Players’ Association (AFLPA) have not yet led to an agreement. The AFL made a substantial ‘final offer’ of AU$1.144 billion in late August, giving the AFLPA until 15 September to respond.  This offer included annual total player payment growth of 11, 5, 3, 3 and 3 per cent, to deliver an average salary of $301,000 in 2016.  The AFLPA rejected the offer, countering with a three-year proposal including annual pay increases of 6, 7 and 7 per cent.  

With a nominal expiry date of 31 October 2011, the terms and conditions of the 2007-2011 CBA remains on foot for now.  Because agreement on a new CBA was not reached by 30 June of this year, either party may now terminate the CBA with 30 days notice, providing that termination does not take effect before 1 November 2011. 

Both parties have indicated they seek to continue positive dialogue, wisely recognising there is more to be lost than won in a fiercely adversarial approach to negotiations.  Contractually at least, the end of the 2011 season (the AFL Grand Final will be played on 1 October) marks yet another key date after which the lack of an agreement takes the parties closer to a more forthright form of industrial action.

 The average salary of AFL players in 2011 is around $236,000; the 17 clubs—excluding special additional allowances for some clubs—each enjoy a $8.21 million Total Player Payments Cap, with a further cap of $537,000 on ‘Additional Services Agreements’ (marketing & promotional contracts).  The competition has expanded to 17 clubs in 2011, with an 18th club to join the league in 2012. A broadcasting rights agreement worth $1.25 billion between 2012-2016 was reached earlier this year.

Key issues in the CBA negotiations, apart from the quantum of the pay increase, have included the AFLPA’s desire to set that quantum as a percentage of total (or defined) competition revenue.  Competing assessments of the player’s share of competition revenue range between a high of 30 per cent in 2001 (AFL calculation) and a low of 21 per cent (AFLPA calculation) in 2007-2009.  This major challenge to the managerial prerogative of the League follows last year’s successful negotiation of a form of restricted free agency (to commence at the end of the 2012 season), as well as disputes over the sum of the ‘top-up’ adjustment payment to the Players following the underestimation of AFL revenue when the fixed sum of annual total player payments were set for the last CBA.  After substantial public commentary from the Players’ Association this year about the players ‘being the game’ and deserving their ‘fair share’; the AFLPA moved away from a claim for a fixed percentage, instead arguing for a fixed annual sum in return for a three-year, rather than five-year agreement.  The AFL has also sought enhanced flexibility in the commercial use of player intellectual property rights.