The Power to compete

The Power to compete

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In the NFL they call it Any Given Sunday, in Major League Baseball its called hope and faith and in the AFL it might be called the power philosophy.

In short, all of these concepts refer to the ideology that at the start of every season and on any given Sunday a sports fan should have hope and faith that their team has a realistic chance of making the finals.

In the AFL, the success of the Port Adelaide Football Club this year best represents this principle. After finishing in second-last place in 2012 only its most ardent supporters would have hope and faith Port could rise to play in the finals.

The reality is, there have been very few teams in the last decade  do what Port have done. Very seldom have we seen a team surge up the ladder in a single season. They are the exception to the normal.

One of the very few is West Coast who after finishing sixteenth with only four wins in 2010 rose to finish fourth the following year and just one win away from reaching the grand final. But in 2011 West Coast had the highest football department budget in the competition.

AFL Players’ Association CEO Matt Finnis believes in a healthy competition all clubs must have the ability to transform themselves self from cell-dweller to finals contenders in a short timeframe; the concept of ‘bottoming out’ should be redundant.

Finnis recently returned from a fact-finding mission to the United States as a part of a delegation comprised of key industry stakeholders.

It met with representatives from the Major US sporting bodies including the National Football League (NFL), Major League Baseball (MLB) andNational Basketball Association (NBA) as well as some professional team owners on the week-long tour.

The purpose of the trip was to gather intelligence on how these sporting bodies maintain the Any Given Sunday philosophy, in response to the growing gulf between the have and have not’s in the AFL and the strengthening correlation between football department spend and on-field success.

Finnis said the touring party, which was comprised of representatives from the AFL, including CEO Andrew Demetriou and AFL clubs, was aligned in their motivations on the “bigger picture”, in terms of how to maintain the health of the game, but there was certainly debate in how that is actually achieved.

Various formulas of revenue sharing, expenditure limitations, qualifications and distributions were presented and discussed. While no one sport provides an exact fit given the vastly different climates AFL and the US sporting codes operate within, the discussion gave birth to various “equalisation levers” that could be employed in various combinations within the AFL

According to Finnis, it was instructive that each of the US sporting codes chartered the history of its equalisation in conjunction with their history of the collective bargaining with its players.

Feedback on the need to balance the equalization levers placed on the players and the game, was a constant. Currently in the AFL the most influential measures of equalisation are restraints on players, such as list size limits, the drafts, a hard salary cap and limited free agency.

“The inextricable link between the role of a salary cap and the need for mature revenue sharing mechanisms was highly evident in the conversations that we had.”

“The inextricable link between the role of a salary cap and the need for mature revenue sharing mechanisms was highly evident in the conversations that we had.”

Another outcome of the visits with the US sporting bodies was to discuss the percentage of revenue franchises commit to their players. In most NFL franchises approximately 85 per cent of the team’s football budget is applied to player salaries, whereas in AFL, some clubs are currently spending less than half of their football expenses on the primary asset which determines on-field success.

Finnis talked to an example of how pooling more revenues across all clubs can be used to provide greater financial support to those clubs which are disadvantaged by fixturing and stadium allocation decisions taken by the League.

“The US sports talk about the “indispensable contributions that visiting teams make” and recognize that the Yankees would not be a financial powerhouse were it not for the competition provided by all teams – including those from smaller cities.”

“This principle forms the basis for sophisticated revenue sharing principles which not only promote competitive balance, but also underpin the integrity of restraints in players such as salary caps.”

“Essentially the owners of the teams have recognized they are partners in a common enterprise and therefore it is appropriate that they have an interest in the health of the other teams. And as a result of that philosophy, the NFL projects that by 2017, up to 70 per cent of the total revenue derived by the league and its clubs will be shared equally.”

Finnis said the natural response from some wealthy clubs was to ask whether high levels of revenue sharing had resulted in a disincentive for teams to optimise revenues.  But using the MLB as an example, where approximately $350million is shared each season the fact that local club revenues have risen by 8 per cent per annum, despite the global financial crisis, indicated this concern has not been borne out in practice.

The intelligence gained from the US tour will be used by the AFL’s working party to determine which equalization ‘levers’ should be pulled to create a more even playing field and combat some of the structural and historical inequalities that currently exist.

While every team, each year might not have a realistic chance of winning the premiership, every team should have hope and faith it can make the finals. Only one team can experience the ultimate, but as Port fans will attest, it’s still a hell of a ride.