The AFL finally has their shiny new broadcast rights deal. On Tuesday afternoon it was announced that the incumbent duo, channel 7 and Foxtel have retained the rights to broadcast AFL and AFLW matches. For this privilege between them they will pay $4.5 billion over 7 years starting in 2025 with Foxtel bearing the cost of roughly 60% of it. It works out to a total of $642 million per year. For the sake of context and comparison, the rights from 2017-22 were about $417 million per year and for 2023-24 they were $473 million per year. The 23-24 numbers are not especially instructive because they were negotiated in a panic in the throes of COVID.
It’s a hefty fee, but as Bob Iger (Former CEO of Disney which owns ESPN, the biggest sport broadcaster in the world) and many other prominent sports television executives before him have said, it is impossible to overpay for live sports. Sport is almost the only valuable live television property left. This broadcast money is the financial backbone of the league, and it allows the league to run effectively, albeit it is supplemented by attendance money.
But that is not the focus of this article, the focus of this article instead is what the AFLPA should be seeking at the bargaining table to do as a result of this significant uptick in revenue.
The AFL CBA is up this year so Paul Marsh and Patrick Dangerfield will be back negotiating with the AFL to try to get better rights for the players under this new broadcast rights deal. The key thing to note is that the salary cap, therefore player pay, is directly tied to league revenue. In the last CBA for instance, the players managed to negotiate that they will receive 28% of all league revenue up to $6.574 billion and then 11.2% of additional club revenue above that $6.5 billion number.
This is absurd.
I am going to now draw some comparisons with the NFL and NBA. Before I do it’s important to note that this is not a 1-1 comparison. The AFL is a purely socialist competition in many ways with AFL house acting effectively as the Kremlin. They dole out the money and the clubs are not privately owned. For some smaller clubs who do not bring in significant revenue themselves the AFL is essentially the controller.
The NFL and NBA are different in that they are privately owned within a socialist structure. What I mean by that is that there are socialist, parity-based practices like a draft, salary cap and revenue sharing – like the AFL – but the teams are privately owned and the owners decide how much they will invest in their franchise.
As a result of this different structure, the dynamics at the bargaining table are entirely different. The NFLPA and NBAPA are far more adversarial with the league and therefore more demanding because it’s not technically the league who cuts their cheques but the owners of the teams. It’s a purer form of collective bargaining than the AFL and looks more like the bargaining process that happens across Australia in various industries. As a result, the NBA and NFL are essentially at an even revenue split. That’s how someone like Aaron Rodgers is going to take home about $50 million in cash this year but also how the NFL league minimum sits at $705,000 per year despite there being 53 players on the active roster at a given time. Yes, there is significantly more money to throw around with the NFL’s new broadcast rights deal sitting at about $110 billion over 11 years across all the broadcasters, but the PA is also more able (willing?) to fight for a bigger slice of that revenue pie.
The AFLPA, on the other hand, is far more willing to kow tow to the league largely because of the degree of control that the AFL wields. But imagine this, in 2009 the broadcast money was governed by a TV deal that spanned 2007-2011 that paid the AFL $156 million per year. The highest paid players that year were Chris Judd and Jonothan Brown, earning over $1 million per year. The highest paid players are still earning about the same amount today with 5 players earning over $1 million and 3 on about $1.2 million – McGovern, Franklin and Martin.
Whilst the rest of the league is making more money – I will note here that 26 players were making between $500,000 and $800,000 and more than half the league was making between $100,000 and $300,000 – it is apparent that the players need to push for a bigger piece of the pie. Whilst I say that the rest of the league is making more money, it’s all relative with the average player salary in 2021 still sitting at a comparably meagre $372,000.
Whilst I understand that it is the AFL that signs the cheques and the AFL has a number of other things that they underwrite – namely Gold Coast, GWS and a burgeoning concussion lawsuit settlement fund – a 28% split is closer to the UFC than it is to other comparably structured sports. I make the comparison to the UFC UFC because the UFC has actively sought to destroy any attempts by fighters to unionise and are constantly, correctly, lambasted for not paying fighters what they are worth. The UFC is a legal cartel with no real competition in their space – that sounds familiar.
Incredibly, since the 2012-2016 CBA, players’ share of revenue is actually going down according to a 2012 paper by Booth, Brooks and Diamon in The Economic and Labour Relations Review.
The game earns more money than ever before and yet that rising tide has not lifted all boats in the way that it should and indeed in the way that it has in every single other comparable professional sporting association. The PA must push for the league to move with the times and demand more money, even despite the hold that the AFL has over the league. The league cannot cry poor like they did over COVID, nor can they say that there just is not enough to money to pay the players. There is enough money to go well above 28% of league revenue being devoted to the salary cap, whilst still being enough left over for the AFL executive to hand themselves some bonuses. The players need to and should push for a far bigger chunk of the revenue pie than they are currently getting.
Do I have faith in Dangerfield and Marsh doing it? Based on history, why should I?
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