Braham Dabscheck, the author of the report cited by the Hon Warwick Smith AM to recommend a cut to A-League player payments, today said that Mr Smith had got the numbers wrong on player payments and that his recommendation that the minimum A-League payment be abolished is unlawful.
Mr Dabscheck, a Senior Fellow with the University of Melbourne Law School and a former long serving Associate Professor at the University of New South Wales, is Australia’s leading academic on the industrial relations aspects of professional team sports, having studied the field since the early 1970’s. He authored the 2010 study“The Linkage Between Player Payments and Benefits to Revenue Sharing in Australian Sport” at the request of the Australian Athletes’ Alliance, the peak body for Australian players’ associations, including Professional Footballers Australia (PFA).
Mr Dabscheck said: “Unfortunately, Mr Smith incorrectly compared A-League players’ share of revenue with those in other sports, including cricket and rugby, arguing that as A-League players share 46% of revenue, this is unsustainable with comparable sports.
“Mr Smith’s analysis is incorrect for two principal reasons.
“First, one cannot look at the A-League in isolation from the business of Football Federation Australia (FFA), especially the Socceroos, which are a major driver of game revenue.
“When combined Socceroos and A-League player payments are looked at as a percentage of combined FFA and A-League club revenue, my study found that the players’ share of revenue ranges from 21.36% to 29.34% depending on the year. Yet, Mr Smith does not refer to this finding in his report.
“This is clearly comparable with the other sports referred to by Mr Smith, which distribute between 20% and 26% of combined governing body and team revenues to the players.
“For example, in cricket, almost all revenues are generated by the national team. Of course, it is not being suggested that State cricketers should take a pay cut. The integrated financial model of cricket (which Mr Smith recommends be maintained for football) enables national team revenue to subsidise the States and build a sustainable career path at State level.
“Clearly, football must do the same, especially given the global market for the services of players.
“Second, FFA arguably understates A-League club revenues because it pays a very low dividend to A-League clubs in comparison with what the other governing bodies pay to their professional teams.
“The Australian Rugby Union provides each State with a grant of $4.3 million which, for 2008, would have constituted 59.35% of player payments. In the same year, the Australian Football League dividend to clubs exceeded total cap payments (it was 101%), but was 77.47% of total player payments. For the A-League, for the year beginning in 2006/07 to 2009/10, the percentage shares were 64.86, 57.31, 51.39 and 48.46 % respectively; a steady decline. In the case of the National Rugby League, the approximate shares for 2006 to 2009 were 67.47, 70.32, 71.35 and 70.83 %.”
Mr Dabscheck also stated that the report made a number of concerning observations regarding minimum player salaries, both individually and collectively.
“An A-League footballer is a full-time employee, and the Collective Bargaining Agreement enshrines a minimum salary of $47,094 for players 21 or older, and $38,020 for younger players. A professional footballer is entitled to the protection of the employment law in this country. Mr Smith’s recommendation that the minimum payment be removed would be unlawful in every workplace in Australia.
“Further, it is now accepted throughout the world of sport that wherever a salary cap operates, it must be accompanied by a salary floor, which in the A-League is set at 85% of the salary cap. This is lower than a number of other sports such as the AFL, which sets its floor at 92.5%.
“There is no evidence that a salary floor “artificially inflates salaries” as Mr Smith suggests. A salary floor obliges all clubs to make a minimum investment in playing quality to ensure the salary cap’s objective of competitive balance is advanced. It is also widely accepted on principles of general justice and fairness as part of the players’ voluntary agreement to cap their earnings in the interests of financial viability.”
Mr Dabscheck is preparing a written response to Mr Smith’s report, which will be made available next week.
