Why AFL clubs are scoring generous free agency compensation this year

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AFL clubs losing top-tier free agents will cash in like never before this year under a revised, and tightened, league compensation model.

Making this year’s crop of free agents unique is the new collective bargaining agreement increase of 10 per cent – which became effective immediately, and was backdated for this past season – will not be factored into free agency compensation until next year, so this year’s offers line up with the previous CBA.

Ben McKay is on the move from North Melbourne.Credit: AFL Photos

The logic behind this decision was because the fresh five-year deal, which extends until 2027, was not agreed upon until late September. Player salaries will climb by 37 per cent by the end of the new CBA.

The compensation, or lack thereof, is already public knowledge for six departing free agents: Ben McKay (first round), Tom Doedee (end of round one), Matt Flynn and James Jordon (both end of round two), and veterans Todd Goldstein and Joel Hamling (none).

North Melbourne will receive pick three for McKay, who will become a Bomber on a lucrative six-year deal worth, on average, somewhere between $750,000 and $800,000, if they do not match the offer.

The Roos will let him walk to Essendon, meaning they will have a strong draft hand of picks two, three, 15 (tied to Port Adelaide), 21 (AFL assistance pick), 44, 56 and 64. They are expected to try to package 15 and 21 to get what will become pick 11 from Gold Coast, who received it from the Western Bulldogs on Monday.

Jordon and Hamling both qualified as unrestricted free agents because they were previously delisted, while the rest met the conditions based on years of service.

A player who spent at least eight years at their current club and is in the top 25 per cent of earners is a restricted free agent, while others outside the top 25 per cent, or who have reached 10 years’ service, qualify for unrestricted free agency.

The other big move is yet to play out, with another restricted free agent, St Kilda’s Jade Gresham, also wanting to join Essendon. The Saints will also have the right to match the offer.

Speaking about McKay, the Bombers’ offer and the potential compensation for North Melbourne on Monday, Essendon’s outgoing list boss Adrian Dodoro said: “We’ve submitted the paperwork this morning, and we’re yet to know if there will be a match bid or not … I’ve got no idea what the herbs and spices [of free agency compensation] are – I don’t think anyone knows.”

What’s in the secret compensation formula?

The process begins with the AFL evaluating every contract for players aged 25 or older, then ordering them based on a points value rating from one to 100, which includes various factors.

The younger the player, the better chance of greater compensation, so McKay not turning 26 until December worked in the Kangaroos’ favour, whereas it’s a different story for Goldstein (35 years old) and Hamling (30).

But wage is still the most important factor. If a free agent’s new contract ranks in the top five per cent of contracts across the league for that year, then the club losing the player scores a first-round pick directly after its own, such as North with McKay.

There is a descending value from there, with the compensation for departing free agents in the next 10 per cent of contracts landing at the end of the first round, such as Doedee’s four-year deal at Brisbane.

Two sources familiar with Doedee’s offer told this masthead he would earn just north of $700,000 on average across his contract.

The next 15 per cent band triggers second-round compensation, right down to the bottom 30 per cent earning their old club no compensation. The lowest compensation is a third-round selection.

The AFL argued in a recent briefing to journalists that there had never been any discretion with free agency compensation. They conceded no system would be perfect, but that a cut-off point – early this year – was needed, so contracts could be assessed to arrive at a ranking.

This was necessary to give clubs a list of which players were restricted and unrestricted free agents entering the season, while acknowledging that clubs could alter contracts during the year.

The next evolution of free agency compensation, the league said, was to add length of contract to the criteria, which would result in longer-term deals carrying a greater weight.

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