Peter Gordon makes a huge concession:
It [the AFL Commission] can cap off a heroic year of achievement by ditching the COLA [cost of living allowance], and giving us an even draft and salary cap. Then we can really say, may the best team win.
So the best teams aren’t winning now? How did that happen?
Well it happens because the AFL works, deliberately, to restrict competition on several margins with the argument being that this will enhance on-field competition thereby maximising the value of the game to consumers. We can quibble about whether equalising the probability of on-field success is an enhancement of competition, we can even quibble whether it is even possible the equalise the probability of on-field success.
So we observe a market with high levels of “intervention” – much like a system of socialism. We also see all sorts of perverse outcomes. Gordon is complaining that Sydney have been able to attract Buddy Franklin on fantastic terms – too good to be true.
There’ll be a lot written and said about this historic move and with an AFL investigation proceeding, there’s a bit of water to go under the Harbour Bridge yet. Let’s spotlight a few issues.
Whether the current Sydney management should be entitled to back end a contract into the next decade with millions of dollars payable to a 34 year old who may have hit the wall years earlier is one of them.
If it all works out well, fine. But who is left to pick up the pieces if it ends in tears much sooner.
All the perverse incentives and moral hazard that we would usually associate with poor governance structures, lack of accountability, and massive levels of intervention.