Salary caps – an ethical leadership dilemma for clubs

Salary cap discussions expose an ethical leadership dilemma for clubs

In a previous life I had the honour and pleasure of being the CEO of the Mornington Peninsula Nepean Football League (MPNFL). At the time, 2007 -2008, the MPNFL was a combination of three separate football leagues and a netball league.

During my CEO tenure one of the biggest issues continually raised by clubs was the burden of rising player payment costs. Clubs felt, if they wanted to reach the finals, they had to spend significant and increasing amounts of money each year on attracting and retaining players to their club. The burden of raising the funds as normal fell to the volunteers.

It was with much interest that I read the press release issued by AFL Victoria on 22 October 2014 (Access full release here) that announced the “Player Payments Working Party” established by AFL Victoria had suggested a framework which sought to “halt the escalating cost of player payments“. The potential framework included, amongst other things, a state wide salary cap with specific limits for individual leagues.

My initial thought, as an ex league CEO, was of course it will never work because it can’t really be enforced. The online feedback from the various clubs and leagues is pretty much summarised by the following comments by various club presidents which appeared in the Monash Weekly (Access full article here ) the day after the AFL Victoria press release:

• “It’s impractical. It won’t work,”
• “If clubs want to pay someone they will just direct it through someone else”
• “If there are third-party arrangements, such as a hotel, what’s to stop the hotel paying players direct?”
• “How are you going to police that?”
• “I don’t mind the intent and the principle of it, but realistically, it’s not practical.”
• “I think it would be impossible to police”
• “You could give clubs guidelines, I guess, on what the rules are going to be, but you’ll always have coterie groups, backhanded deals, that sort of thing going on.”

As I was reading the various articles I found myself agreeing whole heartedly with the various Presidents’ comments. Co-incidentally at the same time I was reading these articles I was preparing a training workshop on ethical leadership and it really forced me to think about the concept of a salary cap from an ethical leadership perspective.

Why wouldn’t a voluntary salary cap work?

The logical argument was that it was impossible to police, and so it is, but why does it need to be policed?

Would community sports clubs consciously cheat? Surely not?

Not knowing any answers I decided to change the format of the Ethical Leadership session and to tackle the issue head on.

The results were startling.

About 65 committee members from about 20 different sports and community organisations attended the session. I opened the session reading from the AFL Victoria release about the possible introduction of a salary cap and then I read the above feedback from various Presidents from the Monash Weekly. Everyone was nodding their heads in agreement. “Impossible to police” was the consensus around the crowd.

I then asked the following questions.

Would you consciously disregard the salary cap?

A few sheepish hands were raised.

What if you knew you would never get caught, would you disregard the cap?

A small number of hands rose slowly, but not many.

What about if you had finalised the team for the year and were just on the salary cap and in walks the club’s “favourite son”, a club legend back from playing at a higher level. Would you renegotiate players’ contracts to fit him in? Say there was no room in the salary cap would you knowingly and consciously breach the cap?

There was deep thought in the room now. What would they do? Some indicated they would breach the cap.

To those who answered that they would knowingly breach the cap I asked why:

“Whatever it takes to win”
“You have to do it to be able to compete”

I said to those who had been honest enough to say they would breach the cap:
So as president you agree to abide by the rules of the competition when entering it but knowingly you would breach its rules. What sort of a leader does that make you? I then asked:

Would you be prepared to stand up in front of your members and openly say we consciously broke the rules?
Would you as President be comfortable to have your conscious cheating, because that is what it is, on the front page of the local newspaper?
Would you be comfortable explaining to your friends and family why you are a cheat?
Is a person willing to cheat and break the rules of the competition the sort of person who should be leading a community club?
If the values and culture of your club is set by the leaders of the club, what sort of culture are you really creating at your club?

And so began one of the most enthralling workshops I have ever been involved in. To AFL Victoria I say congratulations on having the courage to tackle one of the biggest issues in community football. For what it’s worth I think the points system is great because it forces clubs to develop their juniors but it does not, in my experience at the MPNFL, have an impact on player payments. In fact MPNFL clubs told me it actually had the opposite effect, driving up the demands of middle and lower tier players.

If AFL Victoria proceed with the implementation of the salary cap, as I believe they should, it should be accompanied with an ethical leadership training program. Leaders of clubs need to be given not only the information about the rule but the skills they are going to need to tackle the very real issues that will arise when they seek to follow the rules.

If leaders are not given these skills then the path of least resistance will be taken, as it often is with poor leadership, and the player payment arms race will continue again.

Steve Pallas
Managing Director
Sports Community
Office: 03 59736404