Legal question on Essendon's banned players, legal action & salary cap.

[bulldogtragic]

So reading and hearing the massive 5 year contracts Essendon have thrown around to get banned players back has me interested...

If those players above are suing Essendpn, and privately settle on damages at say $500,000 or more per player, does that money fall within the salary cap? It could allow Essendon to effectively rort the salary cap by paying them unders on these long term deals and top them up through legal settlements and also shut the actions down? So do any legal settlements with players, former, current & future count towards the cap???

If not, Crameri should extend his contract with us at a much lower rate and claim the saga cost him the ability to earn more. Get Gordon Legal to pursue the action pro bono. Then any legal settlement for reduced wages tops Crameri's wages up and frees up salary cap space to pay Tom Boyd even more, or worse yet with Minson's wage savings and others, go and head hunt a really big name to annoy the establishment even more.

I'd love to know the answer.

[Twodogs]

My guess would be no if the court makes a judgement and applies damages and murky area if it's a negotiated settlement.

[GVGjr]

It's a great point you raise BT. Would they be dumb enough to use the option to minimise the impacts on their salary cap? I'd have to doubt it but it does mean the AFL will need to look at this closely.

[bulldogtragic]

It's a great point you raise BT. Would they be dumb enough to use the option to minimise the impacts on their salary cap? I'd have to doubt it but it does mean the AFL will need to look at this closely.

Would they be dumb enough? History says yes. Can they rort it, possibly so. If this is an AFL approved practice, I hope our clubs legal eagles, led by PG, is looking at this with/for Crameri. We could open up over $100,000 a year in re-signing Crameri in our cap and possibly even look much harder at Hurley paying unders and having player lawyers go hard at Essendon.

[boydogs]

It's not a legal question, it's a question of AFL policy

[bulldogtragic]

It's not a legal question, it's a question of AFL policy

Part yes, part no. The policy or opinion of AFL general counsel involving the salary cap is the important part, granted. But how a negotiated settlement might be legally characterised by the parties to the settlement might circumvent the existing policy leaving the AFL powerless potentially if they're not proactive.

[boydogs]

Part yes, part no. The policy or opinion of AFL general counsel involving the salary cap is the important part, granted. But how a negotiated settlement might be legally characterised by the parties to the settlement might circumvent the existing policy leaving the AFL powerless potentially if they're not proactive.

Let's say all of the 34 players are awarded on average $500k compensation. That comes to $17m which in itself exceeds the annual salary cap. What does the AFL do then?

The policing of the existing policy and amendments to it are entirely under the AFL's control.

The TPP policy on the banned players is already subject to negotiation:

http://www.foxsports.com.au/afl/port-adelaide-melbourne-st-kilda-western-bulldogs-could-benefit-from-salary-cap-concession-on-exbombers/news-story/90698df596a7cfc7384cb9e76b679aa5

This is the existing policy if it helps:

http://s.afl.com.au/staticfile/AFL%20Tenant/AFL/Files/2015-2016%20CBA%20FINAL.pdf

http://puu.sh/pybeZ/52584981b2.png

[bulldogtragic]

Thanks BD, awesome links. I can Essendon spending a lot more money on lawyers trying to argue technical aspects of the policy.

[bulldogtragic]

I like that Essendon are likely to be paying Stew's salary. Hence we can sign up players and front load contracts. A good silver lining.

[Twodogs]

Won't the Tax office want to make a ruling as well?

I think they don't tax money awarded in court cases but if it's going to Br used as income they will want a share.

[Twodogs]

I like that Essendon are likely to be paying Stew's salary. Hence we can sign up players and front load contracts. A good silver lining.

Damien Barrett's stupid little head will explode.

[LostDoggy]

DB's head may be stupid, but it aint little

[Twodogs]

DB's head may be stupid, but it aint little


Compared to mine it is. But I have a boof head.

[boydogs]

Thanks BD, awesome links. I can Essendon spending a lot more money on lawyers trying to argue technical aspects of the policy.

To the AFL?

They would have as much luck as GWS arguing to keep the Riverina recruiting zone, or Sydney trying to keep the cost of living allowance increase in the salary cap

[bulldogtragic]

Won't the Tax office want to make a ruling as well?

I think they don't tax money awarded in court cases but if it's going to Br used as income they will want a share.


To the AFL?

They would have as much luck as GWS arguing to keep the Riverina recruiting zone, or Sydney trying to keep the cost of living allowance increase in the salary cap

It's a question of status as to the monies. What TD is saying is correct. If the club and player settle on the premise of it being about a personal injury then the ATO cannot tax the monies. Conversely, if a settlement was about lost wages the ATO would tax the monies (any accountants or lawyers correct me if I'm wrong, but that's my understanding). So Essendon and a player can settle the matter, and both sets of lawyers would agree on the type and cost of settlement. My pea sized brain looking at the wording of the policy goes immediately to 'connected to the players past or current services'. Now if Essendon settle with the banned players and it's for personal injury (no tax, unlike their normal wages) as a result of the doping regime, Essendon's & the AFLPA lawyers & the players lawyers may argue that the injury is not a result or connection to players past services, but rather derived from an illegal doping program run by the club. I can see a legal argument based on the wording of the policy, and a club which likes using lawyers to try to exploit any holes pre-emptively and then argue it if the AFL isn't playing ball.

[F'scary]

Great pick up BT. "Not at arms length" transactions.

[boydogs]

I can see a legal argument based on the wording of the policy, and a club which likes using lawyers to try to exploit any holes pre-emptively and then argue it if the AFL isn't playing ball.

The salary cap document is a policy not a law. It's policing and amendments to it are entirely at the discretion of the AFL. Essendon can present a legal argument based on the existing policy, but the AFL are the judge

The ATO treatment of a settlement would be more subject to the courts

[bulldogtragic]

The salary cap document is a policy not a law. It's policing and amendments to it are entirely at the discretion of the AFL. Essendon can present a legal argument based on the existing policy, but the AFL are the judge

The ATO treatment of a settlement would be more subject to the courts

The ATO reference is about the general principle that injury compensation is generally not considered taxable income, and if that principle will be applied by the AFL for salary cap purposes if banned players are awarded money and it not counted in the cap. I guess it all boils down to the point if the AFL allow that argument for Essendon we should be checking with the AFL to see if we can exercise that favourable treatment for Crameri & our club. I think it's an interesting dimension for all the banned players, and I'm sure the AFL would be happy if no one ever asked the question publicly.

[Twodogs]

My brain genuinely started to hurt reading BT's post. I'll have to finish it later.

[Murphy'sLore]

This is why I never used my Law degree.

[EasternWest]

This is why I never used my Law degree.

Just stuck to your Lore degree.

I'll see myself out.

[Twodogs]

This is why I never used my Law degree.

You must have used it for something. Laundry list, shopping, something like that.

[bulldogtragic]

You must have used it for something. Laundry list, shopping, something like that.

Having a huge HECS debt.

[Twodogs]

Having a huge HECS debt.

Yep, that.

[boydogs]

I guess it all boils down to the point if the AFL allow that argument for Essendon we should be checking with the AFL to see if we can exercise that favourable treatment for Crameri & our club. I think it's an interesting dimension for all the banned players, and I'm sure the AFL would be happy if no one ever asked the question publicly.

I can't see the AFL determining that Essendon's compensation to Crameri should be in our salary cap. If Stewart's happy to play for us for less as a result of getting extra money from Essendon, cool beans

[Murphy'sLore]

Having a huge HECS debt.

I was lucky, snuck in before HECS really took off, only owed a bit for my final year. Paradoxically, if I'd had to pay the full whack, I probably would have chucked it in after the first year.

[bulldogtragic]

I was lucky, snuck in before HECS really took off, only owed a bit for my final year. Paradoxically, if I'd had to pay the full whack, I probably would have chucked it in after the first year.

For sure. I stopped a LLM/Juris Doctor after a mere three subjects (of 24 subjects need) about 5 or 6 years back. Nearly $11,000 in HECS. I wouldn't be doing that ever again, not to mention its completely boring and about 1% of graduates get a job.

[Murphy'sLore]

Ouch! Hate to think what it would have cost you if you'd gone the distance!

[Twodogs]

Ouch! Hate to think what it would have cost you if you'd gone the distance!

Probably would have needed to take up a life of crime to fund the HECs debt. It's a system that makes so much sense. We expect people to have good skills in order to get anywhere in life but want them to mortgage their future in order to achieve them.

Anf of course the dead eyed ideologues who devised it all got the benefit of a free tertiary education...

[Murphy'sLore]

I used to sit next to John Roskam in Contracts lectures. Should have nobbled him when I had the chance :( I knew Bill Shorten slightly, too... That was the thing about Law, that was where all the future trouble-makers hung out!

[bornadog]

I used to sit next to John Roskam in Contracts lectures. Should have nobbled him when I had the chance :( I knew Bill Shorten slightly, too... That was the thing about Law, that was where all the future trouble-makers hung out!

Roskam is a Bulldog supporter - can't stand his right wing views.

[bulldogtragic]

Dear media folks who browse here, this just became a much bigger story.

[bulldogtragic]

If this flies, then this is a gold mine.

Bob, Redders, Wallis, Smith & Libba (LTIs in the last two years staying on) should sue the club for injuries sustained at work, like the Essendon players. The club should do the right thing by them and settle all claims confidentially. Coincidentally, they might just take pay cuts or not ask for pay rises.