So how does free agency work (sort of)?

Usually the start of the player movement period is more stalling than roaring in nature. With deadline deals normally the order of the day, player movement often lacks a lot of movement (pardon the pun) until deadlines get tight.

Already in the 2020 Free Agency period there have been offers made to seven free agents, and relatively high profile ones at that. Every free agent offered a deal, whether restricted or unrestricted, has played in a Grand Final or made an All Australian team.

Where free agency is usually criticised for lacking the big names, 2020 has certainly delivered on that front.

In exchange for the five deals already agreed to, five draft picks, including two first round selections, two second rounders and a third, have been granted to their old clubs.

While few exactly know how these picks are granted, a few have a decent idea.

As HPN has written about in the past, originally outlined by Peter Ryan and reiterated by Jake Niall, the broad specs of how free agency works have been out there for a while.

To the pull quote:

As a result, the only secrecy involved exists around the specifics of player salaries, and the inaccuracies involved in their reporting. The broad distribution of player earnings is already published annually, as is the annual rises to the Total Player Payment caps. If the reporting of salaries is accurate, it is relatively easy for fans and followers to intuit what the compensation is likely (or will potentially) be.

Using the 2019 AFL Annual Report, seven players (or 1.2%) earned more than $1m last year. About 4.5% of all players received north of $800k, but given there were roughly 360 players over the age of 25 this year, the 5% line is likely to be a fair bit higher.

When adjusted for the smaller pool, the cut line for round one compensation (ignoring the age adjustment) would land a little shy of the $900k mark. The age adjustment can mean that a player can earn significantly less than the raw cut line and be adjusted up due to how young they are, which may have happened with Joe Daniher and Zac Williams.

About 15% of players earned at least $600,000, but with the reduced pool of players older than 25, the line is likely just north of $700,000 for the next tier (end of round 1 picks).

Band three, which Brad Crouch has (according to The Age’s Daniel Cherny, although band 2 would yield the same effective picks for wooden spooners Adelaide) fallen in, finishes at around the $600k mark. The final bands allegedly fall at the the 50% and beyond marks, putting them in the middle of the $400-500k band.

How much should these players be worth?

Thanks to HPN’s new Salary Prediction Tool, HPN can reasonably match up how much it appears players have been offered with how much value they are predicted to produce over the coming years.

Generally, it appears that most players that have been offered free agency deals this year have been offered contract values at the top of, or above, their predicted value ranges. Some of this may represent a “transfer premium” where players sometimes need extra inducement to uplift and move.

All five players to so far move project to produce less future value for their club than the expected output of the compensation pick given to their former team.

Having already gotten years of service from their players, the clubs losing them win again with their generous compensation.

Projected future value of players and compensation picks gained during free agency

Adrian Dodoro is an easy punching bag but Joe Daniher is arguably impossible to value fairly. As noted when unveiling the SPT, the range between Daniher’s track record and assumed potential is vast. He may be rated even higher than the SPT does above if it looked back further than three years, but in footy terms that’s a distant memory.

Somewhat similarly, a sometimes injury-hampered Williams, who has missed significant football in two out of the most recent three seasons, might be expected to also outperform his projection if he stays healthy. Carlton have already mooted a move to the midfield as part of their pitch to him – if it comes off, he could impact games far more than he has in the past. However, if his injury struggles continue, it may come back to bite Carlton.

Aidan Corr has been a solid background citizen for several years in a very strong GWS defence and moves to North Melbourne where he’ll need to play a bigger role. Corr projects pretty close to the pick 30 valuation applied to him.

The other two free agents have netted their clubs well over the odds, in giving back useful later selections, for a good player who likely doesn’t have long left in his career (Isaac Smith), or the player who the club stopped playing as part of a deep rebuild (Rory Atkins).

The real free agency losers

Free agency compensation picks aren’t a victimless crime. When the AFL is creating those valuable compensation picks for departing free agents it impacts every other club at the draft. This draft reshuffle, pushing other picks down, creates winners and losers.

Generally speaking, free agency is a win-win for the two clubs involved, to the detriment of most other clubs.

As outlined by so many writers, including HPN, the AFL free agency compensation system is poorly weighted at best or fundamentally broken at worst.

In an environment where draft picks are important, having compensation start so early distorts the entire player movement environment. The easiest solution would be to push the start of free agency compensation back to the third round or later, to provide a way to fill a vacated list spot at a marginal cost to other teams.

It has to be remembered that if a player delivers high end compensation to a club, he has likely already delivered a large amount of on-field value to the club in the past. Value often in excess of the draft pick that they were selected at. In that sense the original club gets a free spin, and the other clubs that strike out at the draft just have to sit back and watch.

Note: This post is part of a series of posts using a valuation method called Player Approximate Value (PAV) to evaluate trades for fairness and balance. Readers can explore these values with tools such as 5-year player value projection charts and a Salary Prediction tool as well as the HPN Trade Calculator to evaluate potential trades.

Elsewhere, read much more about the method and theory behind PAVExpressing the value of players and picks in terms of expected future PAV provides a common currency for comparing them in trades and other movements. Players are projected using PAPLEY, a method to derive expected future PAVs.

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