traditionally taken place, in particular to more remote locations, these have
generally been seen as temporary measures at early career stages or have been
combined withfinancial compensation. Sports players arguably have as much
right to choose their location of employment as any other worker in Australia
and, although there may be a case for restricting movement between clubs
within a season, the career-long restrictions are unparalleled, and reduce
players’bargaining power over other considerations such as wages.
Capping each club’s total wages represents a transfer of wealth from players
to owners or other vested interests. Moreover, enforcement of such regulation
is difficult (Davies 2011), as illustrated by the length of time over which
Melbourne Storm breached the NRL salary gap in 2008 and 2009 before
being punished. Furthermore, even if a payroll cap promotes competitive
balance by ensuring that all clubs have a wage bill that is approximately
equal, long-term market signals to players may be distorted, and there have
been several cases of players moving from one football code to another; the
signing by AFL expansion team Greater Western Sydney of former NRL player
Israel Folau is an example of shifting code loyalty. Teams that are successful in
attracting spectators could be argued to deserve to reinvest the rewards of their
success just asfirms in other industries do.
In sum, competitive balance has provided a basis for pervasive distortion of
market forces, particularly in labour markets. Some elements are present in
other countries, but the AFL is an extreme case:
The Australian Football League (AFL) is one of the most regulated sporting leagues
in the world, operating both a salary cap and draft system in its quest to create a
more even competition. (Cook and Davies 2012)The regulation is internal to the league, and is supported by non-application
of public regulatory policies, such as competition policy. Football players
earning hundreds of thousands of dollars a year for playing a game they love
are not ready targets for sympathy, but they are earning less than the value of
their marginal product, and this is primarily to the benefit of other rent-
seekers, such as sports administrators.
Apart from the non-application of competition policy and labour laws, the AFL—
and presumably other sports leagues—is exempted from large parts of Australian
corporations law and has virtually tax-free status (Forbes 2014).Theblurringofthe
sporting ethos and business practice, routinely displayed in much of the media,
exacerbate the difficulty of applying a sensible regulatory regime to professional
team sports and other sporting activities that have become big business.
More importantly, in terms of Exceptionalism, Australia’s sporting labour
markets are becoming increasingly idiosyncratic. In North American major
sports, players have unionized and have gradually won increasing free
agent status for senior players. Players’associations have been much weaker
Australia’s Economic Mores