If the (soft) cap fits
Why the Clarkson handover has had minimal impact on the Hawks' soft cap
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There was a lot of anger among fans earlier this year as the changeover from 17-year GOAT coach Alastair Clarkson and the budding young apprentice Sam Mitchell played itself out in a very public forum.
Jeff Kennett and the Hawthorn Board were in the firing line, Sam was in the firing line and even Clarko was in the firing line as the narrative behind the changeover unfolded before our eyes.
One of the biggest issues and concerns that was rightly fuelled by the media centred around ‘wasting’ $900,000 in contractual salary obligations to Clarkson. On top of this was the immediate impact on his incumbent head coach given the football club soft cap that was brought in by the league back in 2014/15.
Jon Ralph, Jay Clark and Michael Warner:
“The Hawks owe Clarkson as much as $900k after this season which could spell soft cap disaster should key assistant coaches decide to move on from the club.
“His payout will handcuff the Hawks slightly in terms of their football department soft cap spending.”
Kane Cornes:
“He’s left them with a $900,000 hole with their soft cap, meaning Sam Mitchell is going to be two, three coaches short a doctor, a masseuse, a Development Manager at the Hawthorn Football Club, so I’ve got a lot of sympathy for Sam Mitchell and what he’s walking into.”
It was widely reported that Mitchell would be miles behind the eight-ball as a result of the decision not to renew Clarkson’s contract, and suggestions were even made that we would go into 2022 with a smaller coaching panel.
At the time Craig McRae (now the Collingwood Head Coach), Brendan Bolton (Assistant Coach at Collingwood) were contracted to the club meaning that should they have wished to stay to see out their contract, regardless of if they were in Sam’s plans, they would have stayed.
But with them both moving on Sam has been able to assemble a squad of his own lieutenants, and craft a group around him that in the opinion of this writer, is elite.
But back to the restrictions imposed by the AFL – for us to really understand what impact the Clarkson payout has on the club and the soft cap, let’s first understand what it is and how it’s applied.
The soft cap introduction
Prior to 2014, the only cap placed on clubs was a salary cap for on-field personnel – effectively set to the complete playing roster.
Back then the AFL found the gap was widening between clubs to the point where there was about $5m difference between the expenditure of the biggest and smallest clubs in the football department.
As a result the soft cap on non-player football expenditure was implemented, including:
A luxury tax applied to spend above the soft cap of $9.3m:
2015: 37.5 percent;
2016: 75 percent.
Luxury tax payments capped at $1m per club per annum for 2015 and 2016;
The decision to spend above the cap is at each club’s discretion – but capped to ensure clubs are not unfairly disadvantaged; and
A soft cap and luxury tax rate review for season 2017.
In 2015, three clubs — Fremantle, West Coast and Hawthorn — were liable for the tax, according to figures submitted to the AFL.
Similarly in 2016 Hawthorn made the concerted decision to surround Clarkson with the people required to fulfil the needs of the club in terms of the football department.
This conscious decision was made to spend over the cap and take on the financial implications handed down from the powers that be.
2017 and the review
The AFL conducted a review of the two-year-old soft cap ahead of season 2017 and it resulted in a more severe levy on the code’s wealthiest clubs.
From 2017 the luxury tax was no longer capped at $1m per club, however the financial sanctions on any overspend above the $9.3m budget were significantly increased:
Any expenditure over the cap and up to $500,000 incurring a levy of 100 percent;
Any expenditure over the cap from $500,000 to $1m incurring a levy of 150 percent;
Any expenditure over the above $1m incurs a levy of 200 percent.
It is unclear how many clubs, and whether or not Hawthorn in particular, spent over the cap during this time.
2021 – wholesale changes
With the announcement by the AFL of a decreased soft cap for the 2021 season, most clubs were forced to slash personnel, and the Hawks were no different.
The decision was made to reduce the soft cap from $9.3m to $6.132m - an enormous cut all things considered, after clubs rallied for this to at least remain over the $7m mark.
The club parted ways with Damian Carroll, Max Bailey, Marco Bello, Torin Baker and Brett Deledio – reluctantly letting them go from their roles.
At the time, Graham Wright spoke of the tough decisions the club had to make with each of the staffers individually.
“Damian, Marco, Max, Torin and Brett all have tremendous values, exceptional skills and our club is a better place for them having worked here.
“But unfortunately due to the reduction in the soft cap we have been forced to make some incredibly tough decisions at this time.”
Despite these changes, Clarko still had a significantly well-built team put together to tackle the 2021 season.
Clarko’s squad versus Sammy’s squad
2021 Coaching Staff:
Head Coach: Alastair Clarkson
Assistant Coach: Chris Newman
Assistant Coach: Brendan Bolton
Assistant Coach: Craig McRae
Head of Development: Sam Mitchell
Box Hill Coach: Sam Mitchell
Development Coach: Andrew Otten
Ruck Coach: Damian Monkhorst
2022 Coaching Staff:
Head Coach: Sam Mitchell
Assistant Coach: Chris Newman
Assistant Coach: Robert Harvey
Assistant Coach: Adrian Hickmott
Assistant Coach: David Hale
Head of Development: Andrew Collins
Development Coach: Andrew Otten
Ruck Coach: Damian Monkhorst
Box Hill Coach: Clint Proctor
So what are the changes?
In actual fact when it comes to direct support staff around Sam, he has been afforded an extra two positions that Clarko had in 2021.
This season Sam filled both the Head of Development and the Box Hill coaching roles, while for 2022 this has been separated and will be filled by Collins and Proctor respectively.
Similarly, Mitchell has been afforded the luxury of having four direct assistants versus the three Clarkson had at his disposal this season.
A media beat up?
The long and the short of the coaching handover saga is that the $900,000 owed to Clarkson needs to be included in our soft cap.
Interestingly, Kennett intimated in his coaching handover press conference that a precedent was in place with other clubs having been through similar circumstances.
“The reduction of the soft cap by a third has affected all clubs, the AFL have a precedent in place which happened with Mr (Rhyce) Shaw at North Melbourne and one other coach somewhere else.
“Whatever the precedent is we will follow that, so there’s no special treatment for Hawthorn we just follow the precedent.”
This alludes to a workaround in the rules allowing the $900,000 to be paid over a two year period – effectively $450,000 per season.
It means our soft cap is expected to be exceeded by between $75,000 and $100,000 per year – bringing the luxury tax handed down on the club to a similar figure range.
When you consider the fact Clarkson had a similar allowances when the cap was introduced in 2015, this has become nothing more than a media beat-up.
So for all the negative press, for all the implications that Mitchell would be behind the eight-ball before he started, for all the anti-Hawthorn sentiment contending the board has set us back for years - it’s just not true.
Mitchell has his blank slate. Mitchell has the financial backing and support of the club. And he has already assembled an A-Team around him that will give him every chance to be the next in a very long line of successful Hawthorn Football Club Head Coaches.
Andrew Weiss is one of the co-founders of Hawks Insiders. You can debate the soft cap with him on Twitter @weissy09.
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Excellent analysis. Thanks for fascinating overview. Makes me think twice about the importance of keeping my membership