Clubs to bank unspent cap

The total player payment banking mechanism, to be introduced next year as part of the AFL's broad new equalisation measures, will allow clubs to spend up to 105 per cent of the salary cap in any given season, provided they have ''underspent'' in any of the previous two years.

It means clubs that have paid less than their full cap will be given an incentive to spend more of their money on players and have the capacity to chase stars, knowing they have greater flexibility in their cap.

While clubs are already managing their salary cap by front loading some player contracts while their list is young or being rebuilt, the new system would enable them to pay a player what he is worth at any particular time, rather than inflate the market.

It should also ensure that players at clubs that cannot afford to pay 100 per cent of their cap because they are struggling off the field will not miss on money they might have earned at stronger teams, with their club able to make it up to them once they are in a stronger financial position.

Clubs will only be permitted to ''overspend'' the money they have not used in the previous two years, meaning, for example, that a club that saves $500,000 in 2015 could exceed the cap by $500,000 across 2016 and 2017.

''What the banking mechanism says is that even next year, if one of the clubs doesn't pay 100 per cent, as long as they can turn their business around they have the opportunity to retain players and pay them what they should have been paying by paying overs for a period of time,'' said AFL chief executive Gillon McLachlan.

''It's about acknowledging the players and where they've sat in this imbalance and helping to support the bottom clubs as they turn their business around.''

Players will also benefit from an increased salary cap as part of the overhaul, with the total player payment to rise from $9.92 million to $10.07 million in 2015, and to $10.37 million in 2016.

The increases will be self-funded by the large clubs, with the smaller clubs to be supported by increased revenue sharing but encouraged to direct more money towards their playing list rather than to unnecessary football department spending.

Meanwhile, the ''soft cap'' for non-player football department spending will be set at a projected industry average spend in 2015, with clubs able to spend another $500,000 on top of that soon-to-be-determined amount.

The ''luxury tax'' applied to over-the-cap spending will be set at 37 per cent in 2015 (payable in 2016) and 75 per cent in 2016, but capped at $1 million per club in each of those years and reviewed ahead of season 2017.

Clubs that apply for discretionary funding must meet several criteria - to do with their fixturing arrangement, stadium deals, supporter base and growth potential - before they are granted extra money from the central pool. Clubs that exceed the football department cap will not be eligible for discretionary funding.

The league also confirmed plans to move towards a more ''pure'' salary cap by phasing out the veterans allowance by 2017 and replacing the cost-of-living allowance used by Sydney and Greater Western Sydney with a rental subsidy to be paid directly from the league to players on below-average contracts.

The Giants will retain an ''expansion allowance'' for ''another few years,'' said McLachlan.

The chief executive said the AFL's greatest challenge in implementing the new measures would be ensuring the clubs' ''unambiguous support'' resulted in their compliance.

''Non-player spending has been growing at about 10 per cent a year for 10 years now and it's just not sustainable. It would send the competition broke and I think all clubs acknowledge that,'' McLachlan said.

''The enforcement of it is obviously going to be a big compliance challenge coming out of this raft of measures.

''We're working through that with the clubs at the moment and there will be some challenges in that like there is with the salary cap, but I think there's an acceptance that it's necessary.''