INTRODUCTION

The history of player drafts in professional sport extends far longer than the typical Australian Football League fan would believe; American football's National Football League was the first to experiment with an “amateur” player draft in 1934. Although the modern narrative portrays drafts as a device to ensure competitive balance (defined as the degree of parity between teams), the NFL draft was originally motivated by a desire from the teams to circumvent bidding wars for prospective star players. Therefore, it was actually driven far more by the imperative to keep players’ wages low, which was historically a central tenet of employer behaviour in the sports industry in North America, where teams are invariably owned privately (the Green Bay Packers is one notable exception), and there is a clear profit motive for the owners. See Fort (2011: 247– 9) for a quick economic primer on these effects of drafts (the rest chapter 8 of of his Sports Economics covers this general theme more widely).

In these leagues – and also for the National Hockey League, National Basketball Assocation and Major League Baseball in their respective sports – the evidence on the proposition that the draft (and other restrictive policies, such as salary caps and revenue sharing) improves competitive balance is quite mixed. Vrooman (1995) is a good example (among many) demonstrating that the invariance principle holds in that such restrictive policies do not alter the level of competitive balance from that observed under free agency. However, some studies find otherwise, such as Depken (1999), who finds evidence of deteriorating competitive balance following the MLB move towards free agency in 1976 (away from the reserve clause – another, even more, restrictive policy on movement of players’ labour).

The AFL is not comparable in this respect, since its constituent teams are not managed inherently as if motivated by profit. Any surplus generated by a club in a given financial year is either retained or reinvested in future years, rather than being paid out as a dividend to their members (for instance, in the form of a reduced membership fee for the following season) or any other single entity. Rather, the clubs are economically assumed to be motivated by winning, subject to the constraint that they must at least break even over the long run.