SPORTS LAW - HAVE YOU EVER WONDERED WHY THE NRL DOES NOT HAVE A DRAFT?

For many athletes growing up, they dream about hearing their name in the following sentence… “with the first pick in the draft….”

For rugby league athletes this is not possible. But why?

Prior to 1991 the NRL, like the AFL, NBA, NFL etc. had a draft!

There has always been issues with drafts in various sporting codes, which receive a lot of attention in the media, especially when a high-profile athlete has been trade and without knowledge that they were getting trade.

The interesting thing is that the draft rarely gets challenged by athletes and for good reason. Jumping into the shoes of the athlete, why would you cause a stir if your next best option is a 9 to 5 that you have no interest in…

99 times out of 100 the athlete would probably just suck it up move to wherever and play footy, even though it causes them issues with sponsors and family members.

WHAT IS A DRAFT ANYWAY?

The theory behind drafting systems is that they can regulate sporting competition and even out the field of competition. Drafts have two primary functions:

(a)   one is to control the entry of players into a particular sport, this is known as the external draft;

(b)   the second function is to control the movement of players already within the competition and this is known as the internal draft.

Believe it or not there was a time when athletes did not earn good money for playing sport professionally, especially in Australia. Many athletes had to work full-time jobs and fit their training around their employment. Understanding the life these athletes lead set you up for understanding what happened next.

In 1991 Terry Hill disputed his NRL draft selection when he argued an unreasonable restraint of trade was imposed on him, as the draft had restricted his movement and his choice of employer, especially as he had agreed to go to another club before the draft but was sent to another club. Terry Hilly successfully challenged the draft and as a result, the National Rugby League (‘NRL’) has not implemented a draft.

But why, what is the issue this still happens in many other sports today?

It all comes down to the athlete’s contracts and the conduct of the clubs arising out of drafts. In Australia, the use of “exclusionary provisions” is the primary focus of part IV in the Competition and Consumer Law Act (2010) (CCA). In order to determine what “exclusionary provisions” are, requires referring to and understanding the relevant sections in the CCA, these are sections 45(2), 4D and 4F. Section 45(2) states that corporations must NOT make a contract, agreement or come to an understanding, which includes exclusionary provisions.

Section 4D defines exclusionary provisions as two or more competing parties who have come to some form of agreement, for the purpose of restricting goods and services to persons or classes of persons.

It is important to note that, section 51(2) excludes matters relating to employment contracts and or agreements, even though they may include exclusionary provisions. Therefore, many athletes seeking relief from seemingly unfair contracts tend to rely on the common law doctrine ‘restraint of trade’ instead of a breach under section 45 of the CCA.

The case of Hughes v Western Australia Cricket Association Inc (1996) 19 FCR 10 (Hughes)(WACA) is an example of an exclusionary provision being used at the expense of the athlete. In this case, Hughes was banned from playing cricket for any club within Western Australia because of an agreement between the WACA and its member clubs. The agreement excluded all players from competition if they had participated in any cricket matches outside of the commonwealth.  In this case it was held that the agreement between the clubs imposed an unreasonable restraint of trade on Hughes and the court ruled that the agreement between the sporting corporations was invalid.

In Adamson v News South Wales Rugby League Ltd (No 2) (1991) 31 FCR 242 (‘Adamson’) it was argued that the draft rules breached section 45(2) of the Trade Practices Act now the CCA; but the ruling by the Court was that the draft imposed an unreasonable restraint of trade and did not breach section 45(2.

Going back to what we just said, “two or more competing parties who have come to some form of agreement, for the purpose of restricting goods and services to particular persons or classes of persons” are classed as exclusionary provisions which are forbidden under the CCA.

On that basis, if the athletes contract requires the athlete to be subject to a drafting system it can logically be seen that there may be a valid legal argument to assert that the athlete should not be traded and or drafted to a particular club if the athlete feels it is an unreasonable restraint of trade. Especially in circumstances where two or more clubs negotiate trades behind the scenes to the athlete’s detriment.

If you would like advice in respect of your circumstances, we are happy to provide you with a free initial consultation to help you determine your next steps (if any). Please contact us 1300 011 123 team@wallaceweir.com.au

Please note that this article is written as an informative piece and that you must not take the contents of this article as legal advice. Wallace Law Group accepts no liability from your reliance on this article.