AFL

Essendon CAS verdict: Welfare fund could discourage legal action by players

Essendon's potential multimillion-dollar payout to the disgruntled 34 players banned for a year could be mitigated if a welfare fund was established, a leading player agent has claimed.

Peter Jess, the manager of former Bomber Nathan Lovett-Murray, said the Bombers should help establish a welfare fund of $20 million, to be run by the AFL Players Association and the AFL.

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He said former Essendon board directors who were at the club when the illegal supplements program was run in 2012 would be willing to personally tip money into the fund, should the AFL agree to use the $2 million fine levied on the Bombers in 2013 as a down payment.

"I think there should at least be a $20 million fund and that would go along way to mitigating the legal action," Jess said on Wednesday.

Jess said he had discussed the issue with former AFL commissioner and ACTU secretary Bill Kelty, whom he said supported the idea.

"It would be administered by the Players Association and AFL, who understand player contracts and their finances," Jess said.

AFL Players Association chief Paul Marsh has already begun compensation discussions with the AFL and the Bombers, with a preference for settling "highly likely" law suits out of court.

AFL chief Gillon McLachlan said on Tuesday the league would do whatever it could to help the players through the darkest period of their lives.

Essendon captain Jobe Watson said on Wednesday the 34 players "were struggling to come to terms" with the decision and their legal team was exploring "any avenues available to us".

A major payout by Essendon – one agent has estimated this could top $30 million should all players be involved – would almost certainly require a rescue package from the AFL, which could also face its own court action for it is the ultimate employer of the players, and responsible for their health and safety.

Bombers chairman Lindsay Tanner said the club had insurance arrangements should legal action be lodged and it would not necessarily require AFL support.

Former coach James Hird is fighting in court to have his insurance company pay for the hefty legal bill for his failed Federal Court action.

If court action is instigated by the players soon, the Bombers would likely have to make preparations in their 2016 financial report for potential payouts.

While announcing a net loss of $1,336,354 for the 2015 financial year, the Bombers said in their annual report that "the company is in discussions with external and internal stakeholders in relation to claims or disputes arising in the course of business. At this point in time, the amount of liability, if any, cannot be reliably quantified."

The report also added that "such liabilities are estimated based on either objective evidence or where objective evidence is not available, management's best estimate".

An estimate for a potential payout in a case with the players would only become clear when papers were lodged.

However, what could hurt the players in the courtroom is that CAS found them wholly responsible for what they were administered, ignoring claims they weren't largely to blame for the peptides program run by Stephen Dank. The CAS panel also pointed out players maintained the secrecy of the program.

The drugs saga has already cost the club almost $5.5 million in legal fees over the past three years, which includes the $2 million fine.

In the 2015 annual report, club chief executive Xavier Campbell said the $1.3 million loss last year was "as the result of a number of unforeseen costs to the business [including] a combination of abnormal costs associated with the ASADA/WADA issue and the impact of a disappointing season on the field".

Revenue last year fell to $58.2 million from $60.9 million the previous year, while the club also had to pay an extra $200,000 to field additional players in the 2015 preseason.

Revenue could take another hit this year but the Bombers remain one of the strongest supported clubs in the AFL.