AFL Free Agency: Restricted, Unrestricted and Compensation

AFL free agency is the rule that lets a player who has served long enough at one club walk to another without a trade, without his club's permission and without anyone exchanging a draft pick for him. It arrived in 2012, decades after the equivalent existed in North American sport and in European football, and it remains the most contested part of the AFL's player movement system.

The short version is this. Eight years of service at one club, out of contract, and you are a free agent. If you are in the top 25 per cent of salaries at that club you are a restricted free agent and your club can keep you by matching whatever a rival offers. If you are not, you are unrestricted and you go where you like. At ten years of service even the highest-paid players become unrestricted. Any delisted player is automatically an unrestricted free agent. The club losing a free agent may receive a compensation draft selection from the AFL, allocated to one of five bands by a formula the league has never made public.

Everything else is detail, but the detail is where the arguments are: what counts as a matching offer, why compensation is assessed on net rather than gross losses, why a club that loses a star can end up with pick three while a club that loses a similar player gets a third-rounder, and why the AFL will not show anybody the working.

Why the AFL had no free agency until 2012

For most of its history the competition ran on a clearance system and then on a draft, both of which tied a player to the club that recruited him for as long as that club wanted him. The reasoning was equalisation. Australian rules is a single-country sport with a small talent pool, and the league's position was that unrestricted movement would concentrate the best players in the richest and most desirable clubs.

The players' association pushed for free agency for years on the straightforward ground that no other class of Australian worker is barred from changing employer after their contract ends. The compromise reached in 2012 kept the draft, kept the salary cap, and granted free rights only after a long period of service — long enough that most players reach it in their late twenties, if at all.

The predictions made at the time are worth remembering, because most of them did not happen. Clubs in Sydney, Brisbane, Perth and on the Gold Coast were expected to be stripped of talent by Victorian rivals within a few seasons. Wealthy clubs were expected to assemble superteams. Neither eventuated, largely because the salary cap does the equalising work that free agency was accused of undoing: a club can want three marquee free agents and still only be able to pay for one. The competition's list rules, not its movement rules, are what keep the eighteen clubs close together.

What did change was the balance of information. Before 2012 a player who wanted to leave had to say so and hope his club found a trade. After 2012 a long-serving player could tell his club, credibly, that it had a choice between a fair contract now and nothing at all in twelve months. That leverage flows to a minority of players, but it flows to exactly the players clubs least want to lose.

What free agency actually gives a player

Two things. The right to negotiate with any club without his own club's involvement, and the right to sign without a trade being agreed. That second point is the one that changes the balance of power, because a trade can be blocked by a club that refuses to accept any offer, whereas a free agency move cannot be blocked at all in the unrestricted case.

What it does not give him is more money in cap terms. The signing club still has to fit the contract inside total player payments. Free agency changes the route, not the price. In a competition with a hard cap, the difference between the best-paying club and the average one is far smaller than in an open market, so the choice of destination is usually driven by geography, role and the state of the list rather than by the offer alone.

The eight-year clock

Service is counted at one club. Eight seasons on an AFL list at the same club, with the player out of contract at the end of the eighth, is the entry point. A player who moves after five years starts a new clock, which is why mid-career movers rarely become free agents at their second club before their mid-thirties.

There is one important exception. Under a 2019 amendment, a player who has previously moved as a free agent and has not completed eight years at his new club qualifies as an unrestricted free agent. In effect, once you have used free agency once, you do not have to serve the full term again to use it a second time.

Restricted free agents

A player with eight years of service who sits in the top 25 per cent of salaries at his club is a restricted free agent. He may talk to rivals and receive offers, but his club holds a right of first refusal and may retain him by matching.

The category is a compromise. It gives long-serving senior players a genuine market while stopping clubs from losing their best-paid footballers for a compensation pick at exactly the point they become most valuable. It is also the category that produces the most public drama, because a restricted free agent's negotiation is conducted with an audience and with his own club sitting in the room holding a veto.

The top 25 per cent test

The test is applied on guaranteed contract values in the relevant year, including additional services agreement payments, and the AFL assesses it and announces the free agent list before each season.

On a primary list in the high thirties, the top quarter is roughly the nine or ten best-paid players. Because the measure is guaranteed money rather than total possible earnings, a player on a contract weighted towards match payments and performance bonuses can fall outside the quarter while earning as much as a teammate inside it. That produces the occasional listing that looks wrong to supporters and is entirely correct under the rule.

• Restricted at eight years, top quarter of club salaries25.0%
• Unrestricted at eight years, remaining three quarters75.0%

The rule's own threshold, expressed as a share of a club's salary list. This is the definition of the restricted category, not a count of how many players actually become free agents in any given year.

Show the numbers

Where the eight-year clock leaves a player

Item	Value
Restricted at eight years, top quarter of club salaries	25
Unrestricted at eight years, remaining three quarters	75

Unrestricted free agents

Everyone else who qualifies. A player with eight years of service who is not a top-25-per-cent earner is unrestricted and may sign anywhere, with his old club having no right to match and no say in the destination.

This is the largest free agent category in most years and the least discussed, because unrestricted players are by definition the ones the market values less. It is also where clubs with good recruiting departments do quiet, useful business: experienced role players available at no draft cost to a club that has spent its picks elsewhere.

The ten-year rule

Ten years of service at one club makes a player unrestricted regardless of what he earns. The top 25 per cent test simply stops applying.

The ten-year threshold recognises that a decade at one club is a substantial commitment and that a player who has given that should not still be tied at thirty. In practice it means the very best players — who are almost always top-quarter earners — face two distinct windows: a restricted one at eight years, where their club can hold them, and an unrestricted one at ten, where it cannot.

Delisted free agents

Any player removed from a club's list becomes an unrestricted free agent immediately, whatever his service record. He can sign with any club, no trade is required, and no compensation is payable to the club that delisted him.

Delisted free agency operates in the window after the trade period closes and before the drafts, and it matters more than its low profile suggests. Clubs that missed their trade targets, clubs that suddenly have list spots after a retirement, and players who were squeezed out of a full list all meet in the same fortnight. Some very good careers have been restarted there.

It also creates a piece of leverage that gets used during trade week itself. If a club cannot extract a draft selection for a fringe player, it can delist him instead — at which point the rival that would not pay a fourth-rounder can sign him for nothing. Both clubs know this, which caps the price of any marginal player at roughly zero and explains why so many late trade period negotiations over depth players simply stop rather than conclude.

A related device is the delist-and-redraft, where a club removes a player from its primary list with the understanding that it will take him back through the rookie draft. That frees a senior list spot and reduces the salary commitment while keeping the player. It is legal, widely used, and depends on nobody else selecting him first, which occasionally goes wrong in public.

The right to match, and what counts as a match

For a restricted free agent, the existing club may retain the player by matching the rival offer. Equivalence is assessed on contract length, base payments, total match payments and total additional services agreement payments, with performance incentives measured against defined criteria.

Two practical rules follow. First, matching is exact rather than approximate, so a club cannot retain a player by offering something broadly similar. Second, a rival cannot game the process with a token deal: an offer of less than two years does not trigger the matching mechanism at all, which stops clubs from constructing artificial one-year offers designed to be unmatchable.

1. 1QualificationThe AFL assesses service and salary rank and publishes the restricted and unrestricted free agent lists before the season.
2. 2Offer receivedDuring the free agency window a rival club makes a contract offer of at least two years, which is what triggers the matching mechanism.
3. 3Club decidesThe player's existing club chooses whether to match on length, base payments, match payments and additional services agreement payments.
4. 4Not matchedThe player signs with the new club, and the AFL assesses whether his old club is entitled to a compensation selection.
5. 5MatchedThe player stays on the matched terms, seeks a trade during the trade period, or nominates for the national draft.
6. 6Compensation assessedWhere a club has a net loss of free agents, the AFL allocates a draft selection to one of five bands using its own formula.

The sequence set out in the AFL's free agency rules. Only the restricted category involves a matching step. Unrestricted and delisted free agents skip straight to signing.

Compensation: what the losing club receives

A club with a net loss of players moving as free agents in one transfer period is entitled to compensation in the form of national draft selections allocated by the AFL.

Two features of this are frequently misunderstood. The compensation is not paid by the recruiting club — the recruiting club gives up nothing at all. And the selection is inserted into the draft order rather than taken from someone, which pushes every pick behind it down one place. That is the reason compensation is unpopular with the clubs that receive nothing: they pay for it in draft position.

The five bands

Compensation selections are allocated to one of five places: first round, end of first round, second round, end of second round and third round. Colloquially these are band one through band five, with band one being a genuinely valuable asset and the later bands amounting to a modest consolation.

The gap between band one and band two is enormous in practice. A band one selection can be a top-five pick in a strong draft. An end-of-second-round selection is a fringe list addition. Since the system started in 2012 the AFL has handed out somewhere around 56 compensation picks in total, and only a small proportion of those have been band one.

The formula the AFL has never published

The league has confirmed the inputs. The age of the free agent, and the value of the new contract — guaranteed base payments, additional services agreements, and other benefits including cars, flights and accommodation. Age matters because compensation is meant to reflect what the losing club is actually losing: a 26-year-old on a six-year deal represents a larger loss than a 31-year-old on two.

What the league has never released is the weighting. Clubs cannot model the outcome, agents cannot advise a player on how his contract structure will affect his old club, and journalists cannot check the result against a published rule. The consequence is a long-running suspicion that the outcomes are less mechanical than the word "formula" implies. The AFL's position has been that publishing it would let clubs and managers structure contracts to manufacture better compensation, which is a reasonable argument and an unfalsifiable one.

The gaming risk the league is worried about is real enough to describe. If the weighting were public, a club recruiting a free agent could front-load or back-load a contract, shift money between base payments and additional services agreements, or adjust the term, purely to move the compensation across a band boundary — up, as a favour to the club it is taking the player from, or down, to avoid pushing its own draft selection back a place. Because compensation is inserted into the draft order rather than paid by anyone, a manufactured band one hurts all sixteen uninvolved clubs.

The practical effect on negotiations is that compensation is treated as weather rather than as a term. Clubs plan for a range, not a number, and the announcement is genuinely news to the club receiving it. That is unusual for a professional sporting competition and it is the single feature of AFL free agency most likely to change over the next collective bargaining cycle.

Compensation picks that mattered

Player	Season	Move	Compensation to old club
Lance Franklin	2013	Hawthorn to Sydney	First-round selection, pick 19
Tom Lynch	2018	Gold Coast to Richmond	First selection of the 2018 national draft, pick 3 after bids
Ben McKay	2023	North Melbourne to Essendon	Band one selection, pick 3

Hawthorn for Franklin 201319

Gold Coast for Lynch 20183

North Melbourne for McKay 20233

The national draft selection number each club ended up using after the move. Franklin's was an end-of-first-round selection and the other two were band one. Lower numbers are better picks. Three cases only, chosen because they are the most cited, not a representative sample.

Show the numbers

Where three headline compensation picks landed

Item	Value
Hawthorn for Franklin 2013	19
Gold Coast for Lynch 2018	3
North Melbourne for McKay 2023	3

The Franklin case is the one that shaped opinion. Hawthorn lost arguably the best forward in the competition, in his prime, on a nine-year contract, and received pick 19. Whether that was fair depends entirely on a weighting nobody outside AFL House has seen.

Net loss, not gross loss

Compensation is assessed on the balance of free agents in and out during a transfer period. A club that loses a well-paid free agent and signs one of comparable value in the same window will generally receive nothing, on the reasoning that it has replaced what it lost.

This forces a genuine strategic decision each October. A rebuilding club that has just lost a 27-year-old key position player can either sign an experienced replacement and go into the next season more competitive, or sign nobody and take a high draft selection. Clubs have gone both ways, and the choice usually reveals more about where a club thinks it sits on the ladder than any public statement does.

Free agency and the trade period run together

The free agency window opens first and closes before the trade deadline. In 2025 free agency ran from Friday 3 October to Friday 10 October, while the trade period ran from Monday 6 October to Wednesday 15 October.

The overlap creates a specific problem for list managers. For five working days a club can be paying real draft capital in a trade negotiation for a player another club could simply sign for free. It also creates the reverse opportunity: a club that knows a free agent will not sign elsewhere can let the free agency window close and then negotiate a cheaper trade. The full mechanics of the trade side are in our AFL trade period guide.

Where free agency has actually sent players

The pattern since 2012 has been less dramatic than the pre-2012 warnings suggested. More than a hundred players have changed clubs using it, and the flow has not been uniformly towards the wealthiest or most successful clubs. It has, however, followed the same geography as the rest of AFL player movement — towards Victoria, and towards home states — because free agency amplifies player choice and player choice has always been partly about where people want to live.

The clubs that have used it best are not necessarily the richest. They are the ones with cap room banked a year in advance and a clear idea of the one or two positions they are trying to fill.

There is also a pattern in what kind of player moves. Free agency is dominated by key position players and by proven midfielders in their late twenties, because those are the profiles that are hardest to draft and quickest to change a season. Small forwards and depth players move too, but they move quietly and usually as unrestricted eight-year men rather than as headline signings. A club that treats free agency as a way to acquire one specific missing piece tends to do better than a club that treats it as a way to acquire the best available name.

The criticisms

Four recur. That the formula is secret, which makes the whole system unauditable. That band one compensation selections landing inside the top eight punish clubs that finished low and were not involved in the transaction at all. That the eight-year threshold arrives too late in a career that averages well under a decade, so most players never qualify. And that restricted free agency is close to meaningless in practice, because a club that matches an offer usually ends up trading the player anyway, having spent the goodwill for nothing.

The counter-arguments are equally standard: the thresholds protect competitive balance, compensation protects clubs that develop players, and a system that has produced more than a hundred moves in a decade is plainly functioning.

The restricted-category criticism deserves a closer look, because it is the one with evidence behind it. A club that matches an offer has told the player, publicly, that it will not let him leave for nothing. It has also told him that it values him at exactly the number a rival named. The relationship rarely survives that intact, and the usual sequence is a match followed within days by a trade to the same club that made the original offer, on terms the losing club would have accepted a week earlier. What the match buys, in those cases, is a draft selection instead of a compensation pick — sometimes better, sometimes worse, never free.

The eight-year criticism is arithmetic rather than opinion. The average AFL career is well short of eight seasons, and shorter still at one club, so the large majority of players who are drafted never become free agents at all. Free agency is a right that accrues to the durable and the good, which is defensible as policy but makes the players' association's original framing — that this is a basic labour right — sit awkwardly with how few members actually get to use it.

The changes under consideration

The most concrete proposal that has circulated recently would move band one compensation selections outside the top eight picks, so that the eight clubs that missed the finals make their first selections before any compensation pick is inserted. That directly addresses the loudest complaint without touching the formula.

Publishing the formula itself is raised almost every year and has not happened. Any change to free agency runs through the collective bargaining process with the AFL Players' Association, which means proposals typically circulate for a season or more before they take effect.

Free agency and the salary cap

The contract counts against total player payments in full. There is no free agency exemption, no discount and no allowance. A club that wants to sign two significant free agents in one window has to have created room for both, usually by letting contracts expire or by trading salary out during the same fortnight.

The compensation selection, by contrast, has no cap value at all. This is why a club losing a free agent is in a genuinely better cap position afterwards even if its list is weaker — it has both the pick and the money. Our guide to the AFL salary cap sets out how total player payments are calculated and policed.

How this compares with the NRL

Rugby league has no draft and no free agency category, because it has no restriction to be freed from. NRL players negotiate with any club once they are out of contract and, subject to the November 1 rules on when talks may begin, move on money alone under a hard cap. There are no compensation picks because there is nothing to compensate with.

The AFL's system is more restrictive and considerably more administered. Which is better depends on whether you think a competition should equalise talent or price it. Our NRL salary cap explainer covers league's version, and our comparison of rugby league and rugby union covers the wider structural differences between the codes.

Common misunderstandings

That a free agent costs the recruiting club a draft pick: he does not. That compensation comes out of the recruiting club's hand: it does not, it is inserted by the league. That a restricted free agent can be blocked from leaving: he can be retained by a match, which is not the same thing, and he retains a route out through trade or the draft. That delisted free agency is a formality: it is a real market with real players in it. And that eight years is the only threshold: ten years matters just as much for the best-paid players.

When to check the lists

The AFL publishes its restricted and unrestricted free agent lists before each season, based on service and on the salary assessment for that year. That release, not the October coverage, is the authoritative statement of who is eligible and in which category. Players can drop off it by signing extensions and can appear on it unexpectedly when a contract structure puts them outside the top quarter.

Where to go next

Free agency, the trade period and the salary cap are one system described three ways. Free agency decides who can move without permission. The trade period decides everything else. The cap decides what any of it costs.

Read our AFL trade period guide for the ten-day window and the deadline, and our AFL salary cap guide for total player payments. For context on how another Australian code handles the same problem, see the NRL salary cap explained and rugby league versus rugby union.

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