The AFL wanted Essendon to accept a series of penalties which included exclusion from the 2013 finals, the loss of draft picks for two years, a fine of more than $2.5 million and a suspension of 12 months for coach James Hird.
But the club, incensed by the AFL's release of highly detailed and personal information in the extraordinarily detailed charges laid against the club on Wednesday, is intent on fighting the penalties of the scale proposed, believing the package excessive, with Hird unwilling to accept a 12-month suspension.
The Dons also have placed a higher premium on draft picks than the finals, believing the loss of first- and second-round picks for two seasons would be potentially crippling. Central to the disagreement over penalties has been Hird's unwillingness to suffer a penalty that would imply that he supported the inadvertent doping of players.
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Fairfax Media understands that Essendon, under the leadership of chairman Paul Little, was willing to entertain the possibility of giving ground on missing the finals this year, without accepting that the club had cheated or systematically doped. Essendon was willing to acknowledge - and receive punishments - for its governance failures, but, as Little suggested, will resist a sentence that it believes out of proportion when no doping charges have been proven or infraction notices issued.
Under the penalties discussed by the AFL and Essendon, it understood that the club also faced suspensions for Dr Bruce Reid and football operations chief Danny Corcoran, but that Mark Thompson was facing only a fine.
The AFL proposed that Essendon lose its first- and second-round draft choices this year and in 2014 - a penalty the club now considers excessive, given that the league also wanted it to miss finals and for three of its four senior staffers to be suspended, with Hird receiving the biggest penalty.
Hird would be out of contract when the proposed suspension ceased, having joined the club as senior coach on a four-year deal.
Sources said the penalties offered - and which were being discussed on Tuesday night, before the release of charges against Essendon, Hird, Reid, Corcoran and Thompson - were more detailed, but that the essence of them was loss of draft picks and premiership points, putting them out of this year's finals and a
significant fine. The Bombers could be under financial pressure as a result of the scandal if members and/or sponsors leave, plus the legal and other costs incurred.
Essendon is incensed that the AFL's charges detailed private information.
Little, despite his fighting words, has shown a willingness to negotiate with the AFL, but the release of the charges - and particularly the specific nature of allegations - has raised the temperature significantly.
The AFL is braced for a legal response from Essendon, which may seek to challenge the jurisdiction of the AFL Commission. Essendon does not believe the AFL and Andrew Demetriou have followed due processes, with Hird having called for an independent panel to hear his case rather than the AFL's governing body.
Essendon would be mindful of the catastrophic impact losing draft picks had on Carlton in 2002 when the Blues were punished for cheating the salary cap.
It is believed the AFL has not proposed that Essendon would be prevented from trading back into the draft - via the trading of players - a critical detail. The club would not be restricted from signing free agents either.
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