"Mad Monday" is a traditional day of celebration for Australian athletes in various codes at the end of the season, often involving heavy consumption of alcohol and frequently damaging the image of teams and leagues.
St Kilda, whose season ended on Sunday, hired dwarf entertainers for their celebration at a Melbourne bar and Clinton set alight the clothing of Blake Johnston, the dwarf's colleague Arthur Serevetas told a local TV station.
"A player went behind my friend with one of those gas lighters that you light up a stove and basically lit him up," Serevetas told Channel Nine.
"Part of his shirt and pants caught on fire. After that someone put it out and he got ticked off and we basically left."
Clinton was fined A$3,000 (£1,740) and had offered "his sincere apologies" to Johnston, who performs under the name "Mr Big", for his "inadvertent" action, St Kilda said in a statement.
"I sincerely apologise to Mr Johnston and have done so personally today," the six foot-tall midfielder was quoted as saying.
"As a playing group we were engaged in end of season activities which in hindsight were quite childish. I made an error of judgement in including Mr Johnston in the activity."
AFL chief executive Andrew Demetriou earlier apologised for laughing uncontrollably when confronted with the story on a TV show.
"I thought it was a joke," he told 3AW radio station. "When this was brought up, I just thought it was incredulous to think that this could possibly be. After I found out that it was true, it's just reprehensible. I was flabbergasted."
Demetriou suggested such a prank was the last thing the AFL needed after a season overshadowed by the drug supplements scandal, which resulted in Essendon Bombers being handed the heaviest penalties in the history of the sport.
The Bombers were thrown out of the play-offs, had their coach suspended for 12 months and were fined A$2 million (£1.16million) after being found to have used their players as guinea pigs in an experimental and possibly illegal supplements regime.
The potent combination of a group of young players coming to the end of a long, hard season and alcohol has caused a string of unsavoury "Mad Monday" incidents over the years.
One of the least savoury came in 2010 when former Australia rugby league winger Joel Monaghan was sacked by his club Canberra Raiders after a photograph of the player simulating a sex act with a dog was posted on the internet.