Free Agency

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Free Agency

A legal status that allows a professional athlete to negotiate an employment contract with the team of his or her choosing instead of being confined to one team. Athletes may become free agents after they have served a specific amount of time under contract with a team.

Free agency allows athletes who are at the peak of their careers to shop themselves out to teams that are willing to pay top dollar and offer the most comprehensive benefits and perks. In 1975, professional Baseball was the first major sport to adopt a formal free agency policy; football, basketball, and hockey followed. Before free agency existed, sports franchises generally held complete control over individual players. Their contracts contained reserve clauses, which specifically bound them to one team. Players who grew unhappy with their team had little leverage; sometimes they might be released from a contract, but their only real hope was that they might be traded to another team.

Star athletes can benefit significantly from free agency. When their contract is up, they may get lucrative offers from rival teams (often multiyear contracts worth millions of dollars). For athletes who are less successful, free agency means that if their contract is not renewed, they may be unable to find a spot on another team. Still, the free agent system has helped athletes across the board because it forced teams to raise salaries for all players, not just free agents.

From a team's point of view, free agency can be problematic because it makes it easier to lose star players; those same players also can demand higher salaries. Teams bid for free agents, who usually sign with the highest bidder. In "restricted" free agency, a player is allowed to become a free agent subject to certain requirements. For example, a team might retain the right of first refusal, meaning that it can retain the player if it chooses to match a rival team's offer. Free agents can be restricted on the basis of years served, or age. In professional hockey, for example, a player may become a free agent after completing four seasons, but they hold restricted status if they are under 31 years of age.

In recent years, the term free agent has been used to describe individuals who work for themselves in a variety of situations—independent contractors, home office workers, and temporary employees, for example. Even in-house employees whose skills are so specialized that they are especially attractive to other companies have been called free agents. Strictly speaking, these people are not true free agents. Independent contractors, like free agents, are allowed to sign on with any client or customer of their choosing. Usually, however, they are not contractually bound to any one client the way professional athletes are. A freelance writer, for example, may contract with several clients at the same time. While some clients might ask the writer to sign a promise not to divulge proprietary information, in most cases the writer is not actually prohibited from working with specific companies. Temporary workers have slightly more in common with free agents. They contract with an employment agency, and they are restricted from accepting job offers from the agency's client companies. Usually, however, temporary workers are allowed to sign up with more than one agency.

Further readings

Abrams, Robert I. 2000. The Money Pitch: Baseball Free Agency and Salary Arbitration. Philadelphia: Temple Univ. Press.Berry, Robert C., and Glenn M. Wong. 1993. Law and Business of the Sports Industry. Westport, Conn.: Praeger.

Bodley, Hal, 2000. "Free Agency Brought Big Changes." USA Today (December 22).


Employment Law; Independent Contractor; Sports Law.

See: volition
References in periodicals archive ?
If the Cleveland Cavaliers, which is powered by the super trio of LeBron James, Kevin Love and Kyrie Irving, could go all the way to the 2015 NBA championship then talks of free agency could be put on hold as the team, particularly James and Love, will aim for back-to-back titles in 2015-2016.
Had Moore played out his mandatory six years (at his projected elite level) before hitting free agency at 29, the Rays would've almost certainly been outbid for his continued services by the Haves of the baseball world.
After winning three consecutive World Series, however, the cheapskate A's owner lost his team through free agency, and rebel players like Reggie Jackson went on to charge up several other contentious (and successful) clubhouses.
5) This paper tests the claim that free agency has had no effect on competitive balance.
A universe of unlimited free agency would still require substantial revenue-sharing-lest the big-fish teams be able to outspend the minnows-but that wouldn't be a problem as long as small clubs agreed to use their subsidies on salaries.
Thus Weiler can assert with confidence that the free agency has improved our "welfare," and that the sports "product" has improved immeasurably in recent decades.
9) It is argued in this paper is that, because of the limited eligibility for free agency, the acquisition of free-agent talent is a negative-sum game, and that league parity is more likely the result of free agency pulling superior teams apart than improving inferior ones.
It is the dawn of free agency for owners," says Roger Knoll, a Stanford University economist who worked as a consultant to the baseball Players Association during the 1994 strike.
The two sides compromised on a wide range of issues including free agency, salary arbitration, and the rookie salary schedule, but the new contract did not contain the controversial salary cap that owners had sought to control escalating labor costs.
While Free Agency proved a financial windfall to many younger star players, it seemed to make older players near the end of their careers more expendable.
The Charlotte Hornets won't be shut out in this free agency after signing free agent guard Lance Stephenson stealing him away from the East rivals Indiana Pacers.
option=com_content&view=article&id=5533:every-american-league-approved-major-league-transaction-oct-29-dec-2-2011&catid=30:mlb-news&Itemid=42) from the beginning of free agency to today, now we present the National League