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).

Cross-references

Employment Law; Independent Contractor; Sports Law.

See: volition
References in periodicals archive ?
The WHA and Mackey cases both resulted in the overturning of league-imposed free agency restrictions and their replacement by negotiated systems.
The introduction of free agency in 1989 changed the structure of the NFL and produced the potential to equalize the quality of teams within the league.
But Flood became more famous for paving the way for "free agency" in major league baseball, a vehicle that made millionaires out of once very ordinary major league baseball players.
The paired t-tests for both hitters and pitchers show uniformly lower (and, in some cases, significantly lower) performance levels one season after filing for free agency compared to those in the contract year.
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.
That complicated franchise's history works out to a composite figure of 17.6 percent as the expected frequency with which the Brewers should have reached the postseason during the free agency era.
Popular wisdom suggests that free agency is the root of the sport's alleged economic problems.
Free agency, therefore, should not affect competitive balance.
I don't think you're ever going to see that happen again with free agency.
On the question of free agency--the ability of players to sell their services to the highest bidder once their contract runs out--Weiler has this to say: "If we must choose just between the traditional reserve system and unrestricted free agency, the latter is a far better instrument for improving sports welfare--whether viewed as allocative efficiency in enhancing the quality of the game for fans or distributional equity in sharing games between owners and players."
The era of free agency in MLB began with the Collective Bargaining Agreement of 1976, in which the limits of the "reserve clause," which had previously bound players to teams for perpetuity, were reduced to six years of MLB service.
This agreement produced Free Agency and the NFL salary cap, which sets a maximum of $37.1 million on the total player salaries for each team.