“Free agency” refers to the ability of athletes to negotiate their own contracts and working conditions in professional sport. Before the 1970s, most professional sports had some sort of reserve system for athletes. In their reserve systems, players were forced to play for a single team-usually for the duration of their careers-under the conditions set by the team owner and the league bosses.
Historically, the sport of baseball had the most notorious reserve system, which had been intact and strictly enforced for decades. The purpose of the reserve system was to allow owners of professional teams to control the movement of players and reduce their salaries. By being forced to play for only one team, players had little choice but to accept the contractual terms and conditions set out for the player. The player, in short, did not have the freedom to offer and negotiate his services on the open market, as is done on all other industries. This significantly reduced owners’ payroll expenses, and increased profits greatly. In North America, the major professional leagues-in the sports of baseball, football, hockey and basketball-all had some form of reserve system.
In the late-1960s and 1970s, however, the reserve system encountered a number of challenges. The most important challenge came from a baseball player, Curt Flood of the St. Louis Cardinals. Flood refused the terms of a trade and offered his services on the open market of the Major League Baseball. When no offers were made, Flood filed suit in American courts under the Sherman Antitrust Act, which makes it unlawful for any business or combination of businesses to maintain a monopoly in any commercial industry. While Flood did not win the case, a series of subsequent legal decisions made it apparent that baseball owners had unreasonable control over their labourers-the players.
The baseball players’ union became more militant as a result of the Flood case. In 1976, a court decision granted players free agency and the right to negotiate the conditions of their labour services much more freely than they had in the past. The move to free agency changed the character of the relations between professional sports clubs and their owners.
Previously, owners worked or colluded together to limit the movement of players. Professional sports clubs acted like a well-organized club. Free agency meant a more competitive environment for players, and of course player salaries have risen substantially as a result.
Today, sports fans often complain that players’ salaries are too high. While certainly at times it seems difficult to justify the huge salaries of today, it should be kept in mind that before the current era of free agency and big contracts, players barely made a subsistence wage, and often worked under conditions of servitude. The situation now might be less than perfect; however, it’s certainly a vast improvement over the pre-free agency days.