An Excerpt from "Sports Are Worth How Much!? And Other Questions In Pro Sports, Answered (Kind Of)"
Author Justin Bedi, @JB_trade
The following passage is an excerpt from Justin Bedi's Sports Are Worth How Much!? And Other Questions In Pro Sports, Answered (Kind Of), from the chapter “The History and Impact of Unions In Pro Sports”. It has been edited and condensed to appear in this publication.
“Love them or hate them, unions are a part of the way the working world is organized.
The labor movement has touched virtually every corner of the globe and has impacted every industry, from steelmaking and car manufacturing, to the public service and piloting, to the world of professional sports.
Unions are undoubtedly controversial; on a scale from nuisance to difficult problem, business owners see unions as industry death knells, and on the other side, workers see them as vital to protecting their rights. The debate over the impact and effectiveness of unions is fraught with realities, myths, and hyperbole, and this is particularly true of the professional sports industry, because every part of sports is exciting—even the unions.
Unionism in professional sports boils down to an inherent conflict between billionaire owners and millionaire athletes—the kind of drama that drives daytime soap operas. And due to the overwhelming popularity and cultural significance of professional sports in the U.S. and Canada, the everlasting drama between team owners and athletes has been highly publicised and made accessible to the public.
Basically, it’s cool to be in the know about professional sports unions. You probably didn’t think that it was, but it is. Trust me, sports unions are an excellent topic at family dinners. Even first dates.
…I can sense that you don’t believe me. That’s good; sports unions aren’t really a good topic for first dates.
The early years of sports unionism were both tremendously difficult, and incredibly rewarding. In the case of each players’ union, owners were reluctant to concede to their demands without the threat of legal or collective action, which is no different than how unions and employers interact in every other industry.
In the NBPA’s case, it was the threat of boycotting the league’s first televised All-Star game that proved most fruitful.[1] Initially, progress was slow, but significant gains were made for players in the 50s and 60s, particularly in wages, insurance, health benefits, and pension plans—hallmarks of today’s labor movement. What eluded most of the unions for many years though, and what would come to define the role of sports unions in the second half of the 20th century, was the battle for free agency—the right to labor mobility.
The Big Fight
Free agency is crucial for professional athletes. Having mobility and a choice in where to play, for how long, and for how much money, are the primary considerations involved in players signing with teams today.
Professional athletes, particularly star athletes, are a rare commodity, and competition for them is fierce—meaning in free agency, the highest bidder usually wins. Imagine a world where NHL players can’t sign with other teams once their contract is finished, and their current team has rights to their services in perpetuity. In that world the hockey player’s salary isn’t determined by the market—it’s whatever the player’s current team is willing to pay him, even if he’s Mario Lemieux or Connor McDavid. Unless that player holds out and refuses to play, he’s going to earn whatever his team wants to pay him, because they can’t go play anywhere else. This is the sports world without free agency.
In the MLB, player mobility was restricted by the league’s reserve clause—which bound players to the team they were on even after their contract was up. It wouldn’t be until 1975 when this rule was abolished. How did the union do it? Take a wild guess, I’ll wait.
….(waiting)….
If you chose “lawsuit”, you are correct! Curt Flood, a baseball player, filed a lawsuit against the MLB in 1970 and its owners that alleged that the reserve clause was in violation of U.S. antitrust laws and the thirteenth amendment of the U.S. constitution—which deals with slavery and servitude. Unfortunately for the players, the judge ruled in favor of the league and stated that antitrust laws did not apply to baseball. The ruling would be upheld by the U.S. Court of Appeals of the Second Circuit as well as the U.S. Supreme Court. It would take a relaunching of the case, and in arbitration, not court, for it finally to be ruled in 1975 that the reserve clause only provided teams with the right to one extra year of a player’s services upon expiry of their contract—no more.[2]
The NBPA’s fight for full free agency would take decades, beginning in the 1970s and not concluding until 1995. As the MLBPA did, the NBPA filed an antitrust lawsuit against the league in 1987 and won a favorable initial ruling in 1988. The NBA owners didn’t want the legal action to proceed any further, so they acquiesced and provided an improved form of restricted free agency. In this new system, the right of first refusal rule, which gave teams the first right to players after their second contract was up, was eliminated, and veteran players gained unrestricted free agency. In 1995, players won the right to complete unrestricted free agency for all players once their first contract expired.[3]
The NFLPA’s free agency fight was similar to the NBPA’s. Initially, NFL players were subject to the Rozelle Rule, which kept players on the same team even after their contracts were up. In 1976 a new agreement between the NFL and the NFLPA undid the Rozelle rule and instituted a free agency system in which teams could sign a player once his contract was up with another team, but the new team would have to compensate the player’s old team with a first-round draft pick.[4]
The move to this system was originally considered a victory, but players quickly realized that owners were not willing to surrender a first-round draft pick just to sign a free agent, nor were they keen to pay the free agent’s salary, which would likely be higher than a rookie first round draft pick’s salary.[5]
In 1987, negotiations between the NFLPA and NFL began on a new CBA, and free agency was the top negotiating priority for the players. More than anything, the players wanted the ability to choose where they played. The owners were not warm to the idea of unrestricted free agency, and rejected the players’ demands. They did, however, make some concessions, and in 1989, allowed the players at the end of a roster (those not labelled as restricted by teams) to sign with other teams without the attached draft pick compensation rule.[6]
Many court battles later, an agreement for free agency was finally made in 1993, when owners agreed to free agency for players and the elimination of the draft-pick compensation rule. However, to account for the increased player movement and higher salaries that would come with it, the NFL instituted a salary cap to ensure that player salaries, although higher, would not grow out of control. The players also won the right to a percentage of league revenues—a significant and monumental win for the union.[7]
Free agency is something we take as a given now; a world where players couldn’t freely sign with other teams is unfathomable. And if it’s strange to imagine for fans, for today’s athletes, it’s completely out of the realm of reasonable thought. Professional athletes today are, for the most part, in control of their employment conditions—for them, no system other than free agency would do.
From an owner’s perspective, however, the issue is not so simple or easily digestible.
From a team owner’s perspective, free agency is akin to a business hiring a graduate right out of college, and investing time and money in their training and development, only to see them leave when a better offer comes by. In cases like this, the business owner is forced to choose: fork up enough money and throw in enough incentives to keep the employee, or risk losing them to a competitor.
Where do you stand on the debate? Are you pro-union, or pro-ownership? Do you believe labor should be mobile? Do you support a professional athlete’s right to organize and to strike? Or do you believe unions ultimately hurt professional sports?”
To read more about the history and impact of unions in pro sports, and more on the business of sports, check out Sports Are Worth How Much!? And Other Questions In Pro Sports, Answered (Kind Of) at Amazon.com.
[1] “About & History”. National Basketball Players Association. Accessed November 2017. https://nbpa.com/about/
[2] “Our History”. Major League Baseball Players Association. Accessed November 2017. http://www.mlbplayers.com/ViewArticle.dbml?ATCLID=211042995&DB_OEM_ID=34000
[3] “About & History”. National Basketball Players Association. Accessed November 2017. https://nbpa.com/about/
[4] “History”. National Football League Players Association. Accessed November 2017. https://www.nflpa.com/about/history
[5] Ibid.
[6] Ibid.
[7] Ibid.