FREE ESSAY ON EFFECTS OF FREE AGENCY IN SPORTS

EFFECTS OF FREE AGENCY IN SPORTS

Professional baseball is in a state of turmoil. While the National Basketball Association
and the National Football League are prospering, America's favorite pastime is faltering.
It is no coincidence that this downward spiral began in 1976. That year the court decided
in favor of Andy Messersmith and Dave McNally, two pitchers fighting for their own free
agency (Burns and Ward, Art. 10). Free agency grants players the ability to choose what
team they want to play for once their contract expires. Prior to this case players were
confined to stay with their original team. They only changed teams if they were traded
(Worsnop, Art. 83). Once Messersmith and McNally won their case, twenty-four players
tested the free agent market the following year (Montville 100). Free agency has caused
team, league, and labor problems in the financial world of professional baseball.
Free agency has caused many different team problems, such as high salaries, high ticket
prices, and unloyal players. Professional baseball players' salaries have skyrocketed
since the conception of free agency. In 1976, the first year of free agency, the average
salary for baseball players was $52,300 (Montville 102). The next year the average salary
doubled. Four years later, the average salary had tripled (Burns and Ward, Art. 10). Even
though the average salary was about $50,000 in 1976, the first twenty-four free agents
earned about $200,000 each that same year (Montville 102). Today, baseball players make
about fifty times more than the average working man. In 1976 they made only eight times
the typical person (Burns and Ward, Art. 10). The salaries have steadily increased since
that destructive year. The latest studies have shown that the average player salary is
now approximately $1.2 million (Zipay, Art. 75). Along with the higher salaries, the
ticket prices have also soared as a result of free agency. Ticket prices before free
agency could be purchased for as low as $1 (Stuller, Art. 95). In 1982, five years after
free agency had been established, tickets cost between $5 and $8 for the Cincinnati Reds'
baseball games (REDS Baseball). Tickets for that same team currently range from $6 to $14
(The Drawbridge Estate). The small market Montreal Expos charge an average of about $10
per ticket. The large market New York Yankees receive about $14 per ticket (Starr 52).
Since the ticket prices are higher, fewer fans can attend the games. In 1995 attendance
was on the decline for twenty-five of twenty-eight teams, and was down overall about 25%
(Atkin, Art. 89). Ross Atkin, a writer for the Christian Science Monitor, stated, ... the
fans are staying away in droves (Art. 89). Teams have also encountered major problems in
keeping their players because of free agency. The baseball players have decided to play
for the highest bidder instead of remaining loyal to their team. Nearly 27% of the
players change teams each year. In 1976 there were 108 American League players
twenty-five years old and younger. After the first seven years of free agency, only
eighteen of those players remained with the same team (Rogers, Art. 41). The owners are
feeling the repercussions of this mass movement. Phillies owner Bill Giles remarked, ...
it is increasingly difficult to keep your own players once you develop them (Rogers, Art.
41). Teams have found out the hard way that free agency has made it increasingly
difficult to run a professional baseball team with the high salaries, high ticket prices,
and unfaithful players.
The league has experienced major problems, such as lopsided competition since free agency
began. Small revenue teams have been faltering and deteriorating with the development of
baseball's free market. These teams, located in smaller cities, make less money off of
tickets and television revenues than most teams. The argument of many experts is that
small market teams ... [are] at a competitive disadvantage (Grabarek and Ozanian, Art.
57). Many facts support this philosophy. The Detroit Tigers made only $4 million off of
stadium revenues in 1994, and lost over $5.4 million (Grabarek and Ozanian, Art. 57). Not
surprisingly, the Tigers have maintained one of the worst records in baseball the past
few years. The teams in less wealthy markets have been dealt a competitive handicap. The
other side of the spectrum has involved the success of the large revenue teams, which has
also given the league problems. Large market teams are luring the best players with their
lucrative contracts, and leaving the smaller teams hopeless (Barrett 23). It is common
practice to see a wealthy, big market team overpowering a struggling, small market team
(Kurkjian 47). The Yankees are located in one of the biggest cities in the United States,
New York City. They bring in more money from broadcasting revenues, $42 million per year,
than any other professional baseball team. The lowly Pittsburgh Pirates' $3 million per
year pales in comparison to that haughty figure (Saporito, Art. 11). The Yankees also
make an unparalleled $430,000 a game from ticket sales only (Starr 52). With all this
money they make, the Yankees and owner George Steinbrenner are known for their exorbitant
spending (Barrett 23). It is no coincidence that New York won the World Series in 1996.
Even in the years following the conception of free agency, the Yankees were a very
successful team. They were loaded with expensive free agents, and they succeeded in
winning back-to-back World Series titles in 1977 and 1978 (Barrett 23). This competitive
imbalance has caused arguments to brew up all throughout the league. Many owners believe
all the teams should share their incomes equally (Grabarek and Ozanian, Art. 57). They
see a big problem with one team's payroll reaching $52.1 million, and another team's
payroll being only $15.5 million (Starr 52). Many people think a common fund should be
supplied by the league, a policy called revenue sharing. Its purpose would be to supply
small market teams with more money and to take some the big market teams' extra money
away. The source of this fund would be the broadcasting and ticket revenues of all the
baseball teams combined (Worsnop, Art. 83). Many baseball officials feel this system
could heal the unproportional talent distribution that professional baseball experiences
today. Free agency has caused problems and disagreements for Major League Baseball
officials throughout the last two decades.
Free agency in baseball has led to labor problems and an uneasiness between the players
and owners. Since 1976 sports agents have become a significant part of baseball. Sports
agents handle the players' contracts, endorsements, and any other financial endeavors
they may need to deal with. Before free agency and high salaries kicked in, hardly anyone
dealt with an agent. The players would simply handle their contract disputes and
financial problems themselves (Montville 100). Now, according to Tim Kurkjian, a baseball
writer for Sports Illustrated, Agents seem to be running baseball (47). This development
of sports agents has caused a lack of personal relations between the players and owners.
Professor James B. Dworkin, a baseball expert and the associate dean of Purdue's
management school, recommended, ... take away players' agents. The owners hate
negotiating with these agents (Worsnop, Art. 83). Free agency has caused differing
opinions to evolve between the players and owners. The owners have insisted that the
league enact a harsh salary cap which would limit how much money each team could spend on
their players (Zipay, Art. 75). They feel this action and other player movement
restrictions would keep salaries low and competition high. The players want to be able to
converse with any teams interested in them (Worsnop, Art. 83). The conflicting feelings
of the players and owners have been kindled by player holdouts. A player demands to
renegotiate a contract and then holds out (Barrett 23). A very large labor problem
baseball has had to face is the threat of strikes. Since 1971 there has been some sort of
work stoppage or strike eight times (Starr 48). The most recent dispute occurred in 1994,
and lasted 234 days (Smith, Art. 89). Baseball betrayed its fans by taking part in a
strike that lasted eight months and delaying the beginning of the 1995 season (Barrett
23). These debates took place so that the league could agree on a labor contract. Free
agency has affected the game of baseball so much that the players and owners continually
argue about what movement restrictions must be placed in these labor contracts (Worsnop,
Art. 83). As a result of baseball's free market, players and owners have developed labor
problems and personal resentment towards one another.
Baseball is scrambling to get out of its hole. The attendance is hitting rock-bottom. The
strikes and high tickets prices over the last twenty years have left the fans bitter and
upset at the game they once loved. Small market teams are fighting for their financial
lives (Greising 40). This terror baseball is experiencing all began on the day Andy
Messersmith and Dave McNally were declared free agents. Since that time baseball has gone
through an unbelievable amount of team, league, and labor problems.
Bibliography
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