Effects of Free Agency in Sports

Professional baseball is experiencing turbulence, as the National Basketball Association and the National Football League thrive, the once-beloved American pastime struggles. This decline began in 1976 when the court ruled in favor of pitchers Andy Messersmith and Dave McNally in their fight for free agency (Burns and Ward, Art. 10).

Free agency allows players to select their team after their contract ends, giving them the freedom to choose. Before this, players were required to stay with their original team unless they were traded (Worsnop, Art. 83). After Messersmith and McNally’s victory, twenty-four players entered the free agent market the next year (Montville 100). The introduction of free agency has created financial issues for professional baseball teams, leagues, and labor.

Free agency has led to various team issues, including increased salaries, higher ticket prices, and players lacking loyalty. Since the introduction of free agency, professional baseball players’ salaries have experienced a significant surge. In 1976, the inaugural year of free agency, the average salary for baseball players stood at $52,300 (Montville 102). In the following year, the average salary doubled, and within four years, it had tripled (Burns and Ward, Art. 10).

Even though the average salary was approximately $50,000 in 1976, the first twenty-four free agents earned about $200,000 each in that same year (Montville 102). Presently, baseball players earn approximately fifty times more than the average working man. In 1976, they only earned eight times the typical person (Burns and Ward, Art. 10). The salaries have consistently increased since that detrimental year. Recent studies have indicated that the average player salary is now around $1.2 million (Zipay, Art. 75). With the higher salaries, ticket prices have also surged due to free agency.

Ticket prices before free agency could be purchased for as low as $1 (Stuller, Art. 95). However, in 1982, five years after the establishment of free agency, tickets for Cincinnati Reds’ baseball games cost between $5 and $8 (REDS Baseball). Currently, tickets for the same team range from $6 to $14 (The Drawbridge Estate). The Montreal Expos charge an average of about $10 per ticket while the New York Yankees receive about $14 per ticket (Starr 52). This increase in ticket prices has resulted in a decrease in attendance. In 1995, attendance was declining for twenty-five out of twenty-eight teams and was down overall by approximately 25% (Atkin, Art. 89). As Ross Atkin stated, “the fans are staying away in droves” (Art. 89).

Teams face significant challenges in retaining their players due to free agency. Instead of remaining loyal to their team, baseball players opt to play for the highest bidder. Approximately 27% of players switch teams every year. In 1976, there were 108 American League players aged twenty-five or younger. However, after seven years of free agency, only eighteen of those players continued with the same team (Rogers, Art. 41). The consequences of this mass movement are felt by team owners. Bill Giles, the owner of the Phillies, stated, “…it is increasingly difficult to keep your own players once you develop them” (Rogers, Art. 41). Teams have learned the hard way that free agency has made it challenging to manage a professional baseball team due to high salaries, expensive ticket prices, and disloyal players.

The league has encountered significant issues, such as imbalanced competition, since the introduction of free agency. Smaller revenue teams in smaller cities have been struggling and declining due to the emergence of baseball’s open market. These teams generate less revenue from tickets and television compared to other teams. Many experts argue that “small market teams are at a competitive disadvantage” (Grabarek and Ozanian, Art. 57). Numerous facts support this notion, as seen with the Detroit Tigers earning only $4 million from stadium revenues in 1994 while suffering a loss of over $5.4 million (Grabarek and Ozanian, Art. 57).

Unsurprisingly, the Tigers have consistently had one of the worst records in baseball in recent years. Less wealthy market teams have been disadvantaged in terms of competition. On the other hand, the success of large revenue teams has also posed problems for the league. These big market teams entice the best players with their lucrative contracts, leaving smaller teams without hope (Barrett 23). It is a frequent occurrence to witness a wealthy, big market team overpowering a struggling, small market team (Kurkjian 47).

The New York Yankees, based in the bustling city of New York City, stand out as one of the largest professional baseball teams in the United States. Their broadcasting revenues exceed those of any other team, earning a remarkable $42 million per year (Saporito, Art. 11). In contrast, the lowly Pittsburgh Pirates only manage a mere $3 million annually (Saporito, Art. 11). The Yankees also rake in an astounding $430,000 per game exclusively from ticket sales (Starr 52). With such substantial earnings, it is no surprise that the Yankees and their owner George Steinbrenner are renowned for their extravagant spending habits (Barrett 23). The outcome of this financial prowess is clearly evident as the Yankees emerged victorious in the 1996 World Series (Barrett 23). Moreover, even in the era of free agency, the Yankees continued to excel on the baseball field (Barrett 23).

The team acquired high-priced free agents, leading to their consecutive victories in the 1977 and 1978 World Series (Barrett 23). This disparity in competitiveness has sparked debates across the league. Numerous team owners advocate for equal distribution of income among all teams (Grabarek and Ozanian, Art. 57). They raise concerns about a significant gap between one team’s payroll of $52.1 million and another team’s payroll of merely $15.5 million (Starr 52). To address these concerns, many individuals propose the implementation of revenue sharing, which entails establishing a common fund supplied by the league.

The goal of the system is to give more money to small market teams and decrease the excess funds of big market teams. This fund would come from the combined broadcasting and ticket revenues of all baseball teams (Worsnop, Art. 83). Many baseball officials think that this system could solve the issue of uneven talent distribution in professional baseball. Free agency has caused problems and conflicts for Major League Baseball officials over the last twenty years.

The introduction of free agency in baseball has led to labor problems and an uneasy relationship between players and owners. Since 1976, agents have played a vital role in the sport, managing player contracts, endorsements, and other financial matters. In the past, very few people relied on agents as players handled contract disputes and financial issues themselves (Montville 100). However, according to Tim Kurkjian from Sports Illustrated, sports agents now seem to have significant influence within the industry (47). This increase in sports agents has resulted in a deterioration of personal relationships between players and owners. Professor James B. Dworkin from Purdue’s management school suggested getting rid of players’ agents because owners are dissatisfied with negotiating with them (Worsnop, Art. 83).

The players and owners hold opposing views resulting from free agency in baseball. Owners advocate for a strict salary cap to control team spending, aiming to maintain low salaries and fierce competition (Zipay, Art. 75). Conversely, the players desire the freedom to engage in discussions with any interested teams (Worsnop, Art. 83). Player holdouts have further fueled the conflict between the two parties, with players demanding contract renegotiations and then refusing to participate (Barrett 23). Labor disputes, including strikes, have been a significant challenge for baseball, with eight occurrences since 1971 (Starr 48). The most recent dispute lasted 234 days, taking place in 1994 (Smith, Art. 89).

Baseball’s betrayal of its fans occurred when it participated in an eight-month strike, causing the delay of the 1995 season (Barrett 23). These discussions took place in order for the league to reach an agreement on a labor contract. The impact of free agency on baseball is evident as players and owners consistently disagree on the movement restrictions that should be included in these contracts (Worsnop, Art. 83). Consequently, the presence of a free market in baseball has led to labor disputes and personal animosity between players and owners.

Baseball is facing a crisis, as it tries to recover from its current dire situation. Attendance has reached its lowest point, with fans feeling disillusioned and angry due to strikes and inflated ticket prices that have plagued the sport for the past two decades. Additionally, small market teams are struggling to stay financially afloat (Greising 40). This turmoil that baseball is currently enduring can be traced back to the moment when Andy Messersmith and Dave McNally were granted free agency status. Since then, the sport has been plagued by an overwhelming number of issues related to teams, leagues, and labor.

Works Cited

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