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Effects of Free Agency in Sports

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    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.

    Works Cited

    1. Atkins, Ross. “Empty Seats in Baseball: Now the Fans Are on Strike.” Christian Science Monitor (30 May 1995): 1+. Replicated in SIRS CD-ROM. Ed. Eleanor Goldstein, Boca Raton, Fla.: Social Issues Resources Series, Inc., 1995 Sports, Vol. 4, Art. 89.
    2. Barrett, Wayne M. “Grant Free Agency for All.” USA Today May 1995: 23.
    3. Belsie, Lauren. “Baseball Heads for Period of Financial Turmoil.” Christian Science Monitor (9 Sept. 1992): 2. Replicated in SIRS CD-ROM. Ed. Eleanor Goldstein, Boca Raton, Fla.: Social Issues Resources Series, Inc., 1992 Sports, Vol. 4, Art. 24.
    4. Burns, Ken, and Geoffrey C. Ward. “Game Time.” U.S. News & World Report (29 Aug. 1994-5 Sept. 1994): 60+. Replicated in SIRS CD-ROM. Ed. Eleanor Goldstein, Boca Raton, Fla.: Social Issues Resources Series, Inc., 1995 History, Art. 10.
    5. Donnelly, Harrison. “High Stakes of Sports Economics.” Editorial Research Reports 8 Apr. 1988, pp. 170+. Reprinted in Sports. Vol. 3 (Boca Raton, Fla.: Social Issues Resources, Inc., 1990). Art. 45.
    6. Grabarek, Brooke, and Michael K. Ozanian. “Foul!” Financial World (1 Sept. 1994): 18-20. Replicated in SIRS CD-ROM. Ed. Eleanor Goldstein, Boca Raton, Fla.: Social Issues Resources Series, Inc., 1994 Money, Vol. 5, Art. 57.
    7. Greising, David. “America’s Pastime. Yeah, Right.” Business Week 5 June 1995: 40.
    8. Greising, David. “The Bozos of October.” Business Week 16 Oct. 1995: 50.
    9. Kurkjian, Tim. “Dark Days for Baseball.” Sports Illustrated 21 Dec. 1992: 44-48.
    10. Montville, Leigh. “The First to be Free.” Sports Illustrated 16 Apr. 1990: 98-108.
    11. Pomerantz, Gary. “The Money Changers: At the Root of It All.” The Washington Post 10 July 1983, pp. F1, 4, 5. Reprinted in Sports. Vol. 2 (Boca Raton, Fla.: Social Issues Resources Series, Inc., 1987). Art. 52.
    12. REDS Baseball. Cincinnati, Ohio: Feb. 1982.
    13. Rogers, Phil. “Baseball: A game of nomads.” Dallas Morning News (21 Mar. 1993): 1B. Replicated in SIRS CD-ROM. Ed. Eleanor Goldstein, Boca Raton, Fla.: Social Issues Resources Series, Inc., 1993 Sports, Vol. 4, Art. 41.
    14. Saporito, Bill. “The Owners’ New Game Is Managing.” Fortune (1 July 1991): 86-91. Replicated in SIRS CD-ROM. Ed. Eleanor Goldstein, Boca Raton, Fla.: Social Issues Resources Series, Inc., 1991 Sports, Vol. 4, Art. 11.
      Smith, Claire. “So Far, Fans Don’t Care If They Ever Get Back.” New York Times (28 May 1995): 20+. Replicated in SIRS CD-ROM. Ed. Eleanor Goldstein, Boca Raton, Fla.: Social Issues Resources Series, Inc., 1995 Sports, Vol. 4, Art. 89.
    15. Starr, Mark. “Robbed!” Newsweek 22 Aug. 1994: 47-56.
    16. Stuller, Jay. “The ‘Golden Age’ of Sports?” Kiwanis Magazine (Sept. 1990): 42-45. Replicated in SIRS CD-ROM. Ed. Eleanor Goldstein, Boca Raton, Fla.: Social Issues Resources Series, Inc., 1990 Sports, Vol. 3, Art. 95.
    17. The Drawbridge Estate. Cincinnati, Ohio: 1997.
    18. Worsnop, Richard L. “Free Agency: Pro Sports’ Big Challenge.” Editorial Research Reports (9 Feb. 1990): 82- 94. Replicated in SIRS CD-ROM. Ed. Eleanor Goldstein, Boca Raton, Fla.: Social Issues Resources Series, Inc., 1990 Sports, Vol. 3, Art. 83.
    19. Zipay, Steve. “The Issues: A Guide to Key Elements of the Looming Strike.” Newsday (7 Aug. 1994): 11+. Replicated in SIRS CD-ROM. Ed. Eleanor Goldstein, Boca Raton, Fla.: Social Issues Resources Series, Inc., 1994 Sports, Vol. 4, Art. 75.


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