Sport versus freedom of movement

Great Debates
1

I’m not sure whether this is a General Question or a Great Debate, but here goes. In recent years, football in Europe has dealt with a number of legal issues. The most notable of these was the Bosman ruling:

More recently discussions have indicated that this will be applied to non-EU players when their contracts expire, and even to players under contract – i.e. allowing them to move to other clubs without their current employers receiving a transfer fee. This caused a lot of muttering about the “death of the game” in the UK, with small clubs fearing the loss of their main source of income. In my job, though, I can resign at any time, subject to contractual limitations like a notice period.

My question: can sporting restrictions be reconciled with free movement of trade? Why are professional sportspersons not considered to have the same rights as employees in any other field? Can this difference be defended?

2

hehehe, mattk, Europe is about to experience the grand fun known in America as free agency. It has totally transformed the way in which sports teams are staffed with players in this country. Of course, as courts here recognized beginning in the 70’s, you can’t consider sports players any differently than you do any other laborers, and restraint of trade is restraint of trade whether the tradesman is a carpenter or a hockey goon.

The reason that the Bosman ruling presents difficulty for European soccer (actually, for soccer anywhere BUT in Canada and the US) is that soccer in Europe is NOT modeled on the league-franchise rubric we use here. Instead, clubs form teams which they enter into the competitions established by the national organizations in charge of the sport. These clubs invest a considerable sum of money in the development of young players, money which they feel they cannot recoup if the player can then transfer to any other club’s team without the club being compensated.

Now, let’s face it. This issue isn’t going to kill all European soccer, it will just modify the rubric. Manchester United is not going to be much affected; arguably neither will a club like, say, Everton, which will always have the financial resources to stick at or near the top flight. But for a club like Wrexham, it totally transforms the situation, for no longer can they hope to capitalize on the value of some gifted youngster, translating a 200,000£ transfer fee into a revamped front line with the chance to move up to First Division, where they can get better revenue and potentially stay at a higher level. Now, clubs will have to find OTHER ways to maintain cash flow. Probably, if they are to avoid a situation where they become TOTALLY stratified on the basis of inherent cash-flow potential, they will have to come up with some sort of revenue sharing agreement, in the same way that our National Football League has done.

Meanwhile, the result for football will be a positive one. The top flight clubs will be able to field the best players, without having to wait for a lower level club to decide that they can’t just hang on to good-old Johnny Screamingshot in the hopes of making promotion. Yes, there will be some increased movement of players; in America, you can’t hardly keep track of your team’s roster because of the way free agents move about. But I haven’t seen that it harms American sport. Despite warnings of dire consequences at the time, professional sport since free agency has seen boom times. Baseball, American football, basketball, even hockey are at all-time highs in terms of the money they are sucking in. Have fun, Europe!

3

Looks like it’s worth a debate to me. Don’t know if it’ll be a ‘great’ one.

I would say that contracts should hold unless they were signed under the misconception that they wouldn’t be able to move regardless of the contract. If the players had previously not been allowed to move and they had no reason to think that they would be allowed to then that part of the contract could be void. In the future, I would say that contracts should be worded very carefully, and teams should discuss a fair standard set of clauses. Perhaps the league can agree to abide by rules stating that teams would pay transfer fees as a part of their requirements for continued membership in the league.

I can leave my job with a reasonable notice, but if I’d signed a contract for a set period then I would be bound.

4

It’s a strange situation for me. On the one hand, I understand why freedom of trade and movement is a good thing. On the other hand, I support a small Second Division football club whose main income is from transfer fees. The main non-transfer revenues in the English game are TV rights, and the current set-up massively favours the Premier League clubs. I don’t believe my club could survive on its meagre share of the broadcasting revenue. I don’t think you could run a multi-division league with relegation and promotion – there simply won’t be the interest in lower divisions from media companies.

How does the franchise system work in the US? Is a player free to change clubs at any time? Are there any kind of transfer fees at all? Are sportspeople basically treated the same as any other trades?

5

But you can still resign, right? There might be notice clauses or penalties of some sort, but if you accepted those you could leave fairly quickly and find a new employer without your previous employer demanding money from them.

6

Leeds United just signed up Rio Ferdinand for £18mill(too much for a defender at todays rates IMHO - and I’m a Leeds fan)

I cannot believe that they or any other big club would be signatories to such contracts if they had not sewn this type of contract up with financial compensation packages if the player decides he no longer wishes to play for his current team.

At the moment even if a player wishes to move he is barred from even discussing options(more usually his agent)
Once all this comes in all it is likely to mean is that compenstaion will be set according to some formula in the original contract but the player will be able to go wherever he wants whenever he wants provided that someone comes up with the cash.

That’s the only differance I envisage, the Bosman ruling was differant because his team would not release him even though he had completed his contract and FIFA backed the club.

7

Just so I’m clear on this:

Does “professional football” in the context of this thread mean “soccer,” or does it mean “NFL Europe”?

8

Soccer in Europe, with implications for other sports within the EU. The OP was meant to be more general, wondering whether differences in employment status between sportspeople and other trades are defensible.

9

There are many differant viewpoints on this, some are extremely dissatisfied with the current system where money is used as leverage to undermine opponents by disrupting the teams of rivals - after all what shareholder meeting would be happy if a bid of £50mill or so was rejected ? despite the fact that the player involved might not even fit into the purchasing clubs team all that well.

In some European leagues there are only a handful or even only two realistic contenders for the top trophies.
In the Champions league you can say that there are maybe five clubs that can realistically hope to win, if you can undermine one or two of your rivals with fincial power to prise vital players away then the huge tv rights and other sponsorship deals that accrue from your success will justify the outlay.

A system that breaks this type of thing up might actually improve competition in the longer run.

Look here to see the concerns of non-Europeans in Euro soccer

http://www.vanguardngr.com/28082000/mf130080.htm

There was an article in The Dail Telegraph 30 Nov 2000 (I’m not a big fan of this right wing rag!) which stated that the European Commisson might well look on soccer as a special case, not surprising since it has been under tremendous pressure from Britain, Italy, Spain and France.

Here is a reasonable explantion of some concerns(BTW the ITN website is a great resource too)

http://www.itn.co.uk/specials/August2000/0831/0831fifa.shtml

10

I’m bumping this as I’m hoping that some US dopers will explain the NFL draft sytem to me (I suspect that this was the OP’s intent too)

From the little I know about this, it would seem that players can end up contracted to Teams without their express approval.

I’m also vaguely aware that this has been throught the courts too.

11

casdave, the draft was originally an agreement among the owners of teams in a league as to who would get the ‘right’ to contract the services of any given player. Drafts occur in Major League Baseball, the National Basketball League, and the National Hockey League, as well as the NFL. Thus, any given player found his options limited to negotiating with whatever team held ‘his’ rights (a very misleading way of putting it deliberately used by the leagues to confuse what was actually going on: restraint of trade). The only option a player had was to contract with a different league, but usually there was only one major league in each sport, making that difficult. For a short time in the late 40’s, and from 1960 to 1967, American football had two top-flight leagues, allowing players at least some little option of who they ended up working for, but it was not much of a choice.

Now, a draft is the agreement between a union of the players and a group of closed shop employers (the league). In the agreement, the union gives up the right of its members to negotiate with whichever team they wish, in return for pay concessions by the employers. After some specified length of time, this restriction on negotiation is removed, and the players become ‘free agents’, able to sell their services to the highest bidder. Someone with more understanding of the ins and outs of it can explain just how this works in detail for American footy and for baseball (i.e., how long one has to work as a player first, what compensation the clubs give up, etc.).

For an example of how a really good player can thwart the will of the league and ignore the draft, read up on John Elway, the talented former quarterback from Stanford University, who refused to contract with the Baltimore Colts when they drafted him, and ended up playing for the Denver Broncos at his request, when the Colts finally gave up their efforts to bring him to heel, so to speak.

12

American football and NBA basketball are both set up with a combination of limited free agency and a salary cap for each team.

Every year, teams in each league are told that they can spend X number of dollars in salaries. If a team exceeds it salary cap, there are some pretty harsh remedies, such as heavy fines and loss of future draft picks.

The NBA has a bit more flexibility under its salary cap in that players already on a team who are eligible for free agency can be resigned for basically any salary regardless of the cap. This is referred to as the “Larry Bird exception.” This allows NBA teams to keep their best players if they want to shell out enormous amounts of cash. If a player tries to sign with another team, his salary is limited by the amount of money available by that team for sigining new players. Rookie players all receive identical contracts in the NBA now also.

The NFL is slightly different. It has what is known as a “hard” cap. There is no wiggle room once you get to the limit. If Joe Superstar’s contract calls for a raise that puts the team over the cap limit, then somebody else’s salary has to be cut loose. (Often times, it’s Joe Superstar who gets cut loose.) There is also something called a “Franchise Player”, where a team can choose one player for that role. That player then becomes ineligible for free agency as long as the teams pays him close to what other “franchise players” are making (about $4.25 million per year). (I’m really oversimplifying this.)

Baseball is much easier to follow. After a player has two years in, he is eligible for salary arbitration. If the player and team can’t agree on a salary, each side submits a salary figure to an independent arbitrator and he picks one and that’s the end of the story. After five years (roughly), a player is eligible for free agency. A free agent can negotiate with any team for whatever salary and terms he can get. If the Yankees want to pay Mike Mussina $87 million over six years, no problem. There is no limit to the salary that can be paid to any player or for the team overall. If a team loses a player to free agency, it is compensated by receiving an extra draft pick in the amateur draft, but only if the team offered the prospective free agent the opportunity to go to arbitration first. If the team says, “See ya, we don’t want you around anymore”, it doesn’t get anything in return.

Good luck Europe! It will be a lot of fun!

13

In order to understand the NFL draft you need to understand the free agency system. In order to understand free agency you need to understand the salary cap. In order to understand that you need to understand the collective bargaining agreement. In order to understand the CBA you need to understand the revenue structure of the league.

{{ takes deep breath }}

The NFL gets most of its money from ticket sales, luxury box leases, and 4 national TV contracts with FOX ( the National Conference ), CBS ( the American Conference ), ABC ( Monday Nite Football ), and ESPN ( the Sunday night and Thursday night cable games ). This money is the designated revenue which I’ll get back to. Other sources of money come from merchandising, radio broadcasting rights, TV rights for preseason games, and the sale of franchises, and now apparently thanks to the $kins we have money from charging fans to watch practice. A team owns its preseason rights and radio rights so the money they bring in from those sources is theirs to keep. Some do quite well. I imagine that the Dallas Cowboys Radio Network has affiliates in many parts of the country and the 'Boys get plenty of money to let TV stations air their preseason games ( In the league office the term exhibition game is verboten ). OTOH- the Cincinatti Bengals have to actually pay local TV stations to air their games. In addition, all income derived from luxury boxes is kept by the team ( allowing teams to complain that they need to build them to compete - at the taxpayers expense naturally. ) All of the rest of the money is shared and that is really the lion’s share. Ticket money is split 60/40 with the visiting team and each team in the league gets an equal share everything else. The NFL national TV deals are huge and keep getting fatter ( thanks to you know who at FOX ) and tickets aren’t cheap. Since most of the the money is shared the teams are on close to an equal footing as far as money coming in. Some owners have much deeper pockets than others; however, and are willing to take a finacial loss to secure wins. That’s where the salary cap comes in.

The salary cap was negotiated between the Players Association ( which is no longer a union, having decertified in order to pursue the legal case which won them free agency back in the early '90s ) and the league under the CBA. The cap is a percentage of those designated revenues that I mentioned earlier. This was originally 65% ( just above $40 million per team ) back in 1994. The deal has since been renegotiated and I believe that the players now get 68%-70% of designated revenue with the cap now at just over $60 million and still going up.

The salary cap is a hard cap. That is, all money paid to players counts against the cap. The Oakland Raiders recently had a 2nd round pick die just a few days after they signed him to a deal. They petitioned the league for an exemption for that money and were denied. There are only 2 ways to wiggle more money into your team. The first is the relatively harmless practice of converting salary to performance bonuses, which has limitations, and giving out big signing bonuses. Signing bonuses are prorated across the length of the contract.
An example: The San Fransisco 49ers need some room under the cap so they go to Jerry Rice. Rice is scheduled to make $5 million this season but they ask him to sign a new deal to help out the team. Instead of his salary he gets a new deal for $1 million this year and a $4 million signing bonus. The new deal is for 4 years so only $1 million dollars of it counts against the cap this year. So instead of having Jerry Rice count as $5M against the cap ( this is refered to as a player’s cap number ) he only counts as $2 million.

The catch to this is that next season he is going to count another $1M plus whatever he was supposed to make ( presumably around $5M again ). If you cut a player then all remaining prorated salaries count either this season, or against the cap for the next season if the player is cut after certain date. The money counting against the cap for players no longer with the team is refered to as dead money and it can be a killer. The 49ers employed this trick so many times that they are looking at a whole lot of dead money this season and next and have been forced to play a lot of rookies because they couldn’t afford anyone else. If Jerry Rice wants to continue to play in the NFL after this year he most likely will have to go to another team; the 49ers are no longer able to afford his services.

Now to the draft.
Players are drafted out of college by teams in inverse order of finish. The teams at the bottom last season get to pick first in each round. There are 6 rounds and the trend has been toward fewer rounds. Before free agency there were 12 rounds and there used to be 20. Once a player is picked he can not sign a deal with any other NFL club. Undrafted rookies are free to sign with anyone and many of their phones start ringing the minute the draft is over. They have more choice but they will lose out on a lot of cash. Draft position is important because the CBA includes a rookie pool. Players who haven’t earned one year of service in the league fall under the rookie pool. ( A rookie is specifically a person who is new to professional football. Someone who failed to make it with another team last season or who has played in another league is called a first year player.) A small portion of the total cap money is set aside to pay these players. This money is allocated to the teams based on the picks themselves. That is, the 1st pick is worth so much of the rookie pool, the 2nd pick is worth a bit less, and so on. So the amount of money a team has to spend on rookies and first year players depends on where the team drafts its players. So draft position is very important to a player as it basically comes with a salary slot that they are going to fill.

So from a player’s perspective it looks like this:
You are drafted by a team in a certain draft position. You can’t negotiate with any other team and there is a certain amount of money that is set aside for you to make. It is not in your interest to dawdle over your contract. There is no requirement that the team must spend the money from your draft position on you. The team has a certain amount of money to sign rookies and once it is gone then they are only allowed to sign nonveterans for the league minimum. So draftees are encouraged to sign quickly before the money is gone and they usually do. If a player were to try today to do what John Elway did then the teams now have a recourse under the CBA. If a rookie doesn’t report to training camp on time ( this is often mistakenly called a hold out. A true hold out is by a player who is under contract and still fails to report. Rookies or anyone who doesn’t have a contract but can’t negotiate with anyone else- known as an exclusive rights “free agent”- isn’t holding out, they just haven’t come to terms. ), anyways if the rookie doesn’t show up then the team has the option of sending him a 5 day letter. Upon recieving the letter a rookie has 5 days to report or they automatically become ineligible for the first game of the year. Additional days without reporting cost the player, and the team as well, more ineligible games. After a certain number of games lost ( I think that it is 2 ) the team loses the right to trade that player. So a draftee’s choices are limited. He pretty much just signs with the team and gets on with life. If no deal is reached then the player must sit out the season and may reenter the draft next year. But the team that was unable to sign him will recieve a compensatory pick and there is no guarentee that they will not redraft the player.

So if a player is unhappy with the team that picked him he now has free agency on his side. After 2 seasons a player can become a restricted free agent. A restricted free agent can negotiate with other teams but the original team has a right of first refusal. They can choose to match the offer or take a draft pick from the team that signed their guy. Again a players draft status is important. The higher he was picked the higher the draft pick his new team must give to his old.
After three seasons a player is is eligible for unrestricted free agency. His original team has no right of first refusal but can name him a franchise or transitional player. Each team is allowed to use the franchise tag on a single player. A team that signs a franchise free agent owes the other team 2 first round picks! ( I’ve only seen this happen once mostly they resign with the team. ) The transition tags were given out as a sop to the owners during the CBA which introduced the free agency period. I’m not sure if any still exist but they were similar to the franchise tag though instead of requiring the team to pay the player at least the average of the salaries of the top 5 players at his position it required an average of the top 10.

One last thing about free agency from the player’s perspective. You only become one when your contract is up. If you sign a five or six year deal ( and few teams will sign a high pick for any shorter period ) then you won’t get to test free agency until it is completed. Unless your team cuts you, which they can do at any time. There are no guaranteed contracts in the NFL. The chance of injury is too great. In the offseason they can decide not to pay a player’s salary and just get rid of him ( though as I already stated, the team would then have to count all money already paid to the player under the cap ). Once the season is underway the player will stillrecieve his full salary for that year even if he is cut.

Almost done, really. Each team has the same amount of cash to spend for players so there is a lot of parity on the field. Teams that win a lot of games find that after the season is over other teams are eager to sign away their players. Good teams tend to not be able to stay on top for long. Players move around a lot and it is sometimes difficult to know who’s on even your home team. This makes many people dislike the new system.

I really did try to be brief. Honest.
If you have any questions then I would be happy to pontificate ( obviously ).
I hope this is what you were looking for.

14

I give 2sense bonus points for his understanding of the NFL salary cap.

I want to see a similar treatise on the NBA “soft” cap.

15

The ramifications of violating the salary cap in both the NFL and the NBA are addressed here:
http://sportsillustrated.cnn.com/football/nfl/news/2000/12/01/king_salarycap/

16

A quick clarification:
When I said that the Cinncinati Bengals had to pay to air their games I was talking about the preseason games. They recieve the same piece of the regular season TV pie as every other franchise. The reason that they cough up money to get the preseason games on the air is in hopes of selling tickets. The Bungles have been horrible for a decade and have trouble with empty seats at both home and away games.

I would also like to delve a bit further into the franchise tag. I made it sound like it was only applied to one player on each team. This is how it was explained in the press when the free agency era opened and I’m sure that is what the players expected it to be but that’s not how it works.
As an example I will use my beloved Detroit Lions.
You would figure that Barry Sanders would have been the franchise player, right? No, he never was for one simple reason: he wasn’t allowed to become a free agent. From the time Barry came into the league in 1989 player salaries have been on the rise. The Lions would sign Sanders to a long term deal and by the end of it he would be making much less than the other top running backs in the league. When this happened Barry would quietly hold out until the Lions coughed up some more dough. Toward the end of the new contract the same situation would arise. Barry never played out his contract so there was no need to slap the franchise tag on him. Instead the Lions would use it on a key player who did become a free agent that year. And they ( and other NFL clubs ) don’t actually sign those players as franchise free agents; instead they use the tag as leverage. Once you sign a franchise free agent the tag stays on them for the length of the contract. In order to have the tag to use next season teams put the tag a player and just wait. The player can accept a one year contract for the average of the top five players at his position or he can bargain with another team in hopes they will cough up the 2 first round picks it will cost them to sign him. The original team just waits until training camp is getting close then removes the tag after most other teams have already spent all of their money for the year. The Lions did this to All Pro center Kevin Glover and actually got him to sign for less than the average salary of the top five centers. Glover sued the league and won the extra money. Teams are no longer allowed to sign players that they tagged for less than the one year deal they are required to offer the free agent ( termed a one year tender ).

As for the NBA, I am less familiar with the rules, which are complex. It has a soft cap in that some money spent on salaries doesn’t count against the cap. I do know that the situation in the NBA is in flux right now. A few years back the league locked out the players and missed most of a season in order to bring more stability to the rising NBA salaries. There is now a maximum amount that each player can be payed per year. I’m not exactly sure how this is calculated but apparently it has to do with how long you have been in the league and how much money you made last year. It looks like there is a limit on the percentage of a salary increase a player can have each season.

Also, there will shortly be a luxury tax on every dollar over the cap. Since a team can resign any free agent that has been on their roster for three years even if that drives the teams payroll over the cap, many teams try to go out and recruit free agents from other teams before they sign their own guys. Some teams are over the cap. The Portland Trailblazers ( owned by Microsoft co-founder Paul Allen ) are spending close to double what they are alloted. The luxury tax is intended to curb some of that excess spending by forcing the big spending teams to contribute to a pot for every dollar they are over the cap. The pot is then presumeably divided up amongst those franchises which are under the cap.

Here is a Washington Post article that deals with salary cap issues.

17

Thanks all. Plenty of reading for me!

18

In Europe the system of drafts would be illegal, not the slightest doubt about it.

I can see the logic of trying to ensure that talent is spread around the NFL to keep the interest across the broadest spread of teams.

In most Euro nations soccer clubs will sign up players from as young as 9 if they look likely candidates, in South America this is done at even lower ages.

One thing of note that has happened is the ‘lending’ of signed players which is increasingly becoming a feature of the English game.

Most of the top soccer clubs run player acadamies but these are generally very expensive operations, well beyond the means of clubs struggling in the lower reaches of the league.Add to this the fact that players can only be signed up below a certain age if they live within something like 50 miles of a club(to prevent youngsters from having to spend formative years travelling when they should be schooling) and there is a temptation to try find ways around the distance rule.

Cross-ownership either through shares or directly but there are many limitations such as being only with teams from differant divisions.

Clubs such as Leeds United and Manchester United put money into other, much smaller, clubs but not without reason.

A good example is the Leeds United input to Preston North End.

Preston is near to Manchester, moreorless part of it, so a 50 mile radius around that clubs ground makes most potential players also available to sign up for the Manchester United soccer academy, however, Man U can only physically accomodate a certain number of players, demand far outstrips supply so a goodly number will end up with smaller clubs.
By funding Preston NE academy efforts, the condition on the contracts means that as soon as they are able to turn pro, the player will be offered to Leeds Utd first this, effectively, increases the catchment area of Leeds.

You would not be surprised to learn that ManU has looked long and hard at this along with the other top clubs and it is becoming a more common practice.

Any signed up player can sign up with any team he wishes in Europe provided terms are agreed with the players club except where there are contractual options.

Power for European soccer clubs is related to their income which is related to their success on the field, thus the top few teams will stay top as they spend, spend, spend and slowly we are seeing the number of upsets, where smaller teams beat the giants, reduce.

This power is quasi-political too, the most powerful soccer nations tend to have the biggest say when it comes to deciding where to stage the World Cup, an event which itself is so big as to be political in itself.

19

More evidence for that point…Leeds United recently tried to tie up a deal with my club, Oldham Athletic, in which Leeds would pay for Oldham to run a full youth academy in return for first pick of any youngsters. The main reason is that it would effectively allow Leeds access to Oldham’s 50-mile catchment area, which takes in the heavily-populated and football-mad areas around Manchester.