Reserve clause
The reserve clause, in
The only negotiating leverage of most players was to hold out at contract time and to refuse to play unless their conditions were met. Players were bound to negotiate a new contract to play another year for the same team or to ask to be released or traded. They had no freedom to change teams unless they were given an unconditional release. In the days of the reserve clause, that was the only way a player could be a free agent.
Once common in sports, the clause was abolished in
Baseball history
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In the late 19th century, baseball in America became popular enough that its major teams began to be businesses worth considerable amounts of money, and the players began to be paid sums that were well above the wages earned by common workers. To keep player salary demands in check, team owners promulgated a standardized contract for the players, in which the major variable was salary. The players unsuccessfully tried to fight the growing reserve system by forming a union, the Brotherhood, and founding their own Players' League in 1890, but the Player's League lasted just one season. For the next 80 years, the reserve system ruled the game. In this era, all player contracts were for one year. There were no long-term contracts as there are today, because the reserve clause negated the need for them.
The reserve clause's inception was in 1879, when it was proposed as a way to formalize an unofficial rule known as the "five man rule". It would allow teams to reserve players for each season, unless a player opted out of his contract and did not play in the league for a year. While the previous informal rule was not secret, teams had started to sign other teams' "reserved players", thus encroaching the rule. The resulting controversies caused the National League to instate the rule officially on December 6, 1879.[1]
Teams realized that if players were free to go from team to team then salaries would escalate dramatically. Therefore, they seldom granted players (at least valuable ones) a release, but retained their rights, or traded them to other teams for the rights to other players, or sold them outright for cash. Players thus had a choice only of signing for what their team offered them, or "holding out" (refusing to play, and therefore, not being paid).
Under the Sherman Antitrust Act of 1890, two or more non-affiliated companies in any other interstate business were prohibited from colluding with each other to fix prices or establish schedules or rates. Enforcement of the act reached its apotheosis in 1910 when the Supreme Court affirmed the government's order to dissolve the Standard Oil conglomerate.
However, under the reasoning that keeping baseball (the only large-scale professional sport in America during the 1920s) prosperous required granting it immunity from the Sherman Act, The
In 1951,
This pass on "
When other team sports, particularly ice hockey, football, and basketball developed professional leagues, their owners essentially emulated baseball's reserve clause. This system stood largely unchallenged other than by the occasional holdout for many years.
In October 1969,
Removing the reserve clause from player contracts became the primary goal of negotiations between the Major League Baseball Players Association and the owners. The reserve clause was struck down in 1975 when arbitrator Peter Seitz ruled that since pitchers Andy Messersmith and Dave McNally had played for one season without a contract, they could become free agents. This decision essentially dismantled the reserve clause and opened the door to widespread free agency within North American professional baseball.
NFL
On June 18, 1921, the NFL ratified its first constitution.[8] The reserve clause ratified in the constitution was similar to that of baseball's at the time. The reserve clause stipulated that a team had the first opportunity to sign a player after the length of the contract had expired. If the team chose not to offer a contract, then the player could try to sign with a team of his choosing.[9] Theoretically, the reserve clause bound the player "...to his employer in perpetuity".[10] The reserve clause had been abolished in the NFL constitution in 1948 when the option clause was created.[11] The option clause stated that a team may choose to automatically keep a player on their team for another year, at the same pay, after his contract had expired.[12][13] The term, option clause, was not used by the print media and it was instead referred to as the reserve clause.[13] Nevertheless, in the NFL's attempt to gain antitrust exemption from Congress in 1957, Bert Bell still referred to the clause as the option clause (and also as the "option and reserve clause").[14]
Decades later,
There is a franchise tag option that is similar to the reserve clause; however, teams can only tag one player each year, although they can tag the same player for consecutive years. Franchised players are eligible to receive at least 120% of their previous year's salary, and players tagged "non-exclusive" can accept offers from other teams; if the original team does not match the offer, they receive draft picks as compensation. In recent years, many teams have opted not to exercise their right to designate the franchise tag.
NBA
The
NHL
The reserve clause was the basis for the NHL's injunction against the large number of players who had signed with the rival World Hockey Association in 1972, with all but one—against Chicago Black Hawks star Bobby Hull—ultimately thrown out by lower courts. The appellate court, however, sided strongly with the WHA and Hull, calling the NHL's business practices monopolistic, conspiratorial, and illegal. While the reserve clause was not explicitly struck down, the court did effectively block any further injunctions based on the reserve clause, rendering it useless. (The WHA, meanwhile, voted at its founding to abolish the reserve clause.) The end of the reserve clause in hockey remains a significant part of the WHA's legacy, as it ultimately resulted in the evolution of the NHL's modern free agency system.
The highly contentious negotiations between National Hockey League owners and players that led to a lockout, wiping out the entire 2004–05 NHL season, were in part about free agency; the previous system precluded unrestricted free agency before the player reached 31 years of age. Most younger hockey free agents were restricted free agents whose teams could retain them by matching an offer from another club or making a "qualifying offer", which usually consisted of a ten percent raise above the pay in the former contract. Following the 2004-05 lockout, owners eventually agreed to phase in a much lower age for unrestricted free agency (27 years of age or 7 years in the NHL, whichever comes first) in exchange for the players meeting owners' principal demand in the new NHL Collective Bargaining Agreement—an overall salary cap. Nevertheless, the league demanded the re-imposition of the 31-year-old threshold for free agency in the most recent lockout, but when union responded by threatening to disclaim interest and file antitrust suits against the league, the owners backed down.
Major League Soccer
Major League Soccer (
Unlike the other four major leagues of North American professional sport, MLS still retains a reserve clause in every player's contract. For Major League Soccer, this was initially to prevent
See also
- Retain and transfer system, a similar system that restricted player movement in professional association football in England
- Bosman ruling, a European Court of Justice decision that ended a similar system in European association football
References
- ISBN 978-1-56663705-3.
- ^ "Mystery Man New Witness For Baseball". Quad-City Times. Associated Press. May 24, 2018. p. 15. Retrieved March 1, 2022 – via Newspapers.com.
- ^ "Truman Favors Baseball Anti-Trust Investigation". The Tampa Tribune. Associated Press. 1951-07-19. Retrieved 2022-03-06 – via Newspapers.com.
- ^ a b Corbett, Warren. "Voices for the Voiceless: Ross Horning, Cy Block, and the Unwelcome Truth". Society for American Baseball Research. Retrieved March 8, 2022.
- ^ "O'Connor, Ex-Landis Aide, Testifies Before House Group". The Herald-News. Associated Press. 1951-10-16. p. 30. Retrieved 2022-03-08 – via Newspapers.com.
- ISBN 0-97765780-9.
- ^ Flood v. Kuhn, 407 U.S. 258 (1972)
- ^ Willis, 2010, p. 136.
- ^ Willis, 2010, p. 137.
- ^ Algeo, 2006, p. 150.
- ^ Lyons, 2010, p. 186.
- ^ Ruck; Paterson and Weber, 2010, p. 293.
- ^ a b Lyons, 2010, p. 176.
- ^ Lyons, 2010, p. 261.
- ^ Wallace, William N. "Rozelle Rule Found In Antitrust Violation," The New York Times, Wednesday, December 31, 1975. Retrieved December 11, 2023.
- ^ Mackey v. National Football League, 407 F. Supp. 1000 (D. Minn. 1975) – Justia.com. Retrieved December 11, 2023.
- Slate. Retrieved November 26, 2013.
- ^ Fraser v. Major League Soccer, 01 F.3d 1296 (1st Cir. 2002).
- ^ "MLS is most diverse of America's big five team sports". Retrieved September 20, 2014.
- ^ "Stoppage time: MLS players may strike over free agency". New York Post. 25 February 2015. Retrieved February 25, 2015.
- ^ Fraser v. Major League Soccer, 01 F.3d 1296 (US 1st Cir. March 20, 2002) ("MLS owns all of the teams that play in the league (a total of 12 prior to the start of 2002), as well as all intellectual property rights, tickets, supplied equipment, and broadcast rights. … However, MLS has also relinquished some control over team operations to certain investors. MLS contracts with these investors to operate…the league's teams").
- ^ "Dempsey Transfer Highlights Influence of MLS Single-Entity Economic Structure". Business of Soccer. Retrieved September 20, 2014.
- ^ "The Reserve Clause in Soccer". Labor Union. Retrieved February 25, 2015.
Sources
- Algeo, Matthew (2006), Last Team Standing. Philadelphia: Da Capo Press. ISBN 978-0-306-81472-3
- Lyons, Robert S. (2010). On Any Given Sunday, A Life of Bert Bell. Philadelphia: Temple University Press. ISBN 978-1-59213-731-2
- Ruck, Rob; with Paterson, Maggie Jones and Weber, Michael P. (2010) Rooney:a Sporting Life. Lincoln: University of Nebraska Press. ISBN 978-0-8032-2283-0
- Willis, Chris (2010). The Man Who Built the National Football League:Joe F. Carr. Lanham, Maryland: Scarecrow Press, Inc. ISBN 978-0-8108-7669-9