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Is Unrestricted Free Agency a Model that Soccer Should Consider?

soccer pic Is Unrestricted Free Agency a Model that Soccer Should Consider?

Editor’s note: This is part two of a series of articles written by Stephen Lucey. Part one, released earlier this week, focused on whether a salary cap could save the Premier League from itself. Part two, here, discusses unrestricted free agency and compares the NFL model to the Premier League.

Portsmouth FC are near-mortally crippled by their wage bill, and are left to wander the Arabian deserts with their shower caps extended for oil soaked charity. The Premiership has been seduced by potential riches, and borrowed itself into a black hole filled with bank notes to pay down and creditors to to foil. UEFA’s report released yesterday attributes a 56% controlling majority share of European football’s debt to the Premier League. Obviously, competing in Europe is paramount for English football, but creating a sustainable economic model has to become as important a priority going forward.

Here I’ll acknowledge a concern from some of the previous commenters: Yes, the EPL and NFL are different entities with different structures, competitive factors and concerns, but they are also similar. The Premier League seceded from the Football League in 1992, establishing a corporation with each club holding a vote and equal stake in the partnership, and the NFL functions in much the same fashion. While opinions on revenue sharing in the NFL would vary owner to their contribution, it has been widely acknowledged as their best solution for a financially healthy league.

When the NFL introduced the hard salary cap in 1994, it did so on the back of unrestricted free agency, a policy adopted just a year prior in 1993. After a player had reached four years’ accrued service, he was free to sign with any team at the expiration of his contract. The speculation and anticipation of potential player moves bedded in nicely with the cable sports 24 hours a day news cycle, keeping loud, sometimes punch-drunk ex-players in paychecks, and ensuring interest in the league would only gather steam over the offseason.

An economic success for NFL franchises is the ability of a team to terminate a player’s contract at anytime, based on performance, age, health, or any other reason a millionaire might have to save some scratch. An NFL team can also claim one player with a “franchise” tag, compensating that player with one year’s salary averaged from the Top 5 paid at their position.

The transfer window system unnecessarily forces teams into long-term planning while the nature of sport is in immediacy and reaction. Restricting player movement only ends up restricting the potential quality of play, which is what we, as fans of great competition, should all care about. It is hard to say whose interests are greatly favored by this policy, which makes its skin tight oppression all the more confusing to a neophyte.

The hard cap created a new commodity in the NFL: cap space. Where transfers in the Premier League generally involve cash and credit transactions, NFL franchises value taking a player’s salary off the books when factoring out how older players’ contracts are dealt with. A lot of young NFL players will receive their biggest payday before they’ve entered the prime of their playing career. World football’s balance sheets are plagued with that one last payday for an aging, but perhaps outward star with a haul of credentials.

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15 Responses to Is Unrestricted Free Agency a Model that Soccer Should Consider?

  1. Jon says:

    Stephen,

    Once again I am enjoying this series greatly. This second installment is slightly confusing for me though. First, I don’t really grasp the argument you’ve made. In the “parity” section, I understood you to be saying “an NFL style hard salary cap would be good for the EPL because it would increase parity”. I don’t see a clear position in this part of the series. Are you arguing that the EPL should have unrestricted free agency? If so, is that because it would help stabilize the financial situation of most clubs? Is a salary cap a prerequisite to this argument or is it stand-alone?

    On the topic of free agency, the EPL already essentially has this and more with the Bosman ruling. Six months *before* a player’s contract expires, the player is free to talk to any club in the world, and, in fact, sign a pre-contract. That is even more freedom of movement than afforded a player in the NFL, who must wait until his contract actually expires to even talk to another team.

    Furthermore, unlike the NFL, players have been “monetized” in world football in a way that they have not in the NFL, such that they can move to any club at any time, regardless of their contract status. As a result, players move all the time in the alloted windows so long as they can reach terms with the purchasing club and a transfer fee is arranged. That is more free movement than the NFL would ever allow because you cannot “sell” a player in this way under the NFL rules.

    The only restriction is the transfer system, which is imposed to protect the integrity and fairness of competition, rather than limit it. For example, it prevents the two finalists in the Champions League from working hard to get there and then having reached the pinnacle, raid the other team of its best players on the eve of the big game.

    The world football system is already more free from a player movement system than unrestricted free agency is the NFL.

    If your argument is that free agency allows teams suffering from financial difficulty to cut their wage bill, then your argument isn’t actually for unrestricted free agency at all, it for non-guaranteed contracts. The NFL is unique in that it allows the employer to unilaterally end the employer-employee relationship. No other major league has this system in place. I freely admit that this would allow a team like Portsmouth to instantly reduce its wage bill by cutting the players loose. But, with a transfer window in place, those players, once cut, would be in limbo – unable to re-sign. the only way around that would be to get rid of the window system, but that would leave open the system to be abused by the richer and more successful teams.

    I’m also not sure that non-guranteed contracts are even permitted in the United Kingdom and the rest of Europe. There is an argument that should allow the parties to freely contract any terms they like, but that’s been generally limited by unconscionability and other doctrines. Again, I’m not sure whether this would pose an insurmountable barrier to non-guaranteed contracts or not, but it might.

    Can you clarify your argument in this section for me?

    Cheers,

    Jon

    • StephenLucey says:

      Thanks for all your words John. I think the lack of argument here is just a result of having to make some uneven comparisons. There is no one-to-one correlation between transfer fees and the big money bonuses featured in most NFL contracts, especially of the elite players. Both systems are subject to different complexities. My goal is to define what has allowed the NFL to grow into a cash printing juggernaut, and see what lessons English football could possibly glean.

  2. CTBlues says:

    That is a good start, but where is the rest of the article? I got to the end of the last paragraph and was like where is the next sentence?

    The league needs to make a rookie signing salary cap because these unproven kids are getting huge undeserving contracts. As for the free agency I think most people will say no way we don’t that. Fans in England are more attached to players that have been brought up through the youth ranks and when they leave even now those players are hated by there former clubs. Listen how the crowd at Upton Park reacts to Joe Cole and Frank Lampard when West Ham are playing Chelsea. Also the Europeans don’t really understand the concept of trades they only understand the $$$ they get in return.

  3. man99utd says:

    “My goal is to define what has allowed the NFL to grow into a cash printing juggernaut, and see what lessons English football could possibly glean.”

    They are a cash printing juggernaut because they have no competition anywhere in the world. Several North American sports are played elsewhere in the world but they do not offer the kind of money as the NFL, MLB, NBA or NHL. Football has to compete with the rest of the world for talent.

    • StephenLucey says:

      While American football doesn’t face any real pressure externally, they are still in competition with the other major domestic leagues as well as international sports in terms of eyeballs and money. And while domestically the NFL reigns supreme, it still falls below the Champions League in global viewership.

      The Premier League has a massive worldwide audience, and Manchester United has set the standard in brand marketing. They also carry close to a billion dollars in debt. I am aware that player finances are just one tile in a flawed mosaic.

      • man99utd says:

        Not so much. There are no other domestic American footall leagues. As to other American sport leagues, they set up the seasons so that there is as little conflict as possible. The networks also do this with television. What international sports rivals American football? Nothing. I agree the the CL has a bigger global audience, but that has little to do with American tv. As to Man Utd’s debt that is thanks to American football owners who have raped our club to the tune of £200MM and placed us in a £700MM hole. Maybe it helps Tampa Bay but not United.

  4. phil says:

    I’m not sure I get this either. North American teams can sign a player at any time, but not if he’s still under contract to another team. PLayers can be traded between teams, but there are windows for that as well. For example the NBA trading deadline just passed last week.

    NFL teams can release a player at any time because NFL players have a terrible union. Arguably the most successful union on the planet is Major League Baseball’s union. They are also more highly paid than NFL players, and have no cap. Average yearly salary: 3.26 million dollars. Do the math.

    The reason there is so much money around? Well, 30 teams in a domestic market of over 300 million vs. 20 teams(at the top level) in a market of 60 million. As for the lesser teams that could provide competition: there is no minor football league, the minor basketball leagues don’t compete with the NBA FA Cup style and some of those leagues are actually owned by the NBA, and the minor baseball teams are actually farm systems for the MLB teams, so they aren’t even independent entities.

    Also, playoffs. In North America, much cash is made simply by making the playoffs and these games get the highest viewership. The champion of American football is not the team with the best record, but the team that wins the Super Bowl. I think the increased parity that you see in the North American leagues is an illusion of randomness inserted by the unpredictably of knockout tournaments. C.F. FA Cup, Portsmouth 2008.

  5. brn442 says:

    “The transfer window system unnecessarily forces teams into long-term planning while the nature of sport is in immediacy and reaction.”

    I’m sorry but I’m trying to grasp what your actual point is – what are you saying exactly? Maybe you should have googled “Bosman” before you wrote the article perhaps? If Portsmouth cannot pay its players their wages, there is a 14 day clause built in to terminate their contract.

    Plus, you keep using the NFL model as a though it has been a “model” success, apart from it being one league that plays a rather unique sport, it’s a meat market, plus it gets virtually all its players developed for free by the NCAA, it spends almost nothing for player development.

  6. blarghor says:

    North American leagues have the equivalent of transfer windows also. The nfl has trade deadlines and signing deadlines.

  7. The Premier League cannot make changes to its system independent of similar moves by the top leagues in France, Spain, Germany and Italy. If wages fell in England, players would flee to the Continent. In the NFL, it’s either take what $ they offer or, uhhh, go play in Canada.

  8. sucka99 says:

    But Free Agency has been established in soccer with the Bosman ruling. When a player is out of contract they can go to whatever team they want to go to

    as far as trasfer periods, the NFL has one too – it’s called March to October – the offseason and part of the beginning of the season. the prime difference is that the NFL season is half as long as the soccer season thus having an extra transfer period. But it’s essentially the same. And players out of contract can sign whenever with whoever. I assume you’re looking at transfers and trades as similar.

    wrt the concept of Cap Space – two different systems, dude. cap space is a complex formula based on salary and guaranteed likely bonuses amortized (or accelerated) for a particular time period. There’s no concept of a transfer fee in the NFL. Again it won’t work unless and until you had a trust-type league controlling the top teams and the top leagues.

    Yes the Premier League did “secede” from the FA, but they still send 3 teams down a year and bring 3 teams up. The only similarities between the Premier League and the NFL is that they share TV money (and even then it’s stilted). Other than that there’s a virtual socialist state in the NFL while the Premier League teams can load up on debt and fail, can spend as much as they want, or as little as they want. But at the end of the day, and are more heavily dependent on gate receipts. There’s no team in the NFL that has that problem. Every team in the NFL is making money (despite the labor contention) and they’ve not even tapped potential overseas dollars like the Prem has.

    The only way things change is with a socialist-antitrust-style European league and we know that will never fly.

  9. barry says:

    I never understood the significance of the Bosman ruling. So a player is out of contract, meaning he has NO legal (contractual) links to his club. He is totally free from their control, as they are from paying him. So why did it take some guy called Bosman to actually legally enforce the obvious? How could a club have kept a player from talking to other clubs, when he was in his 5th season at a club despite only signing a 4 year contract, for example?

    • Jon says:

      Hi Barry,

      I’m not an EU lawyer (I’m a Canadian one), so don’t take this as being absolutely correct, but I believe Bosman worked this way:

      The absolutely central point you must understand is that all players, whether in contract or not, were subject to a “transfer fee” which was designed to compensate the player’s club for “training and development”. That was true *regardless* of the players’ contractual status. So, for example, if a player’s contract expired at after 3 years of service, he could not move to another club until a transfer fee was agreed with his old club because they had a legal right to be compensated for the time they put into training and developing the player. Absent a transfer fee, the player could not be registered by anoter national association or club under UEFA rules.

      As a result, there was never such a thing as a “free” transfer, because a player was always subject to a transfer fee of some sort.

      Additionally, if a player was out of contract at the end of the season, the club was obliged to offer him another contract, but could alter the terms (i.e. wages). If he refused to sign, he was de-listed as an amateur and could not play professionally for anyone. A player could “hold out” for two years, at which time they could then be re-registered and signed without a transfer fee, but that’s a long time in a short career to give up. It effectively forced players to either find a team willing to buy them, or re-sign on unfavourable terms with their old club, even if they were no longer under any contractual agreement with the club.

      Bosman challenged these requirements, arguing that it restricted freedom of movement of players, in violation of the EU treaty, because it made it so that players were not free to move clubs (because their old club could demand a transfer fee) even if they were out of contract, forcing them to choose between unemployment by holding out or resigning with their old club.

      The European Court agreed that this was a violation of the Free Movement clause of the treaty, as well as the previous requirement that teams were restricted in the number of foreign (read – outside of home league’s state) players on the team. Instead, it implemented the system you described as “obvious”, which is that there are true “free” transfers – if a player is out of contract a club is no longer entitled to demand a fee for “training and development”. If they don’t sell the player while he is under contract, then they get no transfer fee at all.

      That is the effect of Bosman. Here is a link to the text of the Court’s judgment for yourself:

      http://eur-lex.europa.eu/smartapi/cgi/sga_doc?smartapi!celexplus!prod!CELEXnumdoc&lg=en&numdoc=61993J0415

      Cheers,

      Jon

  10. Ian M says:

    Yes, England has 56% of Europes debt but it also has 49% of its Asset Wealth.

    The real issue – as is ALWAYS the case – is can it service its debt?

    And the answer is usually – Portsmouth excepted – Yes.

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