Free Agency: Pro Sports' Big Challenge

February 9, 1990

Report Outline
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Introduction

Professional sports leagues are thriving in the United States. Fan attendance is at an all-time high and TV revenues are skyrocketing. But the issue of free agency continues to plague player-management relations. The owners insist there must be restrictions on players' movement to assure competitive balance (and, not incidentally, to keep salaries down). The players, while not totally rejecting management's argument, believe they should have more latitude to negotiate with other teams (to keep salaries up). In the end, players and owners may find they need to work together to maximize salaries and profits.

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Overview

In just the last few weeks, eight professional baseball players signed $3-million-a-year contracts, virtually assuring that the average major-league salary in 1990 would exceed $500,000 for the first time. But shed no tears for the baseball team owners who have to pay those hefty salaries. A sizable increase in national television revenue will enable them to absorb the costs with no great difficulty.

Meanwhile, the National Football League (NFL) is hoping to negotiate a lucrative TV deal of its own. The league's old contracts with ABC, CBS, NBC and ESPN, which paid each team $17 million a season, expired after the Jan. 28 Super Bowl. Now the owners reportedly are shooting for a contract that will give each club $28 million annually over three years. To justify such a large increase, the networks and the NFL are weighing a proposal to spread the regular-season 16-game schedule over 18 weeks, with each team receiving two byes during the period.

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