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The history of NFL Free Agency

NFL commissioner Paul Tagliabue, left, stands with retiring commissioner Pete Rozelle after Tagliabue was introduced at the NFL owners meeting in Cleveland, Oct. 26, 1989.
NFL commissioner Paul Tagliabue, left, stands with retiring commissioner Pete Rozelle after Tagliabue was introduced at the NFL owners meeting in Cleveland, Oct. 26, 1989.

With free agency expected to start on March 17 we take a look back at how it has evolved throughout the history of the NFL.

The Reserve Rule (1920-1946)

The reserve rule gave teams the right to re-sign its players in perpetuity. This rule bound a player to one team indefinitely. Each player contract contained this clause, allowing teams to continually re-sign their own players to one-year contracts with the same terms as the previous contract. This clause was included in each new deal, which is how teams kept their players until deciding they no longer wanted them.

The One Year Option Rule (1947-1962)

In 1947, the NFL replaced the reserve rule with the "one year option" rule, which allowed teams to use a reserve clause one time after the expiration of a player's contract. The option year could not contain the reserve clause, which gave players the ability to negotiate and enter a contract with any team. Players became free agents, free to sign anywhere, for the first time.

However, the first player to change teams under this rule was 49ers wide receiver R.C. Owens in 1962 when Owens played out his 1961 option year with the 49ers and signed with the Baltimore Colts.

San Francisco 49ers tight end R.C. Owens.
San Francisco 49ers tight end R.C. Owens.

The Rozelle Rule (1963-1976)

Due to complaints about Owens' departure from then 49ers' team owner, Vic Morabito, owners proposed (and the NFLPA later accepted) the inclusion of the "Rozelle Rule," named after then NFL Commissioner Pete Rozelle, in the CBA.

The rule allowed the Commissioner, at his discretion, the right to award compensation from a team signing a free agent to the team losing the free agent, unless the teams agreed on a compensation prior to signing. Compensation could be in the form of players, draft choices or cash considerations. Any decision the commissioner made was final and conclusive.

In 1976, the NFLPA challenged the Rozelle Rule in Mackey v. NFL. The court found that the rule violated Section 1 of the Sherman Act as an unreasonable restraint on trade. The court stated that the rule deterred clubs from negotiating with and signing free agents, decreased players' bargaining power in contract negotiations, denied players the right to sell services in an open market, and hindered the movement in interstate commerce of players.

However, the NFLPA sacrificed its free agency victory in Mackey v. NFL for other employment benefits in the 1977 NFL CBA. The Rozelle Rule was replaced by something very similar: the right of first refusal and a compensation structure for teams losing free agents.

The Right of First Refusal and Compensation (1977-1988)

The settlement of the Mackey case led to a revision of the Rozelle Rule, with new forms of free agency restrictions in the 1977 collective bargaining agreement.

A free agent's original team held the right of first refusal, enabling it to retain a player by matching any contract offer made by another team. The player's original team was also entitled to draft choice compensation from the team signing its player. However, there was an actual structure, based on a player's NFL experience and his new salary, which determined the number and caliber of draft picks to be awarded. This system allowed teams rights to its players that, contractually, no longer existed.

The 1982 collective bargaining agreement also still included the right of first refusal and draft pick compensation but adjusted draft compensation to align with multiple tiers of salaries.

Plan B Free Agency (1989-1992)

With an anti-trust suit still pending and multiple offers proposed from each side, the owners unilaterally imposed Plan B free agency with the absence of a labor agreement. This gave teams the right to protect 37 of its players (when the league had 47-man rosters) from becoming free agents. Players protected under Plan B were subject to the same compensation rules if signed by another team.

Unprotected players were not subject to right of first refusal or draft compensation rules. They were free to negotiate and sign with any team. This led to an influx of player movement in the NFL. However, players who were protected, essentially the team's best 37 players, were not given the same freedom and faced the same market restrictions as players before Plan B. Only one restricted player, linebacker Wilber Marshall, changed teams while the system was in effect.

Patriots defensive end Garin Veris (60).
Patriots defensive end Garin Veris (60).

The First Glimpse of NFL Free Agency (1992)

On September 24, 1992, U.S. District Court Judge David Doty awarded Eagles tight end Keith Jackson, Patriots defensive end Garin Veris, Browns wide receiver Webster Slaughter, and Lions running back D.J. Dozier a temporary restraining order, allowing them to become unrestricted free agents for five days, until an evidentiary hearing could be heard.

Jackson (Dolphins), Slaughter (Oilers) and Veris (49ers) each signed contracts with new teams within the grace period. Dozier remained unsigned.

Current National Football League Commissioner Roger Goodell.
Current National Football League Commissioner Roger Goodell.

NFL Free Agency (1993-Present)

In his closing arguments over Plan B free agency, the NFL's attorney, Frank Rothman, said that removing Plan B "would be the destruction of the National Football League that we know today."

That day came in 1993.

White v. NFL led to the "White Settlement," which was incorporated into the 1993 CBA and brought about a new form of free agency. Any veteran with at least five years of experience (eventually lowered to four after certain thresholds were met) would become an unrestricted free agent. However, it allowed teams to name its most valuable player as a "Franchise" player, and in the first and final two years of the CBA, it could name a "Transition" player (two players in the first year of the agreement), each of which restricted their movement on the market.

Players with three or four seasons of experience were subject to the same right of first refusal/compensation system as before, essentially what we know today as restricted free agency (3 seasons in 2020). Teams had exclusive negotiating rights to players with fewer than three years of experience—what we know as exclusive rights free agents (2 or fewer seasons in 2020).

The settlement also brought about the salary cap. In 1994, the salary cap was introduced to the NFL because player salaries in 1993 reached the agreed upon 67 percent of team revenues. Set at $34.6 million for its initial season, the cap intended to serve as an equalizer in response to free agency.

Courtesy of NFL Media Research

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