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What is Free Agency?

A Guide to Free Agency in Professional Sports

By Bisk
What is Free Agency?

Free agency is often a hot topic among sports enthusiasts. The free agency period takes effect a few weeks after each sport’s season has concluded. Any professional athlete who is not under contract is eligible for free agency. It allows athletes to test their market value, negotiate with other organizations and leave the franchise if another team makes them an offer. Athletes’ decisions can affect cities, fan bases, teammates, coaches and ownership, and their choices usually have the sports media world buzzing. Four-time NBA Most Valuable Player LeBron James knows this all too well.

As a high-profile professional athlete, James is no stranger to around-the-clock media publicity. In the summer of 2010, James announced he was entering free agency, leaving the Cleveland Cavaliers – his home-town team who drafted him out of high school – and joining the Miami Heat. The live television broadcast, nicknamed “The Decision,” drew harsh criticism from the media, the Cavaliers team owner, the NBA commissioner and the Cleveland fan base. In an instant, James’ image transformed from a beloved player to basketball’s public enemy number one.

However, animosity toward an athlete can quickly change. On July 11, 2014, James chose to return to his Cleveland roots as a free agent, and was overwhelmingly welcomed back with open arms. Aside from a small handful of disgruntled fans, James received a warm reception.

According to the Harris Poll, a market research firm, James was most recently named as the most popular male athlete in the United States. The poll was taken one month before James made his decision to become a free agent and return to Ohio.

Free agency allows athletes the opportunity to sell themselves to organizations that are financially able to pay more money for their talents. Sometimes this means that smaller market teams can miss out on top athletes. The best free agents tend to demand higher salaries, which limits teams with lower budgets from acquiring them.

When their contract expires, an athlete has the right to return to their current team with a restructured contract, or leave the organization to pursue other goals. Free agents choose to leave a team for a variety of reasons. Some leave because of money, or lack thereof. Some leave because they desire to play on a team somewhere closer to their family. Others depart because they lacked positive chemistry with players, coaches or ownership, and some choose to forgo a lucrative contract in favor of joining a team with a legitimate shot at winning a championship trophy.

In the case of LeBron James, he chose to return home. His on-the-court impact notwithstanding, James’ free agency decision is expected to help boost the city of Cleveland’s financial burdens considerably. According to calculations by the Cuyahoga County Fiscal Office in Cleveland, James’ return could be an economic catalyst for the struggling city. It’s been estimated that his presence alone could generate $500 million a year in added revenue.

Without the current system of free agency, professional sports leagues would likely suffer financially from decreased fan attendance and viewership. While free agency may elicit occasional negative publicity, it helps maintain a level of competitive balance, encourages trading between franchises, it can have a positive impact on a city’s economy and it can help attract new fans toward the sport.

Category: Business and Law of Sports