The Business of Baseball Series: Free Agency


In this next post in the Business of Baseball series, I discuss free agency.  A free agent is a player who is not under contract to any team and is thus free to sign with a team of his choice.  Free agency in baseball has its aegis in the elimination of the reserve clause in baseball.  The reserve clause began its descent to elimination with the formation of the Major League Players Association in 1953.  Marvin Miller, a labor union activist, was brought on in 1966 to head the organization at the request of pitchers Sandy Koufax and Don Drysdale.  In 1970, St. Louis Cardinals center fielder Curt Flood sued Major League Baseball over the reserve clause when he was traded against his will to the Philadelphia Phillies.  Flood ultimately lost the case, but the die was cast. In that same year, the use of arbitration to resolve disputes was added to the collective bargaining agreement.  In 1974, free agency was born in an arbitration decision involving the Oakland Athletics and pitcher Catfish Hunter.  Hunter was declared a free agent in a dispute over the Athletics’ failure to make payment to an annuity under the provisions of Hunter’s contract. Another arbitration decision in 1975 involving players Andy Messersmith and Dave McNally, who had played for a year without a contract, hammered the final nail on the coffin of the reserve clause.  Messersmith and McNally were declared free agents, and from that point on free agency became a part of the collective bargaining agreement.

Aug 17, 2013; Pittsburgh, PA, USA; Major League baseballs on the field before the Pittsburgh Pirates host the Arizona Diamondbacks at PNC Park. Mandatory Credit: Charles LeClaire-USA TODAY Sports

Since 1976, the rule has been that players with 6 or more years of major league service time are eligible for free agency.  This type of free agency is the most common and well known avenue to free agency. When a player accrues 6 years of service time, and has no current contract with a team, he is eligible to declare or “file” for free agency.  Under the current CBA, a player who meets the criteria of 6 or more years of service time and no new contract, becomes eligible for free agency as of 9:00 am ET on the day following the last game of the World Series.  During the period starting at 9:00 am ET on the day following the World Series until 11:59 pm ET on the 5th day following the World Series, the player may not negotiate with or sign a contract with any other team but the team with whom he was previously contracted.  After this period expires, the player is then free to negotiate and sign with any team.  Most recent Cardinal examples of this type of free agency are Carlos Beltran, Jake Westbrook and Kyle Lohse.

While the above is the most common type of free agency, there are other ways to become a free agent.  A player will become a free agent when he is given his unconditional release from his current team before his contract expires.  This can occur regardless of service time or length of contract.  The most recent Cardinal example of this is Ty Wigginton, who was released by the Cardinals a few months into the first year of a two year contract.  Wigginton has since signed a minor league contract with the Miami Marlins for the 2014 season.

Another way to become a free agent is the situation where an arbitration eligible player is not tendered a contract before the end of the tender period, which is in the first week of December each season.  Such a player is referred to as a “non-tendered free agent”.  The most recent Cardinal example of this type of free agency is Ryan Theriot, who was not tendered a contract in December 2011.  Theriot later signed with the San Francisco Giants and was part of their 2012 World Series winning team.  Theriot did not play with any team in 2013 and most recently declared his retirement from major league baseball.

The next few avenues to free agency involve players whose teams attempted to assign their contracts to the minor leagues.  The first type involves an “optional assignment” to a minor league team.  Every minor league player who is added to a team’s 40 man roster has 3 “option years” (in some cases a player can have 4)  which allow that player to be sent back and forth between the minors and the majors during that year.  Until such player accrues 5 years of service time, that player does not have any say in when or how many times he is optioned.  However, if a team attempts to option a player with 5 or more years of service time, that player can refuse the assignment and elect free agency.  This situation happens very infrequently and there are no recent Cardinal examples of this type of free agency.

Another way a team attempts to send a player to the minors is what is called an “outright assignment”.  Unlike the option assignment, the outright assignment removes the player from the 40 man roster.  When this occurs, there are several ways this can result in the free agency of the player.  First, if the player has 3 or more years of service time, the player can refuse the outright assignment and elect free agency.  Former Cardinal catcher Rob Johnson is an example of this type of player.  Johnson, who had 4 years of service time, was outrighted by the Cardinals in November of 2013 and elected free agency.  Another way that free agency occurs in this situation is when the player being outrighted has been previously outrighted.  A player can only be outrighted once during his career without his consent.  Interestingly, Rob Johnson also fits this category, having been outrighted before by a prior team.  Thus, Johnson had more than one method of refusing the outright assignment and electing free agency.  A player can refuse a second outright assignment and elect free agency regardless of the amount of service time he has accrued.  Finally, any player, regardless of service time, who has 7 full or partial seasons of professional baseball (professional baseball includes the minor leagues) may elect free agency as long as they are not on a team’s 40 man roster.  When such a player is on a team’s 40 man roster and is then removed, the player may then elect free agency.  Recent Cardinal examples of this are Adron Chambers and Brock Peterson.

These are all the ways a major (or minor) league player can become a free agent.  The next post in this series will be about trades and other transactions.