What is a Free Agent?

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  • Written By: R. Anacan
  • Edited By: Bronwyn Harris
  • Last Modified Date: 02 November 2019
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A free agent is a term used to describe a professional athlete who is not under contract with a professional sports team and is free to sign with any team he desires. An athlete typically can become a free agent after fulfilling the term of the original contract that he signed with a sports team. The era of free agency greatly changed professional sports and enabled the large salaries that many athletes earn today.

Before the advent of free agency in the United States, professional athletes were essentially bound to the team that they originally signed a contract with. If a team did not want to renew a contract with a player, they could place them on a "reserve list" which prevented any other teams from signing the player. Professional athletes then had very little hope of playing for another team unless they were traded or released from their contract by the original team.

This all changed in 1975 when U.S. Major League Baseball players Andy Messersmith and Dave McNally challenged the traditional interpretation of player's contracts. An arbitrator ruled that the player's original teams no longer had any contractual right to them and they became free agents. This paved the way for more athletes to choose free agency in baseball, which eventually led to free agency in all of the major professional sports in the United States.


Professional athletes generally like the free agent model of business because it enables them to earn more than they probably would have without it. When a player becomes a free agent, any team can bid on his services, which usually drive the price for the player up. For example: in 2000 Alex Rodriguez, who played for Major League Baseball's Texas Rangers, signed a record setting 10 year, $252 million US Dollars (USD) contract with the New York Yankees. Free agency also allows a player the freedom to select the team that he wants to play for.

Critics of the free agent system believe that the often exorbitant salaries paid to free agent players have led to higher ticket prices and costs associated with attending a professional game. In 2007 the average cost for one ticket to a U.S. National Football League game was approximately $68.00 USD, which was up 7.1% from the previous year. Fans also have to adjust to their favorite players leaving for another team which can lead to disappointment, decreased team loyalty and the sense that players are not loyal to their fans and teams.

In addition, there is often a large disparity between what owners in larger cities and markets are able to pay for free agents, versus owners in smaller markets and cities. When certain owners are able to consistently outbid the rest of the market for free agents, it can lead to a competitive gap between teams. This is generally not considered good for professional sport leagues as a whole, as parity between teams is usually the goal. To address this situation, many professional leagues have guidelines and restrictions in place to manage the free agency process.


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