Because of a clause, a cause

May 01, 1972
May 01, 1972

Table of Contents
May 1, 1972

NBA Playoffs
Horse Racing
Decent Bloke
19th Hole: The Readers Take Over

Because of a clause, a cause

By Gwilym S. Brown

The National Football League season will get underway four months early this year. Only the game they will be playing, which pits those high-flying owners against the rough, tough players, is called Option Clause.

This is an article from the May 1, 1972 issue Original Layout

The kickoff will be at midnight on April 30 when about 50 players—including Quarterback Bill Kilmer, Running Backs MacArthur Lane and Donny Anderson and Wide Receiver Marlin Briscoe—will become free agents and thus officially available on the open market. This will be confusing to some, for it is generally assumed that the NFL survives only because an open market on players does not exist, an assumption that has been sanctified by act of Congress. It should prove alarming to others because, while this is an annual phenomenon, the usual number of players available is eight or 10. The reasons why there are more this year are 1) the Nixon wage freeze and 2) growing owner resistance to increased player demands, matched by growing player dissatisfaction, not just with the money they are not getting but with working conditions.

Then, early in May the NFL Players Association plans to file suit in federal district court against NFL Commissioner Pete Rozelle and the 26 NFL clubs. The suit will charge that the freedom given annually to free agents is an illusion and that even in a partially exempt industry this constitutes an illegal restraint of trade and a violation of the Sherman Anti-Trust Act.

"There is a great deal of misunderstanding among the general public about the option clause," says Ed Garvey, the NFLPA's executive director. "What most people don't know when they read about someone playing out his option is that it is not his option he is playing out at all, it is the owner's option."

The Option Clause, as written into the Standard Player Contract, works like this: prior to May of the year in which his current contract expires, each player receives from his front office a letter stating that the club intends, as described in the contract, to exercise its option to an additional year of the player's services, without a contract and at no less than 90% of his current salary. In the vast majority of cases, the letter is mailed for routine protection, the owner hoping to get the player's signature on a new contract.

If the player refuses to sign, he becomes a free agent the following May. But any club that signs this free agent must provide satisfactory compensation to the previous owner or come under the jurisdiction of what the players call the Rozelle Rule, what the owners call the Compensation Rule and what the NFLPA suit will be all about. Article 12.1 (H) of the Constitution and By-Laws for The NFL states that in such a situation "...the Commissioner may name and then award to the former club one or more players...of the acquiring club as the Commissioner in his sole discretion deems fair and equitable; any such decision by the Commissioner shall be final and conclusive."

Players and owners agree that the combination of the Option Clause and the Compensation Rule forms a powerful restraint on freedom of movement. From 1966 through 1970, 42 players became free agents, but Rozelle had to act in but two cases, so dire were the consequences of his second ruling: in 1968 the Saints were outraged at having to give up their No. 1 draft choices for that year (Defensive Tackle Kevin Hardy) and for 1969 (who turned out to be Tight End Ted Kwalick) to sign ex-49er Tight End Dave Parks. Of the remaining 40 free agents, only 11 were able to sign on with another club, 24 re-signed with their old clubs, four did not sign and one went to Canada. The bone of contention between management and labor is whether or not this restraint on freedom of movement is essential and legal, essential and therefore legal—or even fair.

The first move in the game of Option Clause is to attempt to establish if the clause is needed to maintain the competitive balance on which the financial health of the NFL depends, if, in fact, the league needs to enjoy a monopoly of the labor market as well as of the product market. Says Edward Bennett Williams, president of the Washington Redskins, "If you didn't have the option clause you wouldn't have a league. The Lamar Hunts, Clint Murchisons and Bill Fords could hire away all the competition with their huge bankrolls."

This oft-repeated argument exasperates Garvey. "It presumes irrational behavior on the part of the owners," he says. "They are profit maximizers, after all. They are not going to risk making a profit in order to corner the superteam that has no one to play. That argument assumes everyone is a sportsman owner except a few greedy guys."

The Crushing Dynasty Theory is also refuted by a Williams hireling, George Burman, a Redskin center who is working for his Ph.D. in Labor Economics. "An important limitation is that no one would be willing to build a dynasty, and keep it, in a dying industry," he says. "An NFL franchise now goes for $20 million. What owner would want to see the value of his franchise drop to $3 million or to zero?"

The second most popular reason for believing that freedom to roam would create competitive imbalance (and financial disaster) is offered by Tex Schramm, president-general manager of the Dallas Cowboys. "Certain cities like New York, Los Angeles and Chicago, in that order, would always be favored because they can offer tremendous fringe benefits to a player," he says. "Weather and glamour would be important factors in attracting top players to Miami, New Orleans and San Francisco."

A final point is introduced by a lawyer who wishes to remain unidentified. He states that TV revenues would plunge from their current heady total of $45 million a year if freedom of movement became a reality. "The selling of TV rights is very closely connected to maintaining balance," he says. "The networks do not know what games they are buying when they purchase packages from the NFL, but they buy them just the same. It's because of the old cliché that any team can win on any given day. If you are going to have a viable league you must have a way to keep players on a team. If you gave players freedom to roam you would begin to nick off teams one at a time. In 10 years you'd have only eight teams left. We'd go back to barnstorming. Popular interest would go downhill. On TV we'd be stuck with a game of the week like college football because there would not be enough good competition around to merit any more than that."

Despite these arguments many players desire some kind of change in the option clause. In a recent poll of its 1,200 members the NFLPA found that 31% of the 840 responding wanted total elimination of the option clause, 62% wanted it modified and 7% wanted no change at all. The players say that there would not be as much shifting of personnel as the owners predict and that what there was would increase competition.

"The biggest movement you'd see would be by players who are now sitting on the bench," says John Mackey, Baltimore tight end and NFLPA president. "A lot of them haven't been treated too well by management. A conservative guess is that there are 25 or 30 backup guys who could be starters on other clubs."

A free labor market is probably the best way for a weak club to become competitive, claims George Burman. "In the long run, straight trading is not going to equalize competition, and as an equalizer the reverse order college draft is pretty much of a hoax," he says. "The worst team really only gets an advantage of one first-round pick over the best team. After that it is actually drafting behind the best. Dallas picks 26th, Buffalo 27th, Dallas picks 52nd, Buffalo 53rd, and so on."

Burman cites several other reasons why a free labor market in the NFL would not generate a wild, destructive bidding war. Pro athletes are pretty much like ordinary people in that they do not want to continually shift their homes and families from city to city. Humane treatment by coaches and management is also an important factor in determining where someone wants to play. "Right now coaches like George Allen, Don Shula, Tommy Prothro, Dick Nolan, a few others, would have a tremendous advantage in a competitive market," says Burman. "They treat their players like grown men."

What about salaries? The consensus of owners and players is that salaries would rise 15 or 20% and that most of that increase would go to superstars and players in key positions.

The legal ramifications of the option clause are due for an airing in court. The Supreme Court is expected to announce its decision on Curt Flood's suit against baseball's reserve clause before the current term ends in June. Meanwhile, Joe Kapp has filed an antitrust suit against the NFL; and the NFLPA suit will ask for permanent suspension of the Rozelle-Compensation Rule. The owners are comforted, however, by a report that appeared in The Yale Law Journal of November 1971, stating that once professional athletes have formed a collective bargaining unit recognized by the NLRB, which has happened in baseball, basketball, hockey and football, arguments over reserve and option clauses must be settled at the negotiating table, not in the courts. The article predicts that the Supreme Court will therefore throw out Flood's suit.

"We just don't happen to think that the argument is valid," says Garvey. "Just because something is a condition of employment doesn't mean it can violate the established laws of this country. If it was a condition of employment that any rookie who dropped a punt would be shot, would that mean that the team that shot him couldn't be prosecuted under the criminal laws? We hope the courts agree with us."

Which brings us to the heart of the matter: whether or not the players are getting a fair share of the revenue they generate. "It's always the players who have to defend their greed," complains Burman, "not the owners, who won't even open their books."

The average NFL salary is $25,000 a year, a figure that has remained static since 1968. Subtracting quarterbacks the figure is around $20,000. Statistics on what the owners clear are hard to come by. The NFLPA claims that the clubs spent $102 million on operations in 1970 and took in $145 million, for a pretax profit of $1.65 million per club. The Government Pay Board has set this figure at $900,000. If these figures are too high, as spokesmen for the owners claim, perhaps NFL teams should open their books, as even Pete Rozelle once suggested. Otherwise the threat of federal regulation might become a reality. And this would turn out to be a far more serious game than Option Clause.