Free Agent Rules for Baseball

Free agency has not always been a part of professional sports. There were generations of athletes who remained the property of the team that either drafted or initially signed them. Baseball was forced to accept free agency in the mid-1970s, and the sports world was forever changed.

  1. History of Free Agency

    • For decades, baseball players were bound to one team for life because of the reserve clause. Teams could renew contracts for one year for as long as they wanted to keep the player. However, players Andy Messersmith and Dave McNally filed grievances against Major League Baseball because they were not happy with contract offers for the 1975 season. An arbitrator eventually ruled in the players' favor and declared them free agents. The first group of free agents entered the market after the 1976 season.

    Free Agency

    • A player with at least six years of major league service is eligible for free agency, and can sign to play for any team. All baseball free agents are unrestricted free agents, meaning there is nothing keeping the player to his former team. The richest free agent contract was the more than $250 million the New York Yankees gave Alex Rodriguez in 2007.

    Compensation

    • Teams that lose free agents often are compensated for their loss. Type A and B free agents (which are determined by the previous year's statistics) require that the signing team give up a draft pick in the following year's amateur draft. Type A free agents are the highest value and require compensation of a first-round draft pick, plus a supplementary round pick. The supplementary round takes place between the first and second rounds. Type B free agents draw a supplementary round pick. Supplementary round picks are ordered by the value of the player lost, meaning that the team that lost the best free agent picks first in the supplementary round.