Free agency in the NFL has a complicated history. One of the main waypoints on the road to modern free agency was the Rozelle Rule.
This article explains the Rozelle Rule, why it existed, and how it stopped free agency for a decade.
What was the Rozelle Rule?
Before we look at how this rule came about, we’ll explain exactly what it was. It covered what happened when a player signed with a team as a free agent.
The Rozelle Rule stated that if a team signed a free agent, they must compensate the free agent’s prior team.
If the teams couldn’t agree on compensation, Commissioner Rozelle could unilaterally name any compensation he saw fit.
That may seem innocuous, but it was an incredibly damaging rule for players. Before we get to the impact, let’s take a look at the man who it was named for.
Who Was Pete Rozelle?
Alvin Ray “Pete” Rozelle is arguably the most important commissioner in the history of the NFL. He may be the most important across all of American professional sports.
Rozelle was voted NFL commissioner in 1959 at the age of only 33. He served as Commissioner for forty years.
When he took the job, the NFL was only marginally popular. It was a lot less popular than college football. Under Rozelle’s tenure, the NFL became the juggernaut that it is today.
Here is a potted history of his major achievements:
- starting the massive television contracts that are the lifeblood of the modern NFL.
- Monday Night Football, regularly the top-rated American television show
- growing the NFL from 12 to 28 teams
- growing the schedule from 12 games to 16 games
- creating the revenue-sharing business model that the league still uses
- overseeing the AFL-NFL merger which created the modern NFL
- starting the Super Bowl
Revenue-sharing model
Monday Night Football and the Superbowl may be the most obvious parts of his legacy.
But behind the razzle-dazzle, we’ll point to the revenue-sharing model as being the most important part of growing the league.
Rozelle was focused on ensuring that small market teams could compete on an even footing with the teams from the huge cities. This was the main impetus behind the revenue-sharing structure that he instituted.
What Led To The Rozelle Rule?
We’ve described many remarkable achievements that were no doubt beneficial to both the club owners and to the football players.
However, the Rozelle Rule is the most regrettable thing that happened under his watch. To understand what it was, we should look at how it came about.
Let’s take a quick dive into the history of how players were treated in the league.
Reserve Clause
When the NFL ratified the league constitution in 1921, the constitution contained a “reserve clause.”
At the time, reserve clauses were a common feature of virtually all American professional sports.
A reserve clause means that whatever team initially signs a contract with a player owns the rights to that player forever, even after the contract expires.
The only way a player could switch teams was if he was released or traded. If he was traded, the new team now owned him.
That seems unthinkable now. However, the NFL seemingly had a version of this clause that was more favorable to players.
Rolling extension
The NFL version stated that once a player’s contract expired, the team had one year to resign him. If they didn’t, he was free to sign anywhere. That seems much more reasonable.
However, there was a massive catch.
If the club and player couldn’t agree on a contract, the team could force a one-year extension with a 10% pay reduction.
Teams might do this year after year. If a player didn’t negotiate a favorable contract, he could be stuck with the same team; playing for less money each year!
The Option Clause
The reserve clause was modified in 1947 by the creation of the “option clause”.
This stated that the team could automatically keep a player for only one year after his contract expired.
That seems fairer, but players didn’t seem to be able to benefit from it. Shockingly, it took 16 years before the first player played out his one-year option, and then tried to negotiate as a free agent!
That player was R.C. Owens. After playing out his option year with the San Francisco 49ers, he signed as a free agent with the Baltimore Colts.
How The Rozelle Rule Began
The NFL owners were alarmed by how Owens had signed as a free agent. They got together to come up with a way to safeguard their interests.
The NFL owners instituted the Rozelle rule in 1963.
Why the club owners wanted this rule
The owners wanted this rule for obvious reasons: they didn’t want to lose a good player with nothing to show for him.
They also didn’t want to lose the upper hand in negotiations that they were used to having.
It’s also hard to look at the Rozelle rule and think that it had any purpose other than to appear to allow more labor freedom while putting as much of a damper on free agency as possible.
NFL running scared
This was the era where the NFL was still reeling from the Supreme Court decision that refused to give the same antitrust exemption to the NFL that is enjoyed by Baseball.
If you want to know more, we have a clear overview of the Radovich vs NFL case.
And if you’re curious about how Major League Baseball managed to get favorable status, check out our article on baseball’s antitrust exemption.
The NFL had counted on getting the same exemption and was stunned by the Court’s ruling.
They hastily settled with Radovich, but other players were watching from the sidelines.
At this same time, unionization was gaining steam among the athletes.
During this period, Rozelle continued attempts to gain an antitrust exemption directly from Congress that had been begun by his predecessor. But aside from a limited exemption related to broadcasts, he didn’t succeed.
The NFL wanted to maintain the status quo, but they needed to avoid any other precedent-setting lawsuits at all cost.
Why Rozelle was in favor of the rule
For Rozelle, there was an additional reason to be in favor of the rule. We mentioned his strong belief in all teams having an equal footing.
Rozelle felt that unrestrained free agency would create a league of “haves” and “have-nots”. This would mean that top players would flock to where they could win and get paid.
That’s an admirable reason. Nevertheless, the implementation of the rule was deeply flawed in terms of how we treat people working for us!
How Rozelle Applied The Rozelle Rule
Rozelle’s decisions under the rule certainly bear out the interpretation that this rule’s main purpose was to appear to expand free agency while stifling it.
Let’s take one example.
The New Orleans Saints signed receiver Dave Parks as a free agent from the San Francisco 49ers. Parks had only caught 26 passes the previous season, so he was hardly a massive game-winner.
When the 49ers and the Saints didn’t come to an agreement, it fell to Commissioner Rozelle to decide on the compensation.
What was Rozelle’s reasoned decision?
He took away two first-round draft picks from the Saints and gave them to the 49ers.
This was the compensation for the 49ers for losing a journeyman player that they didn’t even have under contract!
This isn’t compensation, it’s punishment. There’s no other reasonable way to look at it.
What Was The Effect Of The Rozelle Rule?
The Rozelle Rule had its intended effect. It pretty much killed off free agency for ten years.
No team wanted to sign free agents because there was no way to know what kind of draconian “compensation” would be leveled against them by the Commissioner.
Eventually, players started to mount legal challenges against this system. One of the first significant lawsuits was by famed tightend John Mackey in 1974.
You can read all about it in our article on the case of Mackey vs NFL.