Player trades, free agents and transfer policies in professional sport

For a typical employee the relationship with the employer, including how and when that relationship can be terminated, is regulated by the contract of employment. Employment contracts also have an important role to play for professional sportsmen and women, but in some team sports, internal sporting rules operate to act as a player restraint and provide significant control on the part of the employer over the employee player. Essentially, these restraints act by not allowing a player to sign a contract with or be allocated to a new club without the existing club’s agreement. This control by a player’s club (and employer) promotes contract stability between teams and players. This stability is justified on the sporting grounds of ensuring competitive balance between teams (in that no one club can acquire all the top players) and the unpredictability of outcome in the result of a match. However, the contract stability that player restraints boost is inevitably at the expense of player mobility, and this results in an inherent tension that sports bodies and sports regulators have had to grapple with.