Reserve Clause - NFL

NFL

On June 18, 1921, the NFL ratified its first constitution. The reserve clause ratified in the constitution was similar to that of baseball's at the time. The reserve clause stipulated that a team had the first opportunity to sign a player after the length of the contract had expired. If the team chose not to offer a contract, then the player could try to sign with a team of his choosing. Theoretically, the reserve clause bound the player "...to his employer in perpetuity". The reserve clause had been abolished in the NFL constitution in 1948 when the option clause was created. The option clause stated that a team may choose to automatically keep a player on their team for another year, at the same pay, after his contract had expired. The term, option clause, was not used by the print media and it was instead referred to as the reserve clause. Nevertheless in the NFL's attempt to gain antitrust exemption from Congress in 1957, Bert Bell still referred to the clause as the option clause (and also as the "option and reserve clause").

Decades later, NFL players' mobility was limited by the so-called "Rozelle Rule", named for the commissioner who first implemented it, which allowed the commissioner to "compensate" any team who lost a free agent to another team by taking something of equivalent value, usually draft picks, from the team that had signed the free agent and giving it to the team the player had left. Fear of losing several future high draft picks greatly limited free agency as no team wanted to sign a veteran player only to learn that it would lose, for example, its next two first-round draft picks. The Rozelle Rule was eventually replaced by "Plan B", which allowed a team to name a thirty-seven man roster the reserve clause would apply to, and all players not included on this list were free agents. Obviously, few top-echelon players were left off this thirty-seven man roster unless they happened to be injured. Courts eventually ruled this plan to be an antitrust violation, and something resembling true free agency came to pro football. Now, exclusive rights to a player are only for the first three years after his selection in the college draft. At the end of the first three years, a player can be a "restricted free agent", allowing his former team to match any offer made to him by another. After four years in the NFL all contracts end with the player becoming an unrestricted free agent without reserve.

There is a Franchise tag option that is similar to the reserve clause; however, teams can only tag one player each year, although they can tag the same player for consecutive years. Franchised players are eligible to receive at least 120% of their previous year's salary, and players tagged "non-exclusive" can accept offers from other teams; if the original team does not match the offer, they receive draft picks as compensation. In recent years, many teams have opted not to exercise their right to designate the Franchise tag.