The Reserve Clause


The Reserve Clause

In a nutshell, starting in the 1880’s the “reserve clause” gave teams the right to renew a player’s contract for one year following the expiration of the contract. The reserve clause was challenged at various times over the years (as early as the 1890’s) but in every instance the courts ruled that “one year” meant one year, and then the next year, and then the next, etc. for as long as the team wanted to extend the contract. Under this interpretation a player could never become a free agent until a team released him from his contract. The player’s only two choices were playing for the team that held his contract, or retiring. Players would often hold out (refuse to report) to get a better deal, and sometimes that would work, but essentially the owners had all the real power in the relationship and salaries, as a result, were kept low.

In 1975 the case was brought before an arbitrator and the arbitrator ruled that “one year” meant “one year”, rather than “every year until the end of time”. This ruling did not actually strike down the reserve clause; rather it just interpreted it in a way that was different from how it had been interpreted by previous rulings. The result was that teams could still reserve a player’s services for one year after the final year of a contract—but only for one year. After that one year, the player became a free agent.

In our league you do not need to negotiate with players you already have under contract—they will automatically get new contracts the following year (unless they retire or you release them). In real life, teams did negotiate with players during the reserve clause era, but in OOTP they do not. Instead, OOTP simulates the negotiation process and awards players with what the game considers to be appropriate contracts. The best players in our league right now are making around $50,000 to $60,000 a year; the minimum contract is about $5,000. So that’s the range right now—5K to 50K. These figures will increase over time.

Multi-year contracts are not allowed in our league. They were not common in real life during the reserve clause era, and I think that the game is more likely to come up with reasonable figures if it has to assess each player every year. There are a few players who have multi-year deals because some GMs did some negotiating before the rules were set in stone. When these deal expire those players will not be allowed to sign multi-year contracts again.

When I simmed the 70-year pre-history of the league, I used OOTP’s default reserve clause era settings. This resulted in all teams having far more money than they need for player salaries. I didn’t expect that to happen, but live and learn.

Our choices at this point are to:

  1. tinker with the settings so that money is tighter and the finances actually mean something, or
  2. leave things the way they are so that owners don’t really have to sweat finances until the free agency era arrives.

I’m somewhat ambivalent about that decision, so I’ll leave it up to the league the initiate that discussion.

As mentioned elsewhere, I am in favor of beginning our free agency era earlier than 1975, but not too much earlier. Mid-to-late ’60’s would be my preference. But that can be discussed as well.

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