Draft System Controls Players

Professional sports have become big business and there are many legal issues we could discuss. In today's article, we will deal with the legal issues involved in a unique aspect of professional sports: The draft system that forces a player to play for a particular team.

In professional sports, players are typically drafted out of college or the minor leagues. Being drafted means that the rights to the players service belong to one team only.

Normally, in the absence of being eligible for some form of free agency, the player can only play for a different team if he is traded. Can you imagine lawyers or engineers being told that they must work for a particular company in a particular city?

Doctors have been, rightfully, in my view, outraged when provincial governments have attempted to regulate where they practice.

In the ordinary business world, such restrictions risk being found illegal by virtue of being in restraint of trade or by contravening the federal competition Act or antitrust statues in the Unites States.

In Canada, the Competition Act has a specific section dealing with any restrictions on the team for which a professional athlete chooses to play. Essentially, the section says that the court should apply a standard of reasonableness when deciding if a restriction is legal.

The court is explicitly instructed to consider the benefit of maintaining a balance between teams in the same league. If any player could sign a contract with any team at any time  that is, 100 per cent free agency  the teams with the most money would always have the best teams. Also, there is obvious value for the fans in having the same player on the same team year after year.

The act also instructs the court to consider the international ramifications of its decision. Obviously, it would be undesirable for Canadian teams to be operating under rulers different from those governing American teams.

As a result, professional sports are not held to the same standards as other businesses.

On the other hand, restrictions that go too far have been struck down, particularly in the United States. Players rights must be respected as well. Some degree of free agency allows them to play where they want eventually. It also has the effect of driving salaries upward.

As in all areas of law, a balance must be found. Both in Canada and the United States, the law has attempted to find a common-sense compromise between the competing interests of the players the owners, the fans and the sport as a whole.

Greg Monforton & Partners. Ph: (866) 320-4770