The advent of free agency with the new CBA in the NFL has not been a blessing for
all players. Instead, free agency, coupled with two different salary caps, has created
distinct winner and losers. Our results are very similar to those obtained by Quirk and Fort ( 1992) for baseball in that we find that salaries have become less equally
distributed. Superstars have gained dramatically from free agency. However, the pay
of the bottom two-thirds of the income distribution has fallen. In particular, the pay of
mid-level players has declined dramatically. The creation of a caste system is highly
ironic for a union that prided itself on emphasizing the interests of "the guards and
tackles" over those of the highly paid quarterbacks ( Helyar, 1995).
In addition to changing the size of the rewards, the new CBA has changed the
criteria on which players' pay is evaluated. As one might expect of a union to which
rookies do not yet belong, the NFLPA negotiated a salary cap for rookies that
significantly depressed their pay. Even veterans, however, were affected. Prior to the
new CBA, pay was heavily determined by the position one played. Thus, one was
slotted at a quarterback's or a linebacker's level of pay regardless of whether one
started. Under the new regime, starters experienced sharp increases in their pay while
players who did not start received sharply lower pay than before. The reward structure
in the NFL has thus moved markedly from "who one is" to "what one has done lately."
We thank Andrew Buck, Elizabeth Gustafson, Lawrence Hadley, Daniel Rascher, and David
Schaffer for their many helpful comments and suggestions. Jennifer Gordon and Yelena Suris
provided expert research assistance.
The salary of any undrafted rookie shall count toward the club's rookie cap only to the
extent that it exceeds the applicable minimum salary for that player (
NFLPA, 1993, p. 44).
DGR is "the aggregate revenues received or to be received on an accrual basis, for or with
respect to a league year during the term of this agreement, by the NFL and all NFL teams, from
all sources, whether known or unknown, derived from, relating to or arising out of the
performance of players in NFL football games, with only the specific exceptions set forth below.
The NFL and each NFL team should in good faith act and use their best efforts, consistent with
sound business judgement, so as to maximize DGR for each playing season during the term of
this agreement." DGR includes pre-season, regular season and post-season gate receipts (net of
admission taxes and surcharges paid to municipal authorities) and any proceeds from the
broadcast or rights to broadcast any NFL game (
NFLPA, 1993, p. 74).
A player earns one credited season for each season in which he received, or should have
received full pay status for a total of three or more regular season games, not including games
for which the player was on: (i) the Except Commissioner Permission List, (ii) the Reserve PUP
List as a result of a non-football injury, (iii) a team's practice or development squad, or (iv) the
Injured Reserve List (
NFLPA, 1993, p. 116).
The minimum salaries cannot increase by more than 10% per season and cannot decrease,
regardless of the change in Projected DGR (
NFLPA, 1993, p. 116).
The definition of accrued season is the same as that of credited season (in note 3), except
that games on the injured reserve list are included and that the number of regular season games
required increases from three to six (
NFLPA, 1993, p. 48).
Each season during the term of the agreement, each club can designate one of its players