NFL Free Agency: Land Rush to Musical Chairs

      When the United States offered free land to settlers in the Oklahoma Land Rush, there were families who had carefully surveyed and prepared where to stake their claim. Their wagons galloped from the starting lines and went straight for the best land. Other ill-prepared wagons never got off the line. This is the case with NFL Free Agency, which allowed the first official signings today with the start of the new league year. Franchises that have prioritized players and are prepared to offer them tempting packages move with lightning speed and use the first few days of the process to lock down critical building blocks, while other franchises largely sit and watch.

           The same is true of the free agents themselves. In meeting with a client, we would carefully chart which franchises were most desirable for that player far in advance. The player would list priorities like: 1) Short term economic gain 2) Long term financial security 3) Geographical location 4) Family considerations 5) Endorsements 6) Winning 7) Quality of coaching 8) System or scheme 9) Whether they were starting 10) Facilities. In 1993 Safety Tim McDonald of the Arizona Cardinals had options as part of the very first class of NFL Free Agents. When he did an internal inventory, he prioritized two goals. One was winning because the Cardinals had not fared well and the second was being closer to his family in Fresno, California. Multiple teams were interested. Towards the end of the process the San Francisco 49ers, a winning team, expressed interest. It fulfilled the winning priority and was the closest team to Fresno. So Tim was able to tell me "get the best deal you can from the 49ers". This was a different approach than pitting the teams against each other and signing with the highest bidder. But Tim had clarity as to how to use the process to produce ultimate fulfillment. Based on these considerations a player has a rational basis for decision-making that does not lead to confusion facing multiple options. The enemy is cognitive dissonance, which causes stress in decision-making filled with too many considerations. This in turn causes a player to swing back and forth as they eventually just make a choice to relieve the stress.

           The true superstars of the NFL rarely are available in free agency. Teams either sign them far in advance of their freedom to long-term extensions, or they are tagged and franchise restricted. The auction bidding dynamic of free agency causes B+ talent players to get A+ contracts. Because the only other mechanisms to enhance a roster are the NFL Draft or trades, free agency creates free market competition that drives up prices. Free agency is the only process that allows players the benefit of multiple teams bidding for their services. It can be an exhilarating process.

           Free agency can also be stressful for players. Athletes tend to like structure and certainty in their employment. They are drafted by teams initially and flourish with itineraries as well as calendars that make clear how they are to spend their time. Free agency can create uncertainty and lack of clear structure, until a signing occurs. Teams tend to spend their premium dollars on their top prioritized players and sign them rapidly in the first week or so. This creates a musical chairs effect where the best players find their new homes quickly. As time goes on, the pace of signings slows precipitously and some players will have a difficult time finding a remaining chair. NFL Teams have also adopted a rapid signing pace to avoid losing out on all their top choices. Michael Huyghue who was President of the Jacksonville Jaguars, pioneered this approach when he realized that allowing players to make multiple visits over a long period of time could result in a team being turned down by multiple players. He would invite a player to come to Jacksonville and make a premium contract offer on that visit. But the player would be told he had to accept while he was in town.

           Be sure to keep your eye on how the highest quality franchises and best-prepared players navigate this process smoothly in the next week, while other teams and players flounder in this process.