In the typical collective bargaining contract outside sports, each employee is paid a uniform wage no matter what her or her level of skill, e.g., an excellent welder and a mediocre welder would be paid the same hourly wage. In professional team sports, however, agents are permitted to represent individual players and negotiate employment contracts with salary and bonus provisions which are dictated by supply and demand for the particular talents of the individual player. In recent years unions have negotiated economic packages which have taken greater and greater share of team payrolls. The situation has been further complicated by salary caps which limit the total amount a team may spend on salaries. This in turn has put further pressure on individual bargaining since less money is available.
Several factors are responsible for the growth in agent representation of professional athletes.
The rise of the labor movement in professional team sports is probably the single most important factor. Before the various players' unions gained strength, professional athletes were reserved to their respective teams for their entire playing careers. Without the ability to sell their services to the highest bidder through the mechanism of free agency, there was no need for an individual bargaining agent. Players were offered a salary by the team on a take it or leave it basis. If the player was dissatisfied, his only alternative was to retire.