By Dan Lust for LVSportsBiz.com
In 1968, the Redskins drafted James “Yazoo” Smith with the 12th pick. Smith, an All-American CB at Oregon, signed with the Skins for $50,000. As a rookie, he suffered a career-ending neck injury. Frustrated that he didn’t earn more in his brief playing window, he sued for $4.2 million.
The NFL and Redskins were named as defendants. He argued the Draft violated the Sherman Antitrust Act since it prevented teams from having to bid for his services – like Free Agency entailed. Being forced to go to one team felt like an unreasonable restraint on negotiating power.
In 1976, a Federal Judge ruled in Smith’s favor. He held that without the draft, Smith could have signed a contract for more money that – crucially – could have even guaranteed payment despite his injury.
The NFL’s antitrust liability was upheld on appeal. See this for background: washingtonpost.com/archive/sports… Smith won the battle, but not the war. Around this time, the Supreme Court established a “non-statutory labor exemption” to antitrust violations. That meant leagues could still hold their drafts if they were able to to get the players associations to agree to them within the CBA.
The next year, in 1977, the NFL and the players arrived at a new collective bargaining agreement. For the first time, the players association explicitly agreed to allow the NFL Draft. Other pro sports leagues soon followed. This is why Drafts exists today.