Friday, August 9, 2013

The Irony of Labor Law

In  the 1960s and 1970s, when sports unions ascended, effective use of labor law, especially by the Marvin Miller-led MLBPA, enabled them to make significant strides. For about twenty-five years, through the mid-1990s, nearly every work stoppage in American professional sports leagues was a strike. Since the settlement of the MLB players’ strike in 1995 each and every work stoppage has been a lockout …that is the cancellation of games was motivated by the owners and not the players.  In all cases, three lockouts in the NHL, two for the NBA, and one for the NFL, the owners have rolled back prior concessions and gained a CBA considerably more favorable to their interests.  Primary, the players’ share of revenue has fallen from more than 60% to less than 50% for each league that has locked out its players. The (non-statutory) law stipulates that the terms of a CBA stay in effect after expiration until a new agreement is reached. The satisfied party must be pressed to change the status quo, and the income eliminating work stoppage is the most effective force. Logically the side with the most leverage to shift the terms in their favor will initiate a stoppage…and that’s been entirely a one way street for now fifteen-plus years.  The spirit of the law authorizing lockouts is that it gives management a tool to balance a union’s right to strike. Except it is not balanced in professional sports.  Owners, were once hesitant to force a stoppage. That was until the NHL, under Commissioner Gary Bettman, exposed in 1996 that PR damage from a lockout was minimal and clearly offset by the more beneficial CBA.  The NBA, under the leadership of Bettman’s friend David Stern quickly followed suit, and locked out the players in 1998.  

Modern day ownership is much better suited to weather the storm of a stoppage than their predecessors; they are wealthier, more diversified and with long-term contracts for broadcast rights, luxury suites, sponsorships, less dependent on game specific revenue. The NHL and NBA have locked out the union at the expiration of every CBA since their fist try, and extracted more from the players each time. The NFL, which boasted nearly twenty years of labor peace, jumped on board in 2011, actually accelerating the termination of their CBA, to lockout their players. Only MLB, once the primary labor battleground, has not followed suit, but the different dynamics holding labor peace there may also be changing. 

So where does it go from here? What’s to stop owners from locking out until all the gains for players made by unions and antitrust relief (out of play under labor law) are extracted? In the reserve clause era players earned less than twenty percent of revenues had no mobility rights and were happy to take it.  Labor law allows lockouts and denies antitrust. Lockouts in particular provide owners the means to drive sports right back to those “good ole days”. The solution may be no union, and then no labor law, no lockouts... and antitrust relief back in play.

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