Intro to the Collective Bargaining Negotiations

This beard is on the comeback trail.

There is going to be a lockout.

If the media has been adequate at all about reporting on the labor negotiations for the National Basketball Association, it has been in making that one point clear. While the owners and the Players Association (NBPA) haggle, the only thing most people care about is that a work stoppage is almost a certainty in the short term. However, what issues are being discussed, what the end resulting Collective Bargaining Agreement (CBA) might look like, and what those resulting changes could mean for—in our case—the Oklahoma City Thunder is hardly discussed.

My goal is to change that. In doing so, I have to assume that, as educated NBA fans that frequent a niche NBA team blog, most of you reading this are at least familiar with the current CBA. This is not to say you understand the intricacies of collectively bargained by laws, but at minimum, you understand that trading players has specific guidelines, player contracts have minimums and maximums, and that an intricate salary cap currently exists. For me to explain the entire minutia in this series of posts would make each posting way too long even on the Matthewsian scale. However, if there is something I mention and you feel some further background would help your understanding, feel free to drop me an email (clarkfnmatthews at gmail dot com) and I will be happy to discuss it with you.

Alright, now for the fun stuff.

Why is there going to be a lockout?

To put it bluntly, the owners hold all the cards. In negotiations, each side puts forth their desires and ideally as they discuss, both sides make compromises. For these negotiations, there is very little room for the players to make compromises. The team owners, on the other hand, have a laundry list of demands they would like to see the NBPA accept. They include:

• A hard salary cap
• More restrictive age limitations
• Team contraction
• Limitations to guaranteed salary
• Shorter length of contracts
• Assuming the new CBA will be more restrictive to player contracts, “rolling back” current contracts to fit the new system
• NFL-style “franchise tags”
• Enhanced drug testing
• Heavily reduced revenue sharing with the union
• Elimination of “no trade clauses”
• Reduction in first round draft pick guarantees
• Increased utilization of Developmental League with reduced pay for players assigned there
• The abolition of agents

Okay, I made up that last one, but the owners have a lot of things they want and the union is vehemently opposed to almost all of them. For the rest, they are just adamantly opposed. Now, what are the players bringing to the table?

• They want contracts to stay the same, ideally increasing years that can be guaranteed and tweaking the levels of max contracts and player exceptions to the salary cap. But mostly they are happy with the status quo.
• Elimination of the age limit

That is it.

There will be some smaller things for which they will ask. Certainly players hate restricted free agency, but it is unlikely to become a major issue. That means, they have very few demands to give up before they are taking a step back, and stepping back is not going to be acceptable. This means coming to an agreement, particularly in time for the 2011/12 season, will be close to impossible.

[pullquote]Sadly, many of those millionaire basketball players live paycheck to paycheck like a Wal-Mart cashier.[/pullquote]

Making matters worse is that the owners are in a far stronger bargaining situation. With the economy’s struggles, the business side can argue effectively that cuts in expenses are necessary to the continuation of the league. Several openly struggling teams make the argument stronger.

The players will counter that the owners seem overly eager to make those large expenditures for a group suggesting that the system is broken. This is buoyed by the extravagant spending that occurred during the free agent bonanza of 2010. General Managers were passing out maximum contracts like Mardi Gras beads. While the free agent class of 2010 was historically strong, guys who—if the owners stance of necessary belt tightening is to be believed—had no business signing large deals were getting the most the CBA allowed. In many of those cases, the team management was only bidding against themselves. If teams are struggling in the economic climate, why are they so quick to offer those big contracts, and why should the union be responsible for protecting the owners from themselves?

Owners will spin the players’ best argument as a sign of exactly the opposite. Players like Joe Johnson and Rudy Gay getting exorbitant contracts means the system is broken, they will say. Competitive factors do not allow teams to make rational fiscal decisions.

Even if the owners did not believe this, which I am certain they do, they know the iron is hot for them to make the union cave. The last time they asked for major changes (the 1998 negotiations), they found that players were incapable of weathering a work stoppage. Sadly, many of those millionaire basketball players live paycheck to paycheck like a Wal-Mart cashier. With interruption in their cash flow, they ran quickly into financial problems.

Meanwhile, the owners of NBA teams rarely rely on profits from the franchise. Ownership is typically more of a vanity project than an opportunity to fill their coffers. They can withstand the losses of missing revenues for most of a year because Chesapeake will still be paying Thunder owner Aubrey McClendon while league Commissioner David Stern and Union executive Billy Hunter play their game of chicken.

With leverage like that, it is no wonder the owners are ready to act like the Cobra Kai and put the NBPA in a bodybag.

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NEXT: Part II, Why the Owners Want to Reduce the Number of Teams and Why the Players Would Not Like That or Contraction: Yea or Nea