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CBA Update: Nucular Option?

David Stern held court before the Bobcats-Grizzlies game this past Wednesday and spoke on latest developments in the dealings between the league and the Players’ Union.

Stern Says Decertifying Union a ‘Nuclear Option’

It is best to read the entire story, but here are a few thoughts of mine regarding the report.  This whole thing is essentially a giant game of chicken, and each side is looking to establish who has the bigger sledgehammer.

(note: I am not a labor lawyer, so most of this is pure conjecture and reliance on my general knowledge of negotiation tactics and antitrust law that I learned in year 2 of law school.  Fair warning.)

On the one side, the owners have the lockout option.  This option would mean that for as long as the NBPA refuses to capitulate, they prevent the players from working/earning their salaries.  The owners believe they can weather this storm better than the players can, just like back in 1998, and some have actually boasted that they can finish in a stronger financial position if they have no games at all.

In the opposing ring corner, you have the NBPA, whose biggest hammer is the threat to decertify their union.  Now, why would the players do this?

The answer lies in the duel nature of the union.  Unions exist in order to establish a collective bargaining power across a broad canvas of individuals.  The collective power that the union possesses allows them greater resources and a singular voice to argue for guaranteed standards and benefits.  What a union fails to do is differentiate between the levels of talent that exist within the work force.  While an under-performing or mediocre player is still guaranteed a minimum of salary, benefits, and pension, a high performing player is capped at the other end.  The protection guaranteed by the labor laws keeps the individual players safe but also restricts their ability to materially differentiate themselves outside of the talent pool to a proportionate degree (See my post on the NBA’s best bargains to understand what the top performers could arguably earn in an open-market system).  The union, while naturally at odds with the team owners, actually makes the owners’ negotiation far more straightforward and cost effective than having to negotiate individually with each individual player for tailor-made salary and benefits.

The NBPA knows that the owners prefer the union structure and the inherent bargaining power that it imbues to them, which is why they’re putting its existence on the table.

Here are a few of the major things the players would gain if they decertify the NBPA:

  • It would prevent a lockout.  The lockout would be avoided because the CBA is a labor deal negotiated between all the league owners and the NBPA.  In such a deal, each side willingly gives up rights that are normally protected under federal law in the name of contractual agreement.  If one party ceases to exist, the labor deal ceases to exist as well because there is no remaining party left to fulfill the contractual obligations.  The owners would no longer be able to negotiate as a unit, but instead would become 30 individual enterprises who are at risk of anticompetitive collusion if they all decide to lock out the players.
  • Antitrust law would operate as the protection of the players.  Just like in the NFL in the late 80’s, the players would able to bring suit against the owners under antitrust law in order to undo the owners’ heavy hand on player movement and salary structure.  Things like restricted free agency would be deemed an illegal constraint of free trade, and therefore subject to litigation.
  • Individual players would garner higher negotiating rights.  Since the players would no longer have to acquiesce to the best deal that the NBPA was able to negotiate, they could then negotiate their own labor terms as they see fit and as their resources allow.

Here are a few things that the players would forfeit:

  • All of the players’ union protections would be gone.  These protections include the guaranteed salaries, the health benefits, minimum contracts, the mid-level exception, and their pension.  All of these things would have to be re-negotiated on a player-by-player basis.
  • The players would not be able to negotiate in any sort of collective form since, of course, they had just opted to abandon that bargaining power.  If they attempted or even gave a hint of something collective, the owners could argue in court that this decertification was nothing but an act of theater in order to damage the owners’ bargaining position.  They would argue that the players are trying for double protection under both labor law and antitrust law, which Gabriel Feldman, sports law professor at Tulane, said they cannot do.
  • Each individual team would now be enabled to set its own labor policy as it saw fit.  This could potentially lead to a great imbalance of competitiveness in the league, as players would be more likely to gravitate toward freer work environment situations (think: working in Texas vs. New Jersey) but would leave many out in the cold since teams only carry 12 men on their roster (of course that stipulation could change as well).
  • There would be a great increase in legal overhead.  As complicated as player negotiations are now, the removal of the union would make them increasingly more complex and as such, more expensive.  Players and teams both would have to spend more money to deal with the negotiation process as well as any anticompetitive lawsuits that might flow out of them.

If you consider the weight of all of these factors as well as the myriad more that I’ve not begun to consider, you can understand why Stern calls this the “nuclear option.”  If you set off the bomb, you have to be willing to accept the collateral damage to your own side, and at this point it is debatable who would be hurt more.

Even though reportedly two full teams have signed on to agree to the decertification option, I’m inclined to believe that most of those players don’t fully understand the magnitude of cutting off the guarantees in order to gain personal bargaining power.  I think you would see a huge disparity between players who can afford top flight bargaining agents and those who cannot, which would lead to an even greater divide between the economics in the game.

This debate on dissolving the union is as much philosophical as it is practical. There is a cost to economic freedom, and when you’re dealing with millionaires and billionaires, the cost is arguably outside static conception with a plethora of unintended consequences.  The players could finally balance out the bargaining teeter-totter, but at a cost that I don’t believe they’re willing to conceive, let alone burden.

So if you were one of those mid-30’s players, nearing the end of your career and vying for a veteran minimum contract that is quickly disappearing, what would you do?  Would you shrug?

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