Just when you thought it was safe to go back in the water ... (cue the shark music) ... the national leagues of both football and basketball appear to be heading for the rocks. Their games, of course, are just fine. The NFL just finished off a splendid season with a fabulous Super Bowl. The NBA is midway through its season with new stars blossoming and old ones inventing new tricks. The problem, however, is the labor relations systems in both sports are in trouble.
The NFL seems to be in worse shape. The owners of this socialist enterprise -- they share evenly the pot of gold from television -- have opted out of the current collective bargaining agreement, which is set to expire in 2011. That means that unless a miracle occurs by the time the free agent signing period begins in early March, the 2010-2011 season will be uncapped. The free market, rather than a collusive arrangement of the 32 owners, will determine what unrestricted free agents will be paid. Oh no! This could risk parity among the teams on the field. Tell that to the Rams that won just one game out of 16 last season or the Lions that won two -- compared with the Colts that won 14. We wouldn't want anything to happen that would risk this parity.
The NBA's collective bargaining agreement expires on July 1, 2011. The parties have been enjoying some "contentious" negotiating sessions, we are told by NBPA executive director Billy Hunter. The owners have made plain that they need substantial concessions from the players. Their soft salary cap has become squishy. The so-called "mid-level exception," the owners say, has raised the average salary from one million in 1998-99 to five million today.
For most sports fans, this stuff is really quite boring. Who cares how much these millionaires on both sides of the table earn. At the same, it is also quite frightening. No football? No basketball? I wish I could tell you that everything will be ok, but based on prior experience that does not seem likely. Both sports have suffered disruptions in play in the past. Management regularly threatens to lockout the players. We don't hear much by way of militancy from the unions, but it is still early.
The NBA's David Stern is an old hand at this business game. He is certainly not intimidated by the fact that LeBron James, Carmelo Anthony and Dwyane Wade showed up at the negotiation session. Stern insists that the NBA labor system is broken and has offered to open up the League's books to the union to prove his claim. (You don't agree to do that unless you think it will back up what you say.) The NBA, he claims, will lose a total of $400 million this season. That was why the owners proposed a reduction in the players' revenue share to less than 50 percent, the institution of a "hard" salary cap, the elimination of guaranteed contracts, the revision of current player contracts and the elimination of cap exceptions. These would be sweeping revisions indeed.
By comparison, the NFL-NFLPA negotiators say things are proceedings "well." NFLPA executive director DeMaurice Smith periodically tells the media that the NFL is planning a lockout for 2011, and he may be right. The union will likely miss the steady hand of the late Gene Upshaw in negotiations, and Roger Goodell is piloting the owners for the first time. There are plenty of veterans on both sides, however.
At this point, it is best not to take anything the parties say publicly too seriously. Both negotiations are in a very preliminary stage -- assuming the NFL has given up trying to get a deal before the free agent deadline next month.
Uncertainty is a critical strategy in collective bargaining. You want your opponents to think you would be willing to do something that makes no sense -- like killing the golden goose of football or closing down the NBA. Both sets of owners know what the NHL did in 2004-2005, missing an entire season to break the union. The NFL and the NBA need their unions in order to embody their collusive arrangements in collective bargaining agreements -- this makes those arrangements exempt from the antitrust law. They just want better deals, and they are likely to eventually get some of what they want.
In the meanwhile: Don't worry. Be happy.