What if union dissolution isn't a sham?

What if union dissolution isn't a sham?

The thought repeatedly is discussed that the unions dissolution is merely a sham to gain legal leverage. What if it isn't? What do the players need to do to prove that it's not?

The players may gain legal leverage by dissolving the union and forming a new trade association, but at some point playing under free market conditions would appear a better deal than collectively bargaining. When the owners offer drops beneath that point dissolution of the union isn't a sham, but reflects what is best for the players even if a CBA is not ultimately reached.

Did the NBA's offer drop that far? I would suggest that it did. Without artificial constraints that can only be applied due to the CBA, the players would almost certainly make considerably more money than 50%. Prior to the salary cap rules in the NHL, the players were making around 70% of the revenue.

In MLB, the players are making around 55% of revenue [according to what calculations I can do with Forbes data].

In general, a free market is likely to pay them more than the 50/50 split the NBA is offering and almost certainly considerably more than the 47% reset proposal the NBA would theoretically offer the players if they could still bargain collectively now.

The union does take on a large socialistic role amongst the players spreading out the NBA's wealth moreso than it would be spread out otherwise by limiting max salaries, instituting minimums, and putting in a retirement plan that really only has meaning to the lower salaried players. In that sense, it behooves the players [as a group] to bargain collectively.

However, that benefit for the players is likely coming at a 2-300 million a year cost and may simply not be carry forth that much value. The players have dissolved the union, and the assumption is that they need a union.

They don't need one nearly as much as the NBA needs them to have one. The players would assuredly love the NBA to open its doors right now and let them play without a union on individually negotiated contracts without any of the anti-monopolistic rules attached. The NBA will refuse to do that.

This makes for all the more interesting legal battle. The NBA will call the dissolution of the union a sham, but the fact that they'd even argue the point shows the union does not benefit the players.

A labor union should protect labor, but the owners are fighting to keep one because the labor union effectively protects them. No one seems to mention that, but isn't there something inherently wrong with the labor union creating more benefit for the owners than for labor? It has always stricken me as a giant elephant in the room.

At the point where the owners of a league want to fight to say the players aren't really dissolving the union because they extract more benefit from its existence than the players should be all the evidence you need that the other side really does want to dissolve the union because it's hurting them.

Comments

Leave a comment
  • Very interesting article, Doug. Just think how much Lebron would have gotten paid if their were no caps. Yes, the CBA is the only thing saving the owners from completely going in the red.

  • Doug, I see one flaw in your argument. As wit any socialist concept the union hurts about 5% of the best players but it immensle benefits the 80% of the marginal NBA players. So to say that it hurts the labor is, in my opinion, not accurate. It hurts the few best of the labor, but benefits the majority of it. Thus, if you want to drop qualifiers, it helps the labor. The peculiar fact that it also helps the owners comes from the NBA labor market being in effect almost a monopsony as well, i.e. the supply of really qualified labor is very limited and is always much smaller than the demand. Thus, to call NBA a monopoly would be inaccurate as well..

  • In reply to robert:

    That depends largely on your view.

    I don't think that NBA salaries would contract for the other players. There are only a handful of players who would get considerable raises over their present salaries. That total extra money probably is no more than 200 million or so.

    The minimum level players would probably take a hit without a vet minimum, but it wouldn't get too low because those guys could still take on European deals for similar money.

  • "No one seems to mention that, but isn't there something inherently wrong with the labor union creating more benefit for the owners than for labor? It has always stricken me as a giant elephant in the room."

    I agree with Robert's comments. I would only add that the union benefits the players by keeping them from killing the goose laying golden eggs. Without a CBA, you're probably looking at an 8-12 team league. That's great for the superstars, stars and maybe top tier role players, but it would suck for the Keith Bogans of the world. Plus, the bidding war for the superstars would start to tax even the Lakers' and Knicks' budgets and possibly render them unprofitable in the long run.

  • In reply to Tyler Soze:

    Eh, I think the argument that the union depressing salaries to help the owners stay in business to ultimate help the players is pretty darn sketchy.

  • Which world would you rather live in? One where as a "business" players like Bronald, Wade, Rose, and Kobe should make $40 or 50 Mill a year while Asik, Taj, and Brewer make less then a tenth of what their teammates make? Or one where fans can afford to watch and go to games, and most viable/rotation players players make between $3-6 Mil and stars at max $12-13 Mil a year. So much more revenue can be made today because people have replaced family/peronal lives with stars including sports stars. So take that revenue and after the players and corporations make thiers, give some back to inner city jobs and education programs. Socialism no. Sports as a national past time/program to better disadvantaged urban youths and adults who provide much of the supply of these players to begin with from sad, impoverished hellholes to begin with..

  • In reply to RoadWarrior:

    Yeah, if we could just take the money and give it back to the community that would be great.

    However that's not happening regardless of how the pie between owners and players is split up.

    It's an entirely distinct and separate issue. If you think that owners are lowering ticket prices if they get a better deal then think again. They'll charge what the market will bare either way.

  • That is a very interesting argument, Doug. The NBA/owners are arguing to keep the union and collective bargaining intact because this union relationship benefits the owners far more than the players.

    Apparently, that's why the NBA is trying to get the New York court to declare the NBA's lockout legal and the players disclaimer of interest ineffective - because the lockout is only legal in a collective bargaining relationship. Or in the alternative, the NBA argues, if the disclaimer of interest is effective, then please your honor void all the players contracts as they were negotiated under the collective bargaining process.

    Your argument deserves more media coverage, Doug. It would be quite interesting to see the result if the players began making media comments to this effect, and then argued this in court as well.

Leave a comment