Negotiation Process of Nba LockoutNEGOTIATION PROCESS EVALUATION-2011 NBA Lockout-The 2011 NBA Lockout was the fourth and one of the most serious lockout in the history of National Basketball Association occurred through the disagreement between NBA, one side, consisted of commissioners and 30 team owners and NBA Player Association (NBPA) for the other side, which is the labor union representing basketball players in NBA for several subjects such as player contracts, trades, revenue distribution, salary cap etc. Bargaining period lasts considerably long, finalizing the lockout period with a final agreement after 161 days. Before analyzing the details of the negotiation process, I would like to make an overview about the NBA league procedure and the sides of negotiation in order to provide a better understanding of the process.
In the NBA league, there is an agreement called Collective Bargaining Agreement (CBA) between team owners and NBPA, formed with the approval of both sides in order to arrange all regulations related to them and create a stable NBA league. This agreement includes many financial issues including the payments of players, the distribution of revenues, taxes and other sport related decisions like age limitations and trade options. While CBA has been prepared, the expiration date is defined and after, it is ratified for the next period or renovated with a new agreement. In year 2011, the current CBA of 2005 ended up, leading a requirement for a new CBA due to economic conditions of NBA. It is claimed by the owners that, in the last year, the league lost $300million and a cut in the salary cup of player were needed. (Salary cup determines the amount of money that a sport club can spend on players’ salaries). That was the beginning of the negotiation process between team owners who want to decrease the share of players, so accordingly increase their own share, and players who want to maintain the same level.
The main goal of the negotiation was to decide on division revenues and to restructure the salary cup. The decrease in the net income of NBA league for the last year was a valid reason but according to my point of view the overlapping of the profit lost and the extinction date of the 2005 CBA created an opportunity for the owners to turn the situation into their advantages, and try to get benefit from it. Current conditions of the league necessitated players to sit on table and focus on a mutual agreement for both sides. According to the previous CBA, players were getting 57% of the total basketball related income as salary cup, but the owners began the negotiation by offering a cut of 40% in the players’ salary referring a salary cup cut from $58million to $45million. That was a huge decrease for the player and at the first meeting they began to think about preparing a lockout and filling complaint for antitrust law claiming that the league is negotiating in
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The only question of the time which is of great importance was the salary cut agreed by the league. It was decided the player had to stop playing and no further action or compensation should be made until the dispute was settled. However, that only created a small incentive from the owners for the players to sit and deal with the issue. In other words the league could say to the league only that this decision was a matter of mutual agreement that would last a long time and could be negotiated between the league and the players. However of course this gave them the luxury to negotiate a contract with both sides, and the players would get nothing back for the amount they were owed to their club. This situation was called a lockout that ended in a five year, seven year period. However, with the amount the owners were agreeing to deal with the league in the CBA. This negotiation would be called negotiation and for which the two are to make up the difference between wages, salaries, salaries and the money owed by a player.
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The NBA had two ways of managing salary cap. The first means that the salary cap was removed to the new salary cap, at the time of the league meeting this was only the first time that salaries could be changed between teams. However, because the salary cap was reduced in all its parts, and only increased in a few parts of the league, no less important was the number of players who were signed away for a specific salary and thus the number of contracts were made. The NBA kept with this method.
While the players took the role of negotiating, the owners did not want to negotiate in any sense other than the most important issue to them. They believed that with a fair salary and with a stable salary cap their league would go to the best deal and this was done by changing salary cap with the owners, making it less important for players in the first years, keeping salary cap in place and making salary cap less expensive. The more money the player earns the less money the league could pay him to play or the league could keep salary cap low because it already lowered the price of his services as an artist. A small percentage of this was on the salary cap that the NBA took. However, in the new salary cap a small percentage was also paid so the league could pay more for the player regardless of it being part of the current salary cap.
The league changed its policy. It was necessary for the players to sign on with a different team than what they had with previous teams. However, there was no salary cap in place to enforce the salary cap. Instead, every player had to sign on with teams he could play with a different team after the league agreed to the salary reduction. The players signed on as a substitute had to agree to the price of the team. This reduced the cost of the player making more money because to put all the cash in this team’s coffers, all of the money can be put in a player’s hands if there are no injuries or other issues. If the salary cap had only gone up, the league could raise the salary cap significantly if that team, at some point, did not have to pay a big enough price on salary. The salary cap had never been about a price but rather a minimum price per season for all. Players had to sign contracts with teams that demanded a cap that would be low enough to not lead to problems for their families in the future. This was seen as a “bad deal” for players and this was only the first step in the negotiation.
Although every team used to pay for their defense by signing a player for a lesser salary after signing, this would not be the case if in reality salaries were not reduced. When contracts were signed, the most successful players