Industrial relations / collective bargaining - collective bargaining in the crisis_Christian Welz
N B A Collective Bargaining Presetation
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Transcript of N B A Collective Bargaining Presetation
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A Study in Conflict Analysis
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Founded in 1946
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3rd-most lucrative sports league in the world
$3.384 Billion in basketball-related income in 2006-2007
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NBA Owners
NBA Structure
NBA Players[Unionized]
CollectiveBargainingAgreement
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$0$100,000$200,000$300,000$400,000$500,000$600,000$700,000$800,000$900,000
$1,000,000
1954
AverageSalary
Owners were frustrated Players salaries were increasing
Salaries
$0$100,000$200,000$300,000$400,000$500,000$600,000$700,000$800,000$900,000
$1,000,000
1954 1976
AverageSalary
$0$100,000$200,000$300,000$400,000$500,000$600,000$700,000$800,000$900,000
$1,000,000
1954 1976 1983
AverageSalary
$0$100,000$200,000$300,000$400,000$500,000$600,000$700,000$800,000$900,000
$1,000,000
1954 1976 1983 1991
AverageSalary
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Salary Cap: Maximum amount a team can spend on player salaries
Calculated as percentage of league’s income.
Example:• In particular year, League brings in $3 Billion• Salary cap agreement is set as 50%• 50% of $3 B = $1.5 B• Divide $1.5B by 30 teams = $50 M
1983: Salary Cap Introduced
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“Soft” Salary Cap – Teams have exceptions, and can find loopholes.
Owners would ideally implement “hard salary cap”, but the players would never accept such a plan.
“Soft” Salary Cap
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Star players were demanding large contracts. If one owner refused, another would accept.
Teams were spending too much to be competitive.
Salaries Revisited
Example:1996Shaquille O’Neal7 years, $122
Million
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March 1998 – June 1998
Owners vote to re-open the collective bargaining agreement.
Owners insist on “luxury tax” – 100% tax on every dollar spent over salary cap.
Players reject, they want to keep the current system, or slightly decrease salary cap percentage.
The Conflict
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i. NBA - Owners/Commissioner (David Stern)
ii. NBPA/Players Union (Billy Hunter)
[Billy Hunter][David Stern]
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1. Implement new Collective Bargaining Agreement
2. Accept NBPA counterproposal3. Lockout the players 4. Use replacement players if at an
impasse
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1. Accept owners’ plan2. Table counterproposal3. Reject proposal/Strike
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NBA
New Plan N Y N Y N Y N Y Y N Y N Y
Accept Counter Y Y N N Y Y N N Y N N Y Y
Replacement Players
N N Y Y Y Y N N Y N N N N
Lockout N N N Y Y Y N N Y N N N N
NBPA
Accept Owners’ Plan
N N N Y Y Y N N Y N N N N
Counterproposal N N N N N N Y Y N Y Y Y Y
Strike N N N N N N N N Y Y Y Y Y
Decimal … 2 3 4 … 29 30 31 32 33 … 95 96 97 98 99 …
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NBA
New Plan N Y N Y N Y N Y Y N Y N Y
Accept Counter Y Y N N Y Y N N Y N N Y Y
Replacement Players
N N Y Y Y Y N N Y N N N N
Lockout N N N Y Y Y N N Y N N N N
NBPA
Accept Owners’ Plan
N N N Y Y Y N N Y N N N N
Counterproposal N N N N N N Y Y N Y Y Y Y
Strike N N N N N N N N Y Y Y Y Y
Decimal … 2 3 4 … 29 30 31 32 33 … 95 96 97 98 99 …
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NBA
New Plan N Y Y N Y N Y Y N Y N Y
Accept Counter Y Y N Y Y N N Y N N Y Y
Replacement Players
N N Y Y Y N N Y N N N N
Lockout N N Y Y Y N N Y N N N N
NBPA
Accept Owners’ Plan
N N Y Y Y N N Y N N N N
Counterproposal N N N N N Y Y N Y Y Y Y
Strike N N N N N N N Y Y Y Y Y
Decimal … 2 3 … 29 30 31 32 33 … 95 96 97 98 99 …
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NBA
New Plan N Y Y N Y N Y N
Accept Counter Y Y N N N N N Y
Replacement Players
N N Y N N N N N
Lockout N N Y N N N N N
NBPA
Accept Owners’ Plan
N N Y N N N N N
Counterproposal N N N Y Y Y Y Y
Strike N N N N N Y Y Y
Decimal … 2 3 … 29 32 33 … 96 97 98 …
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10 possible states remain
1 2 3 4 5 6 7 8 9 10
NBA
New Plan Y Y Y Y N Y Y Y N Y
Accept Counter N N N N Y N N N Y N
Replacement Players
N N Y N N N Y N N Y
Lockout N Y Y N N Y Y N N N
NBPA
Accept Owners’ Plan
Y Y Y N N N N N N N
Counterproposal N N N Y Y Y Y Y Y Y
Strike N N N N N N N Y Y Y
Decimal 17 25 29 33 34 41 45 97 98101
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NBA NBPA
NBA
New Plan 10 -7
Accept Counter 6 5
Replacements -5 -7
Lockout -3 -4
NBPA
Accept Owners 10 -7
Counterproposal 6 5
Strike -4 -3
Initial weightings
Both parties in favour of signing a contract rather than moving to strike or lockout
Preference Vector was created from option weightings
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Equilibrium predicted at State 4
NBA
x x E x x x x x x x Overall stability
r r r u u u r u u u Player stability
1 2 4 6 5 3 8 7 9 10 Preference vector
4 4 2 6 8 8 UI’s
6 9
NBPA
r r r u r r r u u u Player stability
5 9 4 8 6 10 7 1 2 3 Preference vector
4 4 6 7 UI’s
8
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Equilibrium predicted at State 41 2 3 4 5 6 7 8 9 10
NBA
New Plan Y Y Y Y N Y Y Y N Y
Accept Counter N N N N Y N N N Y N
Replacement Players
N N Y N N N Y N N Y
Lockout N Y Y N N Y Y N N N
NBPA
Accept Owners’ Plan
Y Y Y N N N N N N N
Counterproposal N N N Y Y Y Y Y Y Y
Strike N N N N N N N Y Y Y
Decimal 17 25 29 33 34 41 45 97 98 101
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Adjusted option weightings for NBA and NBPA
Resulted in new equilibrium states
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New option weightings
NBA takes tougher stance
NBA NBA New NBPA Old
NBA
New Plan 10 10 -7
Accept Counter 6 3 5
Replacements -5 0 -7
Lockout -3 0 -4
NBPA
Accept Owners 10 10 -7
Counterproposal 6 3 5
Strike -4 -1 -3
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2 new equilibriums
NBA
E E E E Overall stability
r r r r r r r r u u Player stability
1 2 3 4 6 7 8 10 5 9 Preference vector
4 8 UI’s
6 10
7
NBPA
r r r u r r r u u u Player stability
5 9 4 8 6 10 7 1 2 3 Preference vector
4 4 6 7 UI’s
8
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New option weightings
NBPA takes tougher stance
NBA NBPA Old NBPA New
NBA
New Plan 10 -7 -10
Accept Counter 6 5 7
Replacements -5 -7 -7
Lockout -3 -4 -1
NBPA
Accept Owners 10 -7 -10
Counterproposal 6 5 7
Strike -4 -3 0
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1 different equilibrium
NBA
E E Overall stability
r r r u u u r u u u Player stability
1 2 4 6 5 3 8 7 9 10 Preference vector
4 4 2 6 8 8 UI’s
6
NBPA
r r r r r r r u u u Player stability
5 9 4 8 6 10 7 1 2 3 Preference vector
4 6 7 UI’s
8
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Revised option weightings
NBPA misinterpreted preferences of NBA
1st level hypergame
NBA NBA by NBPA NBPA
NBA
New Plan 10 10 -7
Accept Counter 6 0 5
Replacements -5 2 -7
Lockout -3 2 -4
NBPA
Accept Owners 10 10 -7
Counterproposal 6 0 5
Strike -4 0 -3
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NB
PA
perc
eiv
ed
gam
e
NBA
E ETrue overall stability
E Overall stability
r r r u u u r u u u Player stability
1 2 4 6 5 3 8 7 9 10 Preference vector
4 4 2 6 8 8 UI’s
6 9
NBA as perceived by NBPA
r s s r u r u u u u Player stability
3 2 1 7 6 10 4 8 5 9 Preference vector
3 3 7 7 10 7 10 UI’s
2 6 6 8
4
NBPA
E E Overall stability
r r r s r r r u u u Player stability
5 9 4 8 6 10 7 1 2 3 Preference Vector
4 4 6 7 UI’s
8
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Conflict settled at state 6:
Eventually, the NBPA revised their counter-proposal and resubmitted
The NBA acceptedthis new proposal
NBA
New Plan Y
Accept Counter N
Replacement Players
N
Lockout Y
NBPA
Accept Owners’ Plan
N
Counterproposal Y
Strike N
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Season was salvaged (shortened schedule)
Irrevocable loss of TV ratings Estimated loss of $500 million in
player salaries
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Practice?