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Media & Entertainment Law

: Sports Biz

Labor Woes Plague Major Sports Leagues

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In the midst of a somber and subdued opening ceremonies of the Winter Olympics, it is probably not the best time to take a look at the business side of the National Basketball Association, the National Football League or Major League Soccer.  However, they all happen to share one thing in common:  all three leagues are currently negotiating new collective bargaining agreements with their respective players associations and, at this point, negotiations are not going all that well.

The current NBA agreement expires on July 1, 2011, leaving the prospect of a lockout in 2011 very real.  The owners tore up a proposal it had made to the players following a "contentious" negotiating session yesterday at All Star Weekend.  The proposal had been rejected by the players association, so the owners took the whole proposal off the table, rather than negotiate it piecemeal.  The owners are seeking substantial concessions, including a hard salary cap that would eliminate the so-called "mid-level exception" that has been responsible for raising the average salary in the NBA from about $1 million before the 1998-99 CBA was signed (when the mid-level exception was first obtained) to $5 million today.

The NFL owners have opted out of the current collective bargaining agreement which means that unless there is a new agreement in place before the free agent signing period begins, the upcoming season will be an uncapped season.  What exactly that will mean for the league's valued parity is the great unknown, since, as of this point, the number of unrestricted free agents eligible for uncapped salaries is unknown.  Nevertheless, it's not a good sign, nor is the lack of progress on a new CBA, progress which is hampered by the failure of the owners to agree on a revenue sharing model, which needs to take place before serious negotiations on the CBA can be concluded.  Roger Goodell just got a five year contract extension so at least the commissioner won't be locked out in 2011.

The MLS collective bargaining agreement has expired and the league and its players are negotiating a new one.  The deadline for conclusion of negotiations had been extended twice to give the parties an opportunity to successfully conclude negotiations but Snowmaggedon on the East Coast interfered, so the deadline has been extended again until later this week.   If talks break down, expect the  players to walk.  The salary scale in MLS is almost criminally low and the league really needs to raise minimum salaries and total team caps significantly if it expects to be taken seriously both in the US and internationally.

If all of these negotiations are not successfully concluded soon, 2011 will see the return of baseball as the  national pastime as all we will be left with is baseball, college sports and ESPN Classic.

Full post as published by Sports Biz on February 13, 2010 (boomark / email).

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