Tuesday, October 4, 2011

NBA Labor Talks Go Nowhere

Pro basketball labor negotiations concluded today without an agreement and with grim portents for the coming months: The entire October slate of pre-season games has been cancelled, and regular-season games will be cancelled next Monday if there is no agreement by that time.

Reading the quotes in this article, it seems that the NBA owners formally offered a revenue split of 47% to the players, but Commissioner Stern later strongly hinted that they are willing to come up to 50%. The players' union, however, remains unwilling to budge from its latest offer of 53%. (Whether the owners are sincere in suggesting that a 50-50 split would sate them is unclear, but it would be difficult to walk back from such a public statement.)

It seems, then, that the owners are more ready to compromise to reach a deal today and begin playing ball. I do not attach any moral opprobrium or admiration for a willingness to cave on one's initial position, or for a stubborn insistence on not losing face. I merely note that the players appear less willing to agree to the psychologically salient half-half division of revenues. (They may soften their resolve after a couple months of lost paychecks, of course. An entire missed season of salary is a greater loss, given the average player's 5-year career, than the aggregated annual differences between 50% and 53% of total revenues.)

Of course, a negotiating party can try to appear reasonable by throwing out an extreme initial bid and then "compromising" to something less provocative. And the owners have already won a dimension of these talks by carving out certain revenue streams from the definition of "Basketball-Related Income" that is subject to division. I am mindful that Stern and the NBA owners are trying to spin external observers and commenters. In these talks, the owners began with a proposal of 46% to the players, while the players would have been chuffed to continue the 57% dictated by the 2005 labor agreement. Perhaps the players feel that they should not have to move so much. But the old contract is now null and void; the players' new bargaining position is determined solely by economic factors and the wiles of their negotiating team.

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