[Originally published April 2012 The Verdict]
Brittany L. Forgues, 2012 J.D. Candidate
Recently in the world of professional sports,commentators have discussed the ramifications of collective bargaining agreements and how they affect certain professional sports leagues. On behalf of the Sports, Management, and Entertainment Society at the Massachusetts School of Law, we would like to offer this brief article on some of the important elements of collective bargaining agreements and how the NFL and the NBA have changed their collective bargaining agreements lately.
What are Collective Bargaining Agreements?
Collective bargaining agreements, in the context of professional sports, are the agreements reached between a particular league’s players and the league owners. A league’s collective bargaining agreement establishes specific elements of how the league will operate, such as: division of league revenues, team salary caps, free agency requirements, restrictions on player mobility, provisions regarding the drafting of players, disciplinary rules, and other general regulations of the league. In addition, many of the leagues incorporate their constitution and bylaws into the collective bargaining agreements. These bargaining agreements are the primary authority for players, their agents, team owners, and other league officials.
What Are the Major Changes to the NBA’s New Collective Bargaining Agreement?
The biggest change in the NBA’s new collective bargaining agreement is the percentage of basketball-related income that will be divided between the players and the owners. Although there were other heavily contested issues, such as player salaries, rookie contracts, and specifics regarding trades, the revenue split seemed to be most in dispute. Under the previous agreement the owners received 43% of basketball related income. Under the new agreement the owners will receive between 49% and 51% of basketball related income. As reported in a Forbes magazine article, “NBA Owners Win Big With New Collective Bargaining Agreement,” this change in percentage results in an increase of income for NBA owners of approximately 270 million dollars. It is also important to keep in mind that an increase in the share that goes to the owners effectively decreases the amount that can be distributed among the players. Although some would argue that the players are already paid a fortune, it doesn’t matter if they experience a little set-back; one could also argue that in the end it is the players, not the owners, who pay the price for the grueling workouts and games that they put their bodies through each season, and that when their career finally does come to an end most of the athletes have nothing to fall back on except for the money they made while they were playing.
What Were the Major Issues Negotiated in the NFL’s Collective Bargaining Agreement?
The revenue split between owners and players was also one of the hot topics when the NFL was trying to get a new collective bargaining agreement signed in July 2011. In the end the players and owners agreed that the players would receive 47-48.5% of all revenue, which was a slight decrease of approximately 4% from the previous agreement. However, under the new agreement, the owners were no longer allowed to take 1 billion before the revenue split. Another issue that was discussed but not changed in the negotiating process was the number of regular season games that encompass each NFL season. Obviously the owners would like to increase the number of games in the regular season, which would in turn increase the amount of revenue for both sides. This would also, however, put a greater strain on the player’s bodies and health. Professional football players put their bodies through immense training during the sixteen week regular season, adding any more games to the schedule would likely have lasting effects on their health both during their playing days and after they stop playing in the National Football League.
Collective bargaining agreements are also used in other employment situations. The negotiation process is a valuable tool that allows employers and employees to communicate and resolve many major aspects of the working relationship. Although it appears from the above analysis that collective bargaining agreements merely decide how much money players and owners will make in the professional sports leagues, they in fact play a substantial role in shaping how the league will operate, and how players will be treated both while they are playing and after they retire.