NBA Sues Players Union to Avoid Antitrust Case

by John M. Curtis
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Copyright August 2, 2011
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             Looking down the road at a long cold winter, the National Basketball Assn. filed suit in U.S. District Court in Manhattan, seeking a ruling that the “lockout” does not violate antitrust laws.  Players Assn. attorneys regard the NBA as a monopoly because players have no option in the United States other than the NBA.  Seeking a new Collective Bargaining Agreement, the NBA wants to assure profitability to all 30 NBA franchises.   League officials cite data indicating that 22 out of the 30 NBA teams lose money every season.  Players’ reps believe there’s plenty of money to go around with the NBA earning total revenues of $4.3 billion.  Players Assn officials cite the lack revenue sharing as the real culprit, leaving two-thirds of the franchises losing money.  Most profits come from lucrative TV contracts, endorsement, advertising and merchandizing deals.

            Playing his cards close to the vest, NBA Commissioner David Stern wants a federal judge to sanction the NBA’s right to lock out players, something the Players Assn. views as union-busting.  Union officials, including players’ rep. Los Angeles Laker guard Derek Fisher, hope to convince a U.S. District Court Judge that the NBA Players Assn. is no different than an autoworkers’ or retail clerks’ union, where collective bargaining is the only path to fair wages and benefits.  Today’s NBA players earn an average $5.84 million a season, with the minimum salary just under $1 million.  Whatever parallels the Players Assn. makes to other unions, it’s going to be a difficult sell to a federal judge.  Stern filed suit after meeting July 29 with union reps for the first time since the July 1 lockout.  Since the July 1 lockout, some NBA players have considered playing this season in Europe and China.

            In addition to filing in Southern New York’s District Court, the NBA filed an unfair labor complaint with the National Labor Relations Board, claiming the NBLA has not bargained in good faith.  NBA “asserts that the Players Association has failed to bargain in good faith by virtue of its unlawful threats to commence a sham ‘decertification.’”  NBA officials are frustrated with NBLA’s unwillingness to share in the fiscal realities that leave 22 of 30 franchises running in the red.  Because of the competitive nature of the NBA Draft and free agency, the dwindling talent pool and fierce competitiveness for top players, salaries have been bid into the stratosphere, making it prohibitively expense to man small market NBA teams without incurring massive expenses.  Salary caps, whether hard or soft, multiyear contracts and revenue sharing don’t address NBA’s inflated salaries.

            Whether in professional sports or elsewhere, private owners have a right to run businesses in a profitable way.  Today’s inflated salaries and long-term contracts over-commits franchises, typically holding untenable contracts for collegiate basketball stars that don’t pan out in the NBA.  “The union’s improper threats of antitrust litigation are having a direct, immediate and harmful effect up the ability of the parties to negotiate a new collective bargaining agreement,” said the NBA’s lawsuit filed in federal court.  NBA owners believe the players union has no sympathy over the black-and-white reality that two-thirds of NBA teams lose money.  Revenue sharing alone can’t solve today’s inflated NBA salaries and talent drain, leaving small-market teams holding the bag while the elite franchise cash-in on lucrative TV contracts, endorsement, merchandising and advertising deals.

            Most labor courts or administrative boards have sympathies for unions, prompting the NBA to take defensive legal measures.  “These claims were filed in an effort to eliminate the use of impermissible pressure tactics by the union which are impeding the parties’ ability to negotiate a new collective bargaining agreement,” said Deputy NBA Commissioner Adam Silver, believing that the union, at this point, has leverage.  “For the parties to reach an agreement on a new CBA, the union must commit to the collective bargaining process full and in good faith,” said Silver, worried about comments by Players Assn. Executive Director Billy Hunter about decertifying the union.  Decertifying would leave the NBA without a negotiating partner.  Forcing the action into the courts gives the NBA added leverage.  NBA officials have lost all hope of getting a fair deal with the Players Union.

              NBA Players Union hasn’t accepted the draconic financial problems faced by today’s NBA.  Franchise expansion, competitive bidding, salary inflation, long-term contracts and free agency with a diminished talent pool have bid contracts into outer space, leaving most owners with unprofitable businesses.  Billy Hunter and the Players union don’t get it:  Revenue sharing won’t solve the league’s hyper-inflated salaries now averaging nearly $6 million a season.  Commissioner Stern understands that the current system can’t continue.  Arguing that only billionaire owners who write their NBA franchises off at a loss is no viable business model.  Nor does it work to punish successful franchises by forcing elite owners to share the profits.  Only in the courts or compulsory mediation will the union get it that they need to take owners’ demands seriously.  Real changes are needed now.

John M. Curtis writes politically neutral commentary analyzing spin in national and global news.  He's editor of OnlineColumnist.com.and author of Dodging the Bullet and Operation Charisma.

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