Negotiation Process of Nba Lockout

NEGOTIATION PROCESS EVALUATION

-2011 NBA Lockout-

The 2011 NBA Lockout was the fourth and one of the most serious lockout in the history of National Basketball Association occurred through the disagreement between NBA, one side, consisted of commissioners and 30 team owners and NBA Player Association (NBPA) for the other side, which is the labor union representing basketball players in NBA for several subjects such as player contracts, trades, revenue distribution, salary cap etc. Bargaining period lasts considerably long, finalizing the lockout period with a final agreement after 161 days. Before analyzing the details of the negotiation process, I would like to make an overview about the NBA league procedure and the sides of negotiation in order to provide a better understanding of the process.

In the NBA league, there is an agreement called Collective Bargaining Agreement (CBA) between team owners and NBPA, formed with the approval of both sides in order to arrange all regulations related to them and create a stable NBA league. This agreement includes many financial issues including the payments of players, the distribution of revenues, taxes and other sport related decisions like age limitations and trade options. While CBA has been prepared, the expiration date is defined and after, it is ratified for the next period or renovated with a new agreement. In year 2011, the current CBA of 2005 ended up, leading a requirement for a new CBA due to economic conditions of NBA. It is claimed by the owners that, in the last year, the league lost $300million and a cut in the salary cup of player were needed. (Salary cup determines the amount of money that a sport club can spend on players’ salaries). That was the beginning of the negotiation process between team owners who want to decrease the share of players, so accordingly increase their own share, and players who want to maintain the same level.

The main goal of the negotiation was to decide on division revenues and to restructure the salary cup. The decrease in the net income of NBA league for the last year was a valid reason but according to my point of view the overlapping of the profit lost and the extinction date of the 2005 CBA created an opportunity for the owners to turn the situation into their advantages, and try to get benefit from it. Current conditions of the league necessitated players to sit on table and focus on a mutual agreement for both sides. According to the previous CBA, players were getting 57% of the total basketball related income as salary cup, but the owners began the negotiation by offering a cut of 40% in the players’ salary referring a salary cup cut from $58million to $45million. That was a huge decrease for the player and at the first meeting they began to think about preparing a lockout and filling complaint for antitrust law claiming that the league is negotiating in