BSLW6604 Lecture 16: Collective Bargaining in Sports
8 Jun 2018
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1. Collective Bargaining
a. “An activity whereby two groups, union and management, attempt to resolve conflicting
interests by exchanging commitments pertaining to the terms and conditions of
employment”
b. Three factors that impact a union’s power
i. Maturity of the union
ii. Bargaining power and leverage
iii. Company Stability
c. The stronger a union, the more permissive subjects that it will be able to “force” the ER
to negotiate
d. NFL CBA covers, among other things:
i. Union/Management Rights
ii. Commissioner Discipline (best interests of the game)
iii. Standard Player Contract
iv. Grievance Procedure
v. College Draft
vi. Salary Cap
vii. Free Agency
viii. Related Player/Club Issues (off-season, etc)
ix. Salaries/Economics
x. Benefits
xi. Incidentals (travel allowances, per diems)
2. Revenue Sharing
a. Free Markets: English Premier League
b. Salary Structure
i. League levels
1. Agreed upon % shared between owners and players. Define in collective
bargaining as “league-related revenues”
2. Ex. NBA & NFL
ii. Club level
1. Salary caps
a. General purpose
i. Promote competitive balance
ii. Economic viability of league
iii. Broad sharing of revenue
iv. Types
1. Hard caps: NFL, NHL
2. Soft caps: NBA
3. Salary tax: MLB
b. Definition
i. A restriction or limit on the amount of money that may
be made available by the league to pay player salaries
ii. A limit on the amount teams can spend on player
contracts, which helps to maintain competitive balance
in the league. Without a salary cap, teams with deeper
pockets can simply outspend the remaining teams for the
better free agents
iii. Caps have been designed as a percentage of certain
league revenues. There must be an agreement on what
will constitute “defined gross revenue” (DGR)
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