Sports Lockouts Are Here To Stay

You’re running a major sports league. Collective bargaining agreements expire every few years. Fans, now long accustomed to labor disputes, always come back, no matter how much they vow to stay away.

And of course, you’ve grown wise to the players’ tactics of striking late in the season (NHL 1992; MLB 1994), looking to maximize leverage by threatening to wipe out the playoffs, your version of Christmas season for retailers.

Locking out prior to the season helps you avoid ever reaching that point. It also puts you on offense – players begin missing paychecks once the scheduled season opener passes, instead of collecting most of their pay during the season and then leaving you in a lurch by striking close to playoff time.

These were just a few of the musings put forth by a panel of sports labor experts at the MIT Sloan Sports Analytics Conference in Boston this weekend. Led by Smith College economics professor Andrew Zimbalist, who has authored several books on sports economics, and University of Chicago economics professor Kevin Murphy, a onetime adviser to the NBA Players Association, a lively discussion pretty much concluded that there’s little reason that owner lockouts – recently employed by the NFL, NBA and NHL – will go away any time soon.

“A dispute can arise from a revenue problem, or a distribution problem, or both,” Zimbalist said, while noting that the roots of the recent contentious NHL dispute can be traced directly back to the league’s ill-fated strategy to pursue the Sun Belt in lieu of more northern markets and development in Europe. Throw in the fact that the bulk of the NHL’s profits accrue to a few clubs, and you see that both revenue and distribution are problems.

Murphy believes future CBA’s can run more smoothly by making them flexible, tying both owners’ and players’ fortunes to the success of the business each year - i.e. share the pain and gain. Problem is, each sports league aside from the NFL is divided into naturally warring factions. Large disparities in local cable money mean that big market and small market owners have very different agendas.

“We can do much better, but it can be difficult,” Murphy said. “Many clubs always have their short term agendas.”

On the union side, a new attitude of collaboration, working with management to grow the business to benefit everyone, is also something the panel, which also included Sports Illustrated legal analyst Mike McCann and NBA analyst Tom Penn of ESPN, would love to see. Penn on the recent departure of embattled NBA union chief Billy Hunter: “The NBA needs a leader who will cooperate and focus on growing the business.”

Of course – good luck with that. The panel basically acknowledged that what sounds great in theory would entail a tough culture change. Unions by nature are worker advocates, not business partners.

Zimbalist did note that occasionally it’s just bad timing that’s to be blamed. When a new commissioner or union head assumes his job – Roger Goodell and DeMaurice Smith in the NFL or Don Fehr in the NHL - a spat is sure to follow. No one wants to come into the job looking weak. “It would be great to time the retirements of commissioners and union leaders so that it’s not right when the next CBA comes up,” Zimbalist says. It’s a valid point - though it wasn’t a factor in the Hunter-David Stern NBA clash in 2011.

Maybe the biggest shock of all is the fact that the sport with most notorious labor-management history of them all is now the one in the midst of the most labor peace: baseball. The sport shares the same big market-small market division of interests that the NBA and NHL do, yet little has flared up in recent years. Commissioner Bud Selig, whom the press likes to vilify for presiding over baseball’s steroid era, doesn’t get enough credit for his implementing luxury taxes and keeping the owners individual agendas reigned in, according to Zimbalist.

“Selig figured out a way to get the owners to keep their mouths shut and to get on the same page,” he said.