Resolving Lockouts

By: Heather Meeker Green, Andrew Greaves

This year we have witnessed two of the largest sports conglomerates “battle it out” over contract negotiations. Both the NBA and NFL’s inability to work out a deal prior to contract expiration (or in the case of the more recent NBA situation, prior to the season start), left them play-less and cost them in many ways beyond financially. Using Accordence's tools to assess the 2011 NFL lockout for example, may shed some light on some different approaches that may have garnered better results, such as completing the agreement more quickly and efficiently and building a stronger relationship between owners and players.

When the collective bargaining agreement expired on March of this year, both sides knew that the issues of the labor negotiation were contentious, especially the division of the NFL’s $9 billion of annual revenue.

As the lockout roared on through the summer and fans feared that they would lose their football season, both sides lost the public opinion battle. For instance, the lockout became an argument over dollars in the media, as opposed to a negotiation over percentages. This enraged American sports fans who saw the lockout as “millionaires arguing over a few bucks” while the rest of the country struggled with a recession. It would be hard to know exactly went on behind closed doors during the negotiation, but the clear derision from both sides shows an ineffective approach from both sides to this negotiation. If Accordence had been involved in this negotiation, here’s how the labor negotiation may have differed:

Dig into interests

• One underlying interest of the players seemed to be respect from management. They were vastly offended when the owners tried to “hardball” them by holding a press conference about the successful new CBA before the players signed on. The players wanted their opinions and intelligence to be respected, and for owners to not think that they could push players around due to their wealth and more extensive business background. The players wanted the owners to realize that an NFL season cannot happen without them, and the players are not just their pawns.
   

• One of the owners’ possible underlying interests was for players to recognize the financial risk of owning a sports franchise. The Dallas Cowboys are currently valued at $1.5 billion. The owners stated that they wanted a higher percentage of the new CBA to pay for investments in new stadiums. However, they also may feel entitled to a higher percentage because of the uncertainty that comes with such a large investment.

Creative Criteria

It makes the most sense for the NFL to base its criteria on the last collective bargaining agreement. However, to gain perspective, Accordence may have encouraged NFL owners and players to see how other sports franchises have dealt with the issues at hand. For example, the NFL owners wanted to lengthen the season, but players feared increased injury. While researcher’s state that an increase in injuries is unlikely, has there been any increased injury to soccer players when they play more games in preparation for the Olympics? Or has rugby, a similarly physical sport, ever tried to expand its schedule?

Bringing BATNA to forefront

On July 22nd, NFL analyst Adam Schefter tweeted, “In the end, De Smith and Roger Goodell can't win if no deal. Neither side likes the alternative. Thus, they'll figure it out. They have to.” Without any technical language, Schefter nailed it - both sides had very weak alternatives to a non-agreement. While the owners were not happy that they were only receiving 43% of the league revenue, a season-long lockout would cost each owner over $100 million in revenue. And while many high-profile players have enough money in the bank to sit out a season, younger players and those in financial trouble were already starting to look for jobs in areas such as retail or agriculture. If BATNAs had been discussed earlier in the negotiation, the two sides may have mutually agreed to not hold out and then make a deal at the eleventh hour.

Not everything went wrong in the negotiations. Many veteran players used the opportunity to run their own practices, showing their dedication to their teams and their expectation and optimism that a deal would be reached. These well-attended practices put faith in fans that the players hearts were still in the right places. Also, many coaches avoided the drama entirely and talked about only wanting to play, putting pressure on both the players association and owners to reach a deal from a source that both sides respected. While the lockout is now over and the season is underway, many involved are choosing to not look back. However, the weakened relationship between players and owners could certainly rear its ugly head in the future. Using Accordence negotiation tools, the NFL and NBA lockout may have resolved themselves in a cleaner and more effective manner.