Collective Bargaining

Collective bargaining is the process through which management of an enterprise and the workers (in the case of sport, the players) bargain over components of the working relationship. In a typical sport the league owners are the management, and the players collectively pool their voices to maximize their bargaining position vis-à-vis the owners. In sports collective bargaining issues typically involve financial remuneration (salaries, salary caps, pension contributions, per diem allowances), working conditions (modes of travel, scheduling, hotel accommodations), and code of conduct (punishments, drug-testing policies, public relations commitments and expectations). The ability of players to unionize in bargaining with management is established under the United States legal system.

U. S. Legislation Affecting Management and Labor

In 1890 Congress passed the Sherman Act, which was designed to shatter monopolies and establish an economic landscape that allowed businesses to freely enter and exit the marketplace and compete on equal terms with competitors.Though designed to limit the power of companies, numerous business entities utilized the Sherman Act to restrict the ability of workers to better their conditions. Many corporations successfully argued in court that employees who unionized and implemented strikes to force management to provide employment concessions restricted trade and were thus in violation of antitrust laws. In response the United States Congress passed the Clayton Act of 1914, which established that the labor of human beings was not subject to the Sherman Act. In addition Congress later passed the Norris- LaGuardia Act (1932) and the Wagner Act (1935), which established the right of labor to collectively act in its best interest when negotiating with management. The Wagner Act (known as the National Labor Relations Act) established the National Labor Relations Board (NLRB) to enforce labor laws and assist in governing labor disputes.

United States law enables workers to collectively pool their efforts in labor unions, to choose representatives to bargain their position, and to implement pressure tactics (strikes, picketing, etc.) to enhance their interest. In exchange for the power to bargain collectively, all members of a labor union agree to submit to the terms of their collective bargaining agreement with management and potentially to agree to terms that may diminish their individual rights.

Players Attempt to Unionize

Professional baseball began in the United States shortly after the Civil War. Most of the early years of professional baseball were disorganized and often underfinanced, but as uniform rules and a major league were established, leagues attempted to exert as much control as possible over players. In 1882 the National League and the numerous minor leagues that had been established signed the National Baseball Agreement.The National Baseball Agreement established the reserve clause, which gave control of player services to the club. Effectively, the reserve clause allowed teams to retain the services of the players forever.The reserve clause would remain in effect until 1976.

The reserve clause and other antiplayer baseball decisions would occasionally incite the players to attempt to organize in one coherent collective effort. Prominent attempts at organizing labor in baseball included the Brotherhood of Professional Baseball Players in the 1880s, the Professional Players Fraternity of the 1910s, and the American Baseball Guild in the 1940s. Each attempt to organize the players eventually stalled and was destroyed by player dissension, ownership maneuvers, or the American court system.

Marvin Miller and the Major League Baseball Players Association

Undaunted by years of unsuccessful attempts to establish a cohesive and effective union, players continued to work to organize their voices to instigate change in Major League Baseball (MLB). During the 1953 season, All-Stars Ralph Kiner and Allie Reynolds attempted to negotiate with the owners for additional money for the players’ pension fund. After meeting with continued resistance, the players hired lawyer Jonas Norman Lewis to represent their interests.The refusal of the owners to meet directly with Lewis frustrated and emboldened the players. In 1954 the Major League Players Association (MLBPA) was established, with aging star pitcher Bob Feller elected the first president of the new association.

Baseball’s owners continued to increase their revenues through franchise relocation, broadened television exposure, and expansion. In addition, in 1965 the owners implemented an amateur draft, which severely limited an incoming player’s ability to negotiate signing bonuses. Despite the efforts of the players and the MLBPA’s attorneys, baseball’s owners dramatically increased their profits while offering players only minimal increases in their compensation, The players decided that they needed to hire an established labor leader who would work for them full-time. In 1966 the MLBPA hired former United Steelworkers of America representative Marvin Miller and changed the course of labor relations in American professional sport forever.

Marvin Miller approached his job as executive director of the MLBPA fervently, immediately attempting to change the mentality of the players. For years players in all American professional sports had been unable to approach management on equal footing; Miller enabled MLB players to realize that they could bargain from a position of strength if they remained united. After collectively bargaining with the owners, an agreement regarding pension plans and insurance was signed in late 1966. From there Miller led the players union in numerous battles with the owners, almost always helping the players to advance their cause. When Miller assumed his position as MLBPA executive director in 1966, the minimum MLB salary was $6,000 a year, and there were no opportunities for free agency (the opportunity to negotiate with any team in the league). Although the United States Supreme Court ruled in 1972 against outfielder Curt Flood in his bid for free agency, Marvin Miller and the Players Association continued to work tirelessly for the rights of players. In 1976, after reviewing the merits of a player-owner dispute regarding the application of the reserve clause, arbitrator Peter Seitz awarded pitchers Andy Messersmith and Dave McNally free agency, and the reserve rule established in 1882 was finally overturned.The initial efforts of Miller and the continued efforts of the MLBPA created a financial landscape in baseball that resulted in average salaries exceeding $2.4 million by 2004.

Modern Sport Unions

Players from the National Football League (NFL), National Basketball Association (NBA), and National Hockey League (NHL) have also established player associations in their sports. Utilizing collective bargaining, the unions have successfully increased their share of league revenues and have worked to achieve free agency and other working conditions more favorable to players. Unfortunately, each of the four major professional sport leagues has experienced labor difficulties over the past thirty years—often with fans being the real losers during the negotiations.

Strikes

Under the collective bargaining process, players not satisfied with management proposals may elect to withhold their services through strikes, attempting to force owners to satisfy player demands by stopping “production.” In addition to postponing or canceling games, strikes increase media and fan attention on the disputed issues, which players hope will lead to concessions by owners. Additional stakeholders besides the union and management are affected by a strike. For every postponed or canceled game, media outlets lose revenue; facility employees working in concessions, security, hospitality, and the like potentially lose a portion of their yearly income; and hotels, restaurants, and bars near the stadiums lose their sport clientele.

Although there have been numerous strikes in the four major North American professional sport leagues, the most notable strikes have involved issues concerning salaries and free agency.The Major League Baseball strike of 1981 was a response by players to the insistence of the owners that teams losing free agents would be compensated with players from the team signing the free agent.The players correctly determined that if owners knew they would lose a player after signing a free agent, the potential salaries of players would be lowered. The strike resulted in a fifty-day shutdown, and 713 games were canceled.

During a strike players may elect to enhance their message of resolve to management, media, and fans by picketing. Often picket lines result in arguments or, occasionally, physical altercations between players and management. In some cases management may elect to employ nonunion workers or “scabs” to cross the picket lines.This occurred most prominently during the 1987 NFL strike as owners utilized replacement players in an attempt to fulfill media obligations while attempting to break the resolve of the striking players. Although the attendance and ratings for games played by replacement players was down considerably from usual levels, the games showed many striking players that the owners were committed to their position.The owners were successful in their tactics as scores of NFL players began to cross the picket lines to return to work. Eventually, the NFL Players Association was forced to end the strike and compromise with owners’ demands.

Perhaps the most devastating strike in American professional sport history occurred in Major League Baseball in 1994–1995.The owners insisted on a salary cap and a detailed revenue-sharing system. The players, adamant in their stance against any form of a salary cap, announced a strike on 12 August 1994. The strike resulted in the shutdown of the remainder of the season, including the cancellation of the 1994World Series. For the first time in ninety years, the October Classic was not played. The 1994 strike continued into the 1995 season, with the owners threatening to utilize replacement players. The parties were able to finally compromise on 25 April 1995. The usual schedule was shortened from 162 to 144 games and unfortunately, despite the posturing and strong negotiations on both sides, few changes to the basic agreement were made.

Lockouts

Owners unable to finalize collective bargaining agreements favorable to their position may elect to lock out the players from the workplace. During a lockout most owners attempt to portray the players as unreasonable in their demands. Although lockouts result in decreased revenue for management and players, sport owners hope the lockout will force players to return to the bargaining table, as they may be unable to financially survive without their regular paychecks.

Although the NHL had experienced relative labor peace from 1950 to 1990, in 1992 players had nearly shut down the postseason before some of their demands were met. In 1995 the NHL owners hoped to regain some concessions lost to the players in 1992, so they closed their doors. The 1995 NHL lockout lasted 103 days and resulted in the loss of 468 total games. Although the owners were able to advance their cause, hockey lost significant momentum in its marketing efforts as a result of the lockout. The NHL continued to waiver on a financial tightrope as owners and players had not completely settled their disputes and failed to establish a financial system that insured future prosperity for owners and players as well as stability for fans.This labor unrest eventually caused the owners to lock out the players during the start of the 2004 season. Players rebuffed any attempts by management to implement a salary cap or significant luxury tax, while owners insisted that such measures were necessary to contain costs and ensure financial viability for every team in the league.The entire 2004–2005 NHL season was eventually cancelled.

Prior to the 2004–2005 NHL labor disagreement the most devastating lockout in American professional sports occurred in the NBA in 1998–1999. Historically, the NBA had attempted to maintain labor peace despite difficult financial situations. The NBA and its players had established the first salary cap in major professional sports in 1983 and had never lost any games to work stoppages prior to 1998. The owners and players debated the merits of the salary cap, free agency, minimum salaries, rookie compensation, and aberrant behavior during the 202 days of the lockout. Although the finalized collective bargaining agreement created an individual salary cap, greater sharing of resources among players, and a comprehensive drugtesting policy, the loss of thirty-two games for each team significantly tarnished the image of the NBA.

Current Issues

Although unions in professional sports act much like any other union to further the interests of their members, there are some subtle differences across industries. In sports, unions typically do not bargain for exact compensation for members. The union and management craft a basic agreement regarding minimum salaries, working conditions, and the like, but the individual player is free to negotiate yearly salary, bonuses, and incentives with his individual employer. Although most of the major professional sport leagues have established seniority systems (rookie wage scales, veteran minimum salaries), compared with most nonsport unions, professional athletes have far greater freedom to negotiate as individuals. As salaries for many professional athletes have increased dramatically into the millions of dollars, many have questioned the need for sport unions in MLB, NBA, NFL, and NHL. In fact attempts have been made by individual players to decertify their union in order for individual players to maximize their compensation. During the 1998 NBA lockout, Michael Jordan and other prominent players attempted to decertify the union after the union and management appeared close to agreeing to maximum individual salaries. Jordan and the other players hoping to decertify the union to garner salaries above the proposed maximums failed in their attempt as the vast majority of players realized the collective bargaining agreement between NBA owners and players would enhance the salaries of the majority of players, even if it artificially lowered the salaries for the ultra-superstars.

In recent years Major League Baseball and other professional sport leagues have discussed the possibility of implementing rules (salary caps, revenue sharing, payroll taxes) to enhance competitive balance (the opportunity for every team to have adequate resources to compete for player services). These rules are subject to collective bargaining since they potentially alter financial compensation for players. In some leagues owners have not been able to implement policies that might enhance competitive balance (and therefore potentially improve the overall long-term financial position of the entire league) because they have not been successful in convincing the players association that changes should be implemented.

The Future

As performance-enhancing drugs have become commonplace in sport, unions negotiating collective bargaining agreements with management have been placed in an awkward position. Union leaders are employed to negotiate the best possible deal for the players, and if performance-enhancing drugs cause irreparable harm to the players, the union will likely not wish to see its members use these drugs. However, the union must also be concerned for the public relations implications if players are caught cheating by using drugs. This dilemma has often delayed the adoption of meaningful drug-testing and punishment policies as union members are not eager to allow management to implement fullscale testing, even if the union hopes to protect its members from the detriments of drug use.

The rapid increase in revenues in intercollegiate athletics has caused many people to consider the possibility of forming a union to protect the interests of athletes competing for men’s basketball and football teams in the National Collegiate Athletic Association (NCAA). For many NCAA Division I universities, revenues from media contracts, ticket and luxury suite sales, licensed merchandise, and other sources often exceed tens of millions of dollars a year. Numerous critics have noted that although players often receive scholarships to attend college, their value to the university is considerably more than what the school is providing them. Future discussions in this area are likely to lead to heated debates as players may elect to collectively bargain for a greater share of the revenue generated from their endeavors.

Mark Nagel, Daniel A. Rascher, Matt Brown, and Chad D. McEvoy